Blockchain Application 2: Shared Crypto Wallet DAO

The mind that organisation is centralised and hierarchical is deep rooted in our heart. However, the blockchain gradually transformed the nature of organisations. Here come’s the Shared Crypto Wallet DAO!

What is DAO?

Decentralised Autonomous Organisation(DAO) is the organisation established on a blockchain. Because it was inspired by the usage of virtual currencies. Someone might call DAO as a ‘shared crypto wallet’.

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Most of the features of DAO are similar to blockchain. Its foundation is the smart contract, which are automated and decentralised. Also, the benefits of blockchain are included, like privacy and security.

It is not controlled by the central government, unlike central bank. Yet it is ruled by computer programme. Thus, DAO can avoid the humane mistakes and man-made controls. However, this type of organization is lack of clear legal status.

Examples of DAO

One of the most famous and the earliest example is ‘The DAO‘. It can be viewed as venture capital funding and crowdfunding built on the Ethereum blockchain. Yet, in 2016, the DAO was hacked US$50 million in cryptocurrency. This event showed the vulnerabilities of DAO.

The benefits and the risks of DAO are similar to the blockchain, because the concept of DAO was found on the blockchain.

Another latest example is ConstitutionDAO. To illustrate, The organization aimed to purchase the original copy of United States Constitution. However, they finally lost the bid, but the organizer would refund the money reduced the transaction fee.

The Differences between DAO and Traditional Organization

1. Democracy: DAO owns a higher democracy; the traditional one is hierarchy.

2. Voting Equality: members need to vote for every change; the traditional one depends on the organizational structure. Besides, the outcomes of DAO would be calculated automatedly without the intervention of the third party; the traditional one is calculated and handed in by people.

3. Decentralization
4. Transparency and Fully Public

Usual Applications of DAO:

1. Charity
2. Networks of contractors
3. Ventures capital

Trust can be hard to build in today’s world. However, DAO make it happened. DAO provided people a trusted world to sharing ideas and money. Also, people started to abandon the concept of centralization and hierarchy. The style of modern organization is changing. Although it seemed to be unfamiliar to many people, it must be a future trend with higher safety and effectiveness.

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