Paul Vigna and Michael Casey discuss their new book "Cryptocurrency" as well as the mystique and challenges facing bitcoin and the virtual currency business. Photo: AP.

Will We Ever Know Bitcoin Founder's Identity?

IF THERE’S a single story that illustrates the revolutionary potential of technological innovation, this may be it.

A company that has no offices, no employees and no CEO is responsible for the world’s most successful crowd-funding campaign, raising nearly $180 million and counting.

The company (for want of a better word) is known as DAO and is effectively governed by a computer program — and a very lucrative one at that.

DAO (which has taken its name from the very system it is: Decentralised Autonomous Organisation) is one of many virtual companies harnessing the technology of the rapidly emerging cryptocurrency industry to completely reshape the way people invest and interact with business.

DAO was created by Berlin based company Slock.it which uses Blockchain technology (the underlying technology of Bitcoin) to allow consumers and businesses to function without an intermediary.

They hope DAO will be the first step in a universal sharing network.

The DAO system runs on the Ethereum network, a public blockchain which uses the ether currency to execute peer-to-peer contracts automatically. The “smart contracts” run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference, according to the Ethereum website.

As Investopia puts it, the intention of the platform is “to allow self-executing smart contracts to be coded directly into it, permitting trusted transactions and agreements to be carried out among disparate, anonymous parties.”

The system is quick, transparent and impervious to corruption.

The DAO project was conceptualised and created by Slock.it but is now a decentralised network that is community run. And that community is currently in its fundraising stage.

Basically, to be a part of the DAO group people can invest by using what is ultimately the cryptocurrency of the Ethereum network to pay for DAO tokens, which is how DAO is really created — by everyone throwing their money in the pot.

The number of tokens you buy effectively represents your potion of the kitty, and thus the percentage of control you have over decisions made by the group.

The selling period kicked off on April 28th and runs until May 28th.

So far the DAO project has raised $180 million, “making them the largest crowdfunded project in history, ” according to Futurism.com.

Once the selling period finishes (which can be thought of as an IPO) then the real fun begins. The group will basically become a venture capital firm.

DAO token holders have voter rights and are entitled to their share of profits. Where those potential profits come from is up to the voters.

Obviously, the company is just software. So through a democratic vote, token holders will hire contractors to engage in economic activity, whose work will be enforced by a smart contract.

DAO appeals to people who are tired of centralised projects where they have no say,” Slock.it founder Stephan Tual told Reuters.

Among the current proposals is to fund a company called Mobotiq, which plans to create smart autonomous electric cars that can be rented peer to peer, eventually resulting in self renting cars.

The project is not the very first DAO to be constructed on Ethereum but it is the first attempt to truly democratise ownership of an organisation, with 100 per cent of the ownership distributed among its stakeholders.

It remains to be seen exactly how well the company operates and the impact it has. But the implications are very interesting indeed.

Largest crowdfund in history is now a smart contract (TheDAO: $120m).



Already incomprehensible to most, technology change is accelerating. — AndreasMAntonopoulos (@aantonop) May 16, 2016

If the cryptocurrency ecosystem, and Ethereum along with it, go on another 10x+ run, The DAO will be a multi-billion dollar fund. #justsayin — Dan McArdle (@robustus) May 17, 2016

The DAO looks like a decentralized Kickstarter (ie. way to lose your money) that nobody asked for. Man, when will #Crypto learn? — Jackson Palmer (@ummjackson) May 17, 2016