Blockchain

DAO: New take on blockchain technology

EPA/VALERIE KUYPERS

Digital currency has been a prevailing topic of interest among an ever-growing number of cyber consumers all over the world. Bitcoin, the first digital currency of our time, has created a new wave of excitement over numerous possibilities of the virtual world. The growing trend of computerisation has resulted in more and more people becoming increasingly interested in many new ways in which they can participate in financial transactions, secure data transfers, and many other prospects that the new technology deriving from Bitcoin can provide.

The blockchain technology, first deployed by Bitcoin, has spread across the globe and is slowly becoming an essential tool used by institutions in various sectors, including healthcare, financial and even defense industries.

Ethereum is another public blockchain platform using smart contracts, known as computer protocols that enforce a contractual agreement and erase the need for contract clauses. The virtual system functions as an online decentralised virtual machine using cryptocurrency Ether. The platform was first invented in 2013 with the help of crowdfunding by Russian-Canadian computer programmer Vitalik Buterin, previously involved in Bitcoin. By 2016, Ether tokens had an estimated worth of approximately $1 billion, becoming Bitcoin’s main competitor in the digital currency market after its official launch in 2015.

Inspired by such new technology and miscellaneous opportunities, the concept of a more philosophical nature came into existence last month with the creation of a new type of organisation with a decentralised power structure. Moreover, the initiative is capable of being completely self-sustainable as long as it remains connected to the Internet. This new initiative that functions based on Ethereum is known as the Decentralized Autonomous Organisation (DAO).

The DAO’s main aim is to support various projects related to the Ethereum software while also involving community participation. In other words, the new decentralised system allows the whole community to engage in the decision-making processes as long as the members participating own DAO tokens. Some DAO projects are also intended to be funded through a certain percentage from token sales. DAO tokens are available for sale online on DAOhub until May 28 at a rate of 100 tokens per Ether.

The success story of the DAO became so popular with the organisation managing to raise $132 million through crowdfunding in a record amount of time, becoming the biggest crowd sale in the history of the cryptocurrency industry.

Shortly after that, Australian Bitcoin and Ethereum exchange BTC Markets announced it will be supporting DAO tokens on its trading platform, where the DAO owners will be able to exchange the tokens for Bitcoins or Ethers.

San-Francisco-based Kraken Bitcoin exchange that trades Bitcoins from 2011 announced its plan to launch DAO trading, starting tomorrow.

Certain governments have also noticed the emerging possibilities from blockchain technology and cryptocurrency. For example, Russia announced on Friday it will consider creating its own digital currency to drive down costs of financial transactions and increase risk aversion.

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