8 ms·

The DAO is effectively on hold to decide whether flaws exist and how to fix them

88 points by bpierre 10y ago

skrowl 10y ago
I thought Star Citizen was the largest crowdfunded thing ever. Source?
- jhildings 10y ago
  https://en.wikipedia.org/wiki/List_of_highest_funded_crowdfunding_projects https://en.wikipedia.org/wiki/List_of_highest_funded_crowdfu...
- deleted 10y ago
  [deleted]
- existencebox 10y ago
  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
- theandrewbailey 10y ago
  Me too. DAO is more recent, though. It might be the largest number of backers.
- ufo 10y ago
  Maybe they really meant croudfunding instead of croudfunded? The DAO is supposed to be a decentralized system for managing a fund that invests in other projects.
hashkb 10y ago
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.
- maneesh 10y ago
  And at best, extremely high returns!
  - notahacker 10y ago
    Sure, same applies to the lottery, except there's substantially more evidence of the lottery generating extremely high returns for ordinary players than an unregulated investment pool governed by the votes of anonymous entities.
- gst 10y ago
  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 10y ago
    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.
FiReaNG3L 10y ago
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.
- hashkb 10y ago
  It seems like in such an open organization, and considering the problems (1%) that this is trying to address, there would be some tools for querying the wealth distribution. (There may/should be, idk; a few Googles came up empty.)
  - FiReaNG3L 10y ago
    Yeah but it's anonymous / via bitcoin, no one could stop you from doing a 1000 'small' donations under a 1000 different identities, yet you control them all?
    - hashkb 10y ago
      Damn. Of course you're right. And it could all be automated, transparent to you, the cheater.
      - evan_ 10y ago
        Maybe they could charge a small per-share voting fee which would be destroyed (or used in some clever, non-game-able way). I could even imagine automatically refunding the fee for those casting losing votes to avoid wars of attrition... I guess that's essentially an auction.
        jbpetersen 10y ago
        Wouldn't work, people could group together and remain anonymous.
dzdt 10y ago
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/blockchain-company-wants-to-reinvent-companies https://www.bloomberg.com/view/articles/2016-05-17/blockchai... * https://www.bloomberg.com/view/articles/2016-05-23/bailout-fights-and-blockchain-ideas https://www.bloomberg.com/view/articles/2016-05-23/bailout-f... * https://www.bloomberg.com/view/articles/2016-05-31/compliance-therapy-and-software-rules https://www.bloomberg.com/view/articles/2016-05-31/complianc...
- theseatoms 10y ago
  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 10y ago
    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 10y ago
      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 10y ago
        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.
wyck 10y ago
"Kind of" is the understatement of the year when you consider the amount of money involved and how stupid this idea actually is.
- dang 10y ago
  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.
alistproducer2 10y ago
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 10y ago
  That runs counter to what I have been hearing/reading. AFAIK the dev community is the fastest growing in the cryptocurrency space.
  - alistproducer2 10y ago
    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?
  - sievebrain 10y ago
    Did any of them produce a killer app though
- 10y ago
dang 10y ago
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.
joosters 10y ago
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-results-d26bc088e32e#.iik3weych https://blog.slock.it/deja-vu-dao-smart-contracts-audit-resu... ... and they found none of these big problems. What does that say about code audits?
- roywiggins 10y ago
  At a first approximation, it sounds like the problem is perverse incentives, not buggy code. The code does what it's supposed to, but it has consequences that were either not noticed or not publicised.
- c3534l 10y ago
  > 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 10y ago
    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.
Animats 10y ago
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.
bunkydoo 10y ago
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.

88 points by bpierre 10y ago

skrowl 10y ago

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

jhildings 10y ago
https://en.wikipedia.org/wiki/List_of_highest_funded_crowdfunding_projects https://en.wikipedia.org/wiki/List_of_highest_funded_crowdfu...
deleted 10y ago
[deleted]
existencebox 10y ago
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
theandrewbailey 10y ago
Me too. DAO is more recent, though. It might be the largest number of backers.
ufo 10y ago
Maybe they really meant croudfunding instead of croudfunded? The DAO is supposed to be a decentralized system for managing a fund that invests in other projects.

hashkb 10y ago

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.

maneesh 10y ago
And at best, extremely high returns!
- notahacker 10y ago
  Sure, same applies to the lottery, except there's substantially more evidence of the lottery generating extremely high returns for ordinary players than an unregulated investment pool governed by the votes of anonymous entities.
gst 10y ago
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 10y ago
  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.

FiReaNG3L 10y ago

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.

hashkb 10y ago
It seems like in such an open organization, and considering the problems (1%) that this is trying to address, there would be some tools for querying the wealth distribution. (There may/should be, idk; a few Googles came up empty.)
- FiReaNG3L 10y ago
  Yeah but it's anonymous / via bitcoin, no one could stop you from doing a 1000 'small' donations under a 1000 different identities, yet you control them all?
  - hashkb 10y ago
    Damn. Of course you're right. And it could all be automated, transparent to you, the cheater.
    - evan_ 10y ago
      Maybe they could charge a small per-share voting fee which would be destroyed (or used in some clever, non-game-able way). I could even imagine automatically refunding the fee for those casting losing votes to avoid wars of attrition... I guess that's essentially an auction.
      - jbpetersen 10y ago
        Wouldn't work, people could group together and remain anonymous.

dzdt 10y ago

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/blockchain-company-wants-to-reinvent-companies https://www.bloomberg.com/view/articles/2016-05-17/blockchai... * https://www.bloomberg.com/view/articles/2016-05-23/bailout-fights-and-blockchain-ideas https://www.bloomberg.com/view/articles/2016-05-23/bailout-f... * https://www.bloomberg.com/view/articles/2016-05-31/compliance-therapy-and-software-rules https://www.bloomberg.com/view/articles/2016-05-31/complianc...

theseatoms 10y ago
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 10y ago
  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 10y ago
    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 10y ago
      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.

wyck 10y ago

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

dang 10y ago
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.

alistproducer2 10y ago

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 10y ago
That runs counter to what I have been hearing/reading. AFAIK the dev community is the fastest growing in the cryptocurrency space.
- alistproducer2 10y ago
  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?
- sievebrain 10y ago
  Did any of them produce a killer app though
10y ago

dang 10y ago

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.

joosters 10y ago

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-results-d26bc088e32e#.iik3weych https://blog.slock.it/deja-vu-dao-smart-contracts-audit-resu... ... and they found none of these big problems. What does that say about code audits?

roywiggins 10y ago
At a first approximation, it sounds like the problem is perverse incentives, not buggy code. The code does what it's supposed to, but it has consequences that were either not noticed or not publicised.
c3534l 10y ago
> 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 10y ago
  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.

Animats 10y ago

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.

bunkydoo 10y ago

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.