
The DAO is effectively on hold to decide whether flaws exist and how to fix them - bpierre
http://www.wired.com/2016/06/biggest-crowdfunding-project-ever-dao-mess/
======
alistproducer2
My 2 cents:

I started and (briefly) ran the sole Ethereum-focused meetup in the Atlanta
area. I shut down shop due to lack of interest in the meetup. ATL has a pretty
decent crypto scene. Bitpay and Storj are located here and the local Bitcoin
meetup has ~500 members.

IMO Ethereum's problem is complexity and a lack of anyone in the inner circle
who has the skills or desire to bring the complexity down to a place where the
cost/benefit begins to makes sense (from a developer's standpoint).

Decentralization and trustless-ness are better means than they are ends. The
platform's learning curve is steep and long. Outside of fintech and a few
other niche applications, it hardly seems worth hiking up that curve just to
say "yeah, but we're decentralized."

I understand ETh is an experiment and I commend the core dev team for putting
in so much hard work, but a platform is only as good as what people build with
it. Unless they get some people in the inner circle who can focus on
evangelizing the tech to regular devs (not just crypto-enthusiasts) it will
fail.

EDIT: let me clarify when I say the core team lack skills, I'm clearly not
talking about technical skills. I'm talk about API design and marketing to
developers. I know we're not supposed to comment on down voting but at least
comment something saying what you disagree with. I don't feel like I am being
un-constructive or unnecessarily harsh or combative with my comment.

~~~
markkat
That runs counter to what I have been hearing/reading. AFAIK the dev community
is the fastest growing in the cryptocurrency space.

~~~
alistproducer2
With respect, I don't think that's saying much. ETH is pretty much the only
crypto platform [anyone has ever heard of] specifically built to support on-
chain app development so they kind of win "the fastest growing" category by
default, don't they?

------
dzdt
Matt Levine at Bloomberg has some insightful commentary on the DAO from a
legal/finance perspective:

* [https://www.bloomberg.com/view/articles/2016-05-17/blockchai...](https://www.bloomberg.com/view/articles/2016-05-17/blockchain-company-wants-to-reinvent-companies)

* [https://www.bloomberg.com/view/articles/2016-05-23/bailout-f...](https://www.bloomberg.com/view/articles/2016-05-23/bailout-fights-and-blockchain-ideas)

* [https://www.bloomberg.com/view/articles/2016-05-31/complianc...](https://www.bloomberg.com/view/articles/2016-05-31/compliance-therapy-and-software-rules)

~~~
theseatoms
I found this helpful. From the first linked-to article, regarding the DAO:

> All of this is trivially replicable using old-fashioned governance
> structures. Berkshire Hathaway would look a bit like the DAO if, instead of
> leaving things to Warren Buffett, all of its shareholders got to vote on
> every investment decision. When I put it like that you can probably see why
> this structure has not been super popular so far. But who knows! Maybe the
> DAOers will be really good at picking winners, and putting them into smart
> contracts.

~~~
Jd
What's missing is that this DAO structure has a self-evolving nature and can
modify its own decision making structure, something that no "old-fashioned"
structure can do.

~~~
jontas
To extend the (simplistic) Berkshire Hathaway analogy, why couldn't Warren
Buffet change the structure to shareholder voting? If he did, why couldn't the
shareholders then vote to change the structure to something else. That would
be self evolving in the same sense that the DAO is "self evolving".

~~~
Natanael_L
The actual difference is the concensus rules and that everything is public in
a shared chain of transactions / events. It means anybody can interact with it
on equal grounds.

~~~
dragontamer
Last time I checked, I was able to vote in my shareholder's meeting when I
only owned a few shares in a company. (I mean yeah... I know GOOGL exists, but
most people seem to buy GOOG and pay the slight premium for the voting rights)

Most people just don't care about voting rights in the companies they own
(which is why GOOGL exists)

[http://investorplace.com/2014/07/goog-google-stock-
split/](http://investorplace.com/2014/07/goog-google-stock-split/)

~~~
Natanael_L
But that's still not on equal grounds and fully public - what the blockchain
systems implement in public using the computers of the collective is instead
implemented by humans with imperfect transparency and accountability.

And that was the entire point. The capabilities aren't different, it is the
guarantees around its behavior that are.

~~~
dragontamer
> But that's still not on equal grounds and fully public - what the blockchain
> systems implement in public using the computers of the collective is instead
> implemented by humans with imperfect transparency and accountability.

Who are your major coinvestors in the DAO?

Did any of your coinvestors perform an inside-trade to bet __against __the
company through either a put-option or a short sell?

Because all inside trades of public corporations are publicly documented. Can
you really trust your fellow DAO "investors" when you aren't even sure if
they're betting on your side?

Nah man, I think classical companies are more transparent. Its very important
to keep in mind the insider trades.

Here's all of the insider trades from Microsoft in the past two years:
[http://finance.yahoo.com/q/it?s=MSFT](http://finance.yahoo.com/q/it?s=MSFT)

Now where's the equivalent information on the DAO?

\-------------

The DAO is a baby experiment. The first of its kind: a digitally run company.
I'll give it credit for that. Unfortunately, it still has a LOT to learn about
political trust structures.

No one gives a crap about whether or not board policy was followed. What
people care about are inside trades and conflicts of interest, of which the
DAO doesn't seem to offer any solace.

~~~
Natanael_L
Those trades are still just the public ones - a trade doesn't need to have an
official paper trail involving every intermediate buyer.

~~~
dragontamer
Yeah they do, if you don't feel like going to jail.

[https://www.theguardian.com/business/2014/sep/08/matthew-
mar...](https://www.theguardian.com/business/2014/sep/08/matthew-martoma-sac-
capital-jail-insider-trading)

So once again, I ask what is the mechanism that allows you to trust your
fellow DAO investors? What are the protections the DAO has against the classic
Ponzi scheme or Pyramid Scheme?

Again: the DAO is a baby in a young field. I'm sure __eventually __a digital
scheme will be invented that addresses these concerns. But from my
understanding, the DAO is not a good digital scheme yet. Maybe a future
project will be better at addressing real concerns and solving real issues. Or
maybe the DAO will be able to self-mutate itself to solve the issues that
truly do arise.

------
FiReaNG3L
Do we know for sure that a single individual / investment group doesn't hold a
majority of shares and is just a normal VC with the added benefit of random
people adding their money to the fund for no real benefit to them? If it's the
case this whole thing could be a way to take risks you couldn't take with your
name + the additional PR from the model.

~~~
woah
If it makes a return for the random people, isn't that a benefit?

~~~
jacquesm
That depends. Ponzi schemes generate returns for random people for a while as
well. Not that this is a Ponzi scheme but generating returns for random people
in and of itself is not always beneficial, you need to look at the longer term
to establish whether or not the net result is positive.

------
Animats
The fundamental question with the DAO is "what happens when something goes
wrong". Contract law is simple when everything goes right - item gets
delivered and paid for, contract is fulfilled and complete. It's the error and
fraud cases that are hard. As Bitcoin has taught us.

------
hashkb
I hope this reality check cools off all the zealots. To me, this is, like,
"duh!" At best, extremely risky to spend your money on; at worst, obviously
stupid.

~~~
gst
Of course the DAO is very likely to fail. It's an experiment. Like the system
it's based on.

It will fail, we're going to learn from these failures, and then try again.
And then again. And again. And after enough iterations and learning from
earlier mistakes there could be a chance for it to succeed.

It's not about the money, but about the technology. Yes - people are throwing
lots of money at the DAO, but it's their own decision to place an extremely
high risk investment for the chance of a potential gain in the future. Don't
blame the technology for that.

I'm really glad that there are people who try to continue pushing things
forward, although everyone tells them that their ideas are never going to work
out. If those people wouldn't exist we'd still be throwing rocks together to
light a fire.

~~~
rdlecler1
Thanks for posting this defense. There are so many detractors that are calling
this stupid because it's not fully baked. People voted with their wallets to
make this happen and effect change. Let them.

There are risks and unknowns. Will it fail? Probably. But most ideas and
ventures fail. So a high likely hood of failure (which is inherent in all
novel ideas and ventures) is an intellectually lazy reason to reject it.

It also bothers me that you have these lawyers calling this sloppy and poorly
executed. Like the founder had any idea that this would take off as it did.
This is a cool project and I think it can self correct. If not, it's a
wonderful experiment to eat hand the worlds a better, more interesting, place
because of it because it's things like this that could be zero to one events.
And that is rare.

------
bunkydoo
I will say it has a shot, it's not as risky as say buying a shady altcoin
during a pump. But it sure as hell has the possibility of crapping out
entirely.

------
joosters
So it turns out that the DAO is buggy. Hardly a surprise, given that it has
hundreds of lines of code. What is surprising though is that the code was
allegedly audited for bugs and security problems before release:
[https://blog.slock.it/deja-vu-dao-smart-contracts-audit-
resu...](https://blog.slock.it/deja-vu-dao-smart-contracts-audit-
results-d26bc088e32e#.iik3weych) ... and they found none of these big
problems. What does that say about code audits?

~~~
c3534l
> given that it has hundreds of lines of code

That's our benchmark for massive project now? _Hundreds_ of lines of code? Any
decent open-source project should be able to handle hundreds of lines without
breaking.

~~~
joosters
I didn't say anything about massive. On average, computer code has about one
mistake per ten lines of code (very roughly, of course) So once you have over
a few hundred lines of code, you are practically assured of having bugs. And
then you throw over $100 million at the buggy code, and the results are ... as
expected.

------
skrowl
I thought Star Citizen was the largest crowdfunded thing ever. Source?

~~~
existencebox
Space nerd checking in: Star Citizen is currently at ~115m[1], DAO reads to be
at 16something, from my skim of the article. Additionally, people who get more
picky as to what counts as "crowdfunding" sometimes only cite the early
kickstarter campaign for SC, but at least "the big number" seems smaller.

[1][https://robertsspaceindustries.com/funding-
goals](https://robertsspaceindustries.com/funding-goals)

------
dang
We replaced the baity title (in which direction Wired sadly took a noticeable
step a while ago) and replaced it with what seems like a representative
sentence from the article. If anybody suggests a better (more accurate and
neutral) title, we can change it again.

------
wyck
"Kind of" is the understatement of the year when you consider the amount of
money involved and how stupid this idea actually is.

~~~
dang
Please don't post unsubstantive dismissals. If you want to make a point like
this, the way to do so is to make it thoughtfully and include actual
information to help readers evaluate the truth for themselves.

