It's pretty incredible to see just how quickly blockchain technology has evolved.
It was initially just used as a currency with Bitcoin, now it's the basis for smart contracts, distributed computing, decentralised currency exchanges and new usecases are being created every day.
One major usecase, or perhaps an evolution of blockchain technology is in acting as a Decentralised Autonomous Organisation (DAO).
It's basically an extension of blockchain smart contract technology which has feature of Decentralized Governance by Blockchain (DGBB) - which means token holders can vote on the smart contracts which run on the blockchain.
For example let's look at a smart contract made for corporate management. Does your sales employee reach a sales target of $120k for the year? Automatically give him a $15k raise. Does he reach $30k or less? Then fire him (note: you need ChainLink or some other oracle/middleware to give a smart contract this info unless they're already selling/being paid directly via the blockchain).
But smart contracts by themselves are centralised in control - only the smart contract creator can set the rules. A DAO on the other hand allows token holders to vote on the smart contracts which exist - for example a token holder could make a proposal of increasing the raise to $25k in this instance, which all token holders can then vote on and if it passes then the smart contract would be updated accordingly.
The applications of DAOs are huge but this introductory post would be remiss if the failure of the first DAO wasn't mentioned.
The first DAO (aptly named "The DAO") was the biggest crowdfunded project ever (it raised $150 million) when it launched in 2016 but ultimately failed because of human error in writing the code.
It had several major security holes which allowed a hacker to steal millions before a consensus was reached in the community and a hard fork was executed to roll back these illegitimate transactions. This hard fork in the chain is why both Ethereum and Ethereum Classic exist today.
The community has been cautious to take the dive back into DAOs but there are several successful DAOs still running.
Dash is #6 in cryptocurrency market cap (>$2.5 billion) and it's an example of a successful DAO.
With Dash 10% of block rewards are reserved for the treasury, which is a decentralised fund used to pay for projects which benefit Dash. How the funding is spent is decided by their DGBB, which is a treasury system that allows consensus to be reached based on whatever proposals people put forth. The decentralised voting in this system has resulted in the hiring of 50+ employees, websites, marketing, research & development, integrations with APIs, conference events etc.
This is a huge success for transparency in business, and these employees benefit from being paid by their decentralised employer anonymously and instantly thanks to Dash's PrivateSend and InstantSend features.
DAOs are also an extremely powerful basis for other organisations.
More coming soon.
It was initially just used as a currency with Bitcoin, now it's the basis for smart contracts, distributed computing, decentralised currency exchanges and new usecases are being created every day.
One major usecase, or perhaps an evolution of blockchain technology is in acting as a Decentralised Autonomous Organisation (DAO).
It's basically an extension of blockchain smart contract technology which has feature of Decentralized Governance by Blockchain (DGBB) - which means token holders can vote on the smart contracts which run on the blockchain.
For example let's look at a smart contract made for corporate management. Does your sales employee reach a sales target of $120k for the year? Automatically give him a $15k raise. Does he reach $30k or less? Then fire him (note: you need ChainLink or some other oracle/middleware to give a smart contract this info unless they're already selling/being paid directly via the blockchain).
But smart contracts by themselves are centralised in control - only the smart contract creator can set the rules. A DAO on the other hand allows token holders to vote on the smart contracts which exist - for example a token holder could make a proposal of increasing the raise to $25k in this instance, which all token holders can then vote on and if it passes then the smart contract would be updated accordingly.
The applications of DAOs are huge but this introductory post would be remiss if the failure of the first DAO wasn't mentioned.
The first DAO (aptly named "The DAO") was the biggest crowdfunded project ever (it raised $150 million) when it launched in 2016 but ultimately failed because of human error in writing the code.
It had several major security holes which allowed a hacker to steal millions before a consensus was reached in the community and a hard fork was executed to roll back these illegitimate transactions. This hard fork in the chain is why both Ethereum and Ethereum Classic exist today.
The community has been cautious to take the dive back into DAOs but there are several successful DAOs still running.
Dash is #6 in cryptocurrency market cap (>$2.5 billion) and it's an example of a successful DAO.
With Dash 10% of block rewards are reserved for the treasury, which is a decentralised fund used to pay for projects which benefit Dash. How the funding is spent is decided by their DGBB, which is a treasury system that allows consensus to be reached based on whatever proposals people put forth. The decentralised voting in this system has resulted in the hiring of 50+ employees, websites, marketing, research & development, integrations with APIs, conference events etc.
This is a huge success for transparency in business, and these employees benefit from being paid by their decentralised employer anonymously and instantly thanks to Dash's PrivateSend and InstantSend features.
DAOs are also an extremely powerful basis for other organisations.
More coming soon.