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Funds Stolen From The Dao One Year Ago Would Be Worth $1.35bn Today

Funds Stolen From The Dao One Year Ago Would Be Worth $1.35bn Today

Funds Stolen From the DAO One Year Ago Would be Worth $1.35bn Today An important milestone has occurred over the past 24 hours. It is the one-year anniversary of the infamous implosion of The DAO. As most people will recall, this project raised over $125m via crowdfunding and promptly saw funds being drained due to a smart contract bug. This event is now one year behind us, and it is important to look back at this defining moment in Ethereum history. One year ago, things were looking rather problematic for the Ethereum ecosystem. Its powerful technology allows for some innovative business models, including decentralized autonomous organizations. One project, known as The DAO , decided to use this business model to change the world as we know it. The DAO hosted a massive ICO, and raised quite a lot of money in the process. In fact, it became the worlds largest crowdfunding project to date. Unfortunately, The DAO also attracted a lot of negative attention. It did not take all that long for assailants to discover a major flaw in the projects smart contract code. As a result, individuals were able to drain money from The DAO, which became a rather pressing problem. Several attempts to drain funds were successful, and it became evident The DAO was no longer sustainable. In fact, the project ceased to exist some time ago. All native DAO tokens were ultimately converted back into Ethereum. During these hacking attempts, around $60m worth of Ether was eventually stolen from The DAO. Such a high amount posed a major problem for investors, and a lot of people wanted to find a solution. Eventually, that solution materialized in the Ethereum hard fork, which also spawned Ethereum Classic . Not everyone agreed with invalidating transactions associated with The DAO funds being drain Continue reading >>

The Sec Is Throwing A Damper On Ethereum Madness

The Sec Is Throwing A Damper On Ethereum Madness

The SEC is throwing a damper on ethereum madness The Securities and Exchange Commission is taking an interest in the hottest craze in cryptocurrency, the initial coin offering (ICO), and apparently the SEC is not into the hype. The commission published a report on Tuesday advising that ICOs, or token sales, are subject to securities laws. It concluded that a certain multimillion-dollar ICO last year the first of its kind violated securities law. An ICO an acronym that intentionally mirrors IPO is a new way to raise money for a startup, using the cryptocurrency Ethereum . Like Bitcoin, Ethereum runs on blockchain technology. But one of the many differences between Bitcoin and Ethereum is that the latter offers smart contracts automatically executed code that can take the form of a financial transaction that are built right into the technology. One result is that Ethereum can be a platform to raise ether (a crypto asset that can be traded for state-issued currency like dollars) in exchange for tokens that might offer the token holder voting rights, or a financial stake in an enterprise. ICOs have been catching on like wildfire, with one joke ICO raising tens of thousands of dollars in minutes . In June, a messaging app raised $44 million despite not yet offering an actual app . ICOs have been compared to crowdfunding, which is exempt from the registration requirement for securities. On Tuesday, the SEC waved aside that comparison, instead concluding that tokens in some cases at least were securities. According to the SEC, the DAO violated section 5 of the Securities Act The 18-page investigative report specifically analyzes the Decentralized Autonomous Organizations (DAO) ICO in 2016, and concludes that DAO tokens are securities. The DAO has been described as a new sort Continue reading >>

Where Are We Dao? - Ethnews.com

Where Are We Dao? - Ethnews.com

One year has already passed since The DAO incident rocked the ecosystem. The experiment in algorithmic governance is still the largest crowd-funded project in history. What happened to this dream deferred? What have we learned from its legacy? And where are we now? There are a lot more people involved in cryptocurrencies today than there were on June 17, 2016. Ether was $20 back then and a lot has changed. Todays Ethereum community is concerned with issues related to rapid growth. Currently, pressing matters under debate and development within the ecosystem include Proof-of-Stake, sharding , and scaling . These issues all emanate from the commonly held notion that the time has come to buildout the Ethereum blockchain to meet the necessary speed requirements for supporting networked systems of the future, like the internet of things , as well as to meet continuing demand for further growth. Whereas the Ethereum ecosystem a year ago was enveloped with a different kind of concern altogether, that revolved around surviving a unique culmination of cascading events that unfolded with Hollywood-esque drama. Indeed, Ethereums 5000 percent growth this year would not have been possible without first prevailing over the events of The DAO hack. The DAO is a colloquialism. DAOs are decentralized autonomous organizations. The DAO wasnt the first DAO to exist and it wasnt the last. It is simply the most famous one or infamous one and the reasons for its notoriety are fourfold. Firstly, The DAO was one of the first real-world examples of autonomous governance in action, this is paramount. Secondly, The DAO was the first distributed application (Dapp) with a token on the new Ethereum blockchain. Thirdly, The DAO raised over $150 million in Ether from more than 11,000 participants, maki Continue reading >>

Secs Verdict On The Dao: What It Means For Token Sales

Secs Verdict On The Dao: What It Means For Token Sales

SECs Verdict On the DAO: What It Means for Token Sales It is clear that sales into the US must be conducted pursuant to US securities laws.Keywords: SEC, ICO, the DAO, Bitcoin. The SEC published a report into its analysis of the ICO The DAO and whether it contravened US securities law. The DAO was a virtual organization functioning like an investment fund, built on the Ethereum Blockchain. The DAO ICO was one of the first and largest in the industry and received widespread criticism. To compound, or perhaps to simplify, matters, before it was able to fund any projects a major hack on the DAO occurred with many millions of dollars worth of digital currency stolen. The SECs report provides important guidance for anyone involved in, or considering, a token sale as a funding mechanism. Perhaps the most important sentence in the document reads: Based on the investigation, and under the facts presented, the Commission has determined that DAO Tokens are securities under the Securities Act of 1933 (Securities Act) and the Securities Exchange Act of 1934 (Exchange Act). At issue here is whether the DAO tokens meet the requirements of the Howey test as a formal security, and in this case yes the SEC deemed they did. This is likely due to the nature of the DAO, which was always intended to be a profit generating entity that rewarded token holders with a share of profits generated from the projects in which it would invest. The DAO was also promoted as a for profit entity. As Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act, makes clear - a security includes an investment contract. An investment contract is an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the entrepreneurial or managerial effort Continue reading >>

Create A Democracy Contract In Ethereum

Create A Democracy Contract In Ethereum

"On the Blockchain, no one knows you're a fridge" So far, all contracts we listed were owned and executed by other accounts probably held by humans. But there is no discrimination against robots or humans in the Ethereum ecosystem and contracts can create arbitrary actions like any other account would. Contracts can own tokens, participate in crowdsales, and even be voting members of other contracts. In this section we are going to build a decentralized and democratic organization that exists solely on the blockchain, but that can do anything that a simple account would be able to. The organization has a central manager that decides who are the members and the voting rules, but as we'll see, this can also be changed. The way this particular democracy works is that it has an Owner which works like an administrator, CEO or a President. The Owner can add (or remove) voting members to the organization. Any member can make a proposal, which is in the form of an ethereum transaction to either send ether or execute some contract, and other members can vote in support or against the proposal. Once a predetermined amount of time and a certain number of members has voted, the proposal can be executed: the contract counts the votes and if there are enough votes it will execute the given transaction. pragma solidity ^0.4.16;contract owned { address public owner; function owned() public { owner = msg.sender; } modifier onlyOwner { require(msg.sender == owner); _; } function transferOwnership(address newOwner) onlyOwner public { owner = newOwner; }}contract tokenRecipient { event receivedEther(address sender, uint amount); event receivedTokens(address _from, uint256 _value, address _token, bytes _extraData); function receiveApproval(address _from, uint256 _value, address _token, byt Continue reading >>

The Dao (organization)

The Dao (organization)

The DAO was a digital decentralized autonomous organization , [5] and a form of investor-directed venture capital fund . [6] The DAO had an objective to provide a new decentralized business model for organizing both commercial and non-profit enterprises. [7] [8] It was instantiated on the Ethereum blockchain , and had no conventional management structure or board of directors. [7] The code of the DAO is open-source . [9] The DAO was stateless , and not tied to any particular nation state . As a result, many questions of how government regulators would deal with a stateless fund were yet to be dealt with. [10] The DAO was crowdfunded via a token sale in May 2016. It set the record for the largest crowdfunding campaign in history. [6] In June 2016, users exploited a vulnerability in the DAO code to enable them to siphon off one third of The DAO's funds to a subsidiary account. On 20 July 2016, the Ethereum community decided to hard- fork the Ethereum blockchain to restore virtually all funds to the original contract. [11] This was controversial, and led to a fork in Ethereum, where the original unforked blockchain was maintained as Ethereum Classic , thus breaking Ethereum into two separate active blockchains, each with its own cryptocurrency. [12] [13] The DAO was delisted from trading on major exchanges such as Poloniex and Kraken in late 2016. The computer code behind the organization was written by Christoph Jentzsch, and released publicly on GitHub . [6] Simon Jentzsch, Christoph Jentzsch's brother, is also involved in the venture. [6] The DAO was launched on 30 April 2016, with a website and a 28-day crowdsale to fund the organization. [14] [15] The token sale had raised more than US$34 million by 10 May 2016, [16] and more than US$50 million-worth of Ether (ETH)th Continue reading >>

The Dao, The Hack, The Soft Fork And The Hard Fork

The Dao, The Hack, The Soft Fork And The Hard Fork

The DAO, The Hack, The Soft Fork and The Hard Fork We'll try to briefly cover: how and why The DAO was created, how The DAO was exploited, how the soft fork failed miserably, and why everyone was relievedit did so, and how the hard fork lead to a split community and the creation of Ethereum Classic . Part 1 - The DAO - Venture fund evolution The Decentralized Autonomous Organization (known as The DAO)wasmeant to operate like a venture capital fund for the crypto anddecentralizedspace. The lack of a centralized authority reduced costs and in theory provides morecontroland accessto the investors. At the beginning of May 2016, a few members of theEthereum community announced the inception of The DAO , which was also known as Genesis DAO.It was built as a smart contracton the Ethereumblockchain. Thecodingframework was developed open sourceby the Slock.it team butitwas deployed under "The DAO" name by members of the Ethereum community. The DAO had a creation period during which anyone was allowed to send Ether to a special wallet address in exchange for DAO tokens on a 1-100 scale. The creation period was an unforeseen success as it managed to gather 12.7 Ether (worth around $150M at the time), making it thebiggest crowdfund ever. At some point, when Ether was trading at $20, the total Ether from The DAO was worth over $250 million. The DAO wasa complex Smart Contract with many featuresand it should have allowed companiesto make proposals for funding. Once a proposal waswhite-listedbyone of the curators , the DAO token holders (aka DAO investors)would then need to vote on the proposal. If the proposal got a 20% quorum the requested funds would bereleasedintothewhite-listedcontractor's wallet address.Theteam of curators that couldwhite-listaddresses was put in place in order Continue reading >>

Decentralized Autonomous Organisation Hacking In Ethereum In 2016

Decentralized Autonomous Organisation Hacking In Ethereum In 2016

The DAO hack that threatened everything and affected Ethereum Do you remember how a decentralized autonomous organization can create with the use of Ethereum ? In the year 2016, there was a downfall. A startup was working on a DOA project named DAO hack. Details of the DAO hacking in Ethereum in 2016 This is a detail study of the DAO hacking in Ethereum in 2016 Dao was a model which is programmed and initiated by a start-up firm called Slock it. The primary purpose of this project is to make no person venture capital firm that would allow investors to make decisions through smart contracts . The DAO is a DENCENTRALIZED AUTONOMOUS ORGANIZATION this is an organization where rules by computer programs generate Smart Contracts . Specifically, the DAO was built to be an investment vehicle that funds proposals. It does this by allowing its investors , who hold The DAO Tokens . Lets call them TDT from this point to vote on proposals. Voting limits future actions so if a TDT holder votes yes or no. They cant change their vote until the period is has ended. When it made its 27-day crowd sale, the DAO raised 11.5 million Ether .Thishad a value of over US 150 million at the time and 16% of the total supply of Ether . Not only is that a lot of money but it was the largest crowdfund in history. If the proposal on which a TDT holder voted succeeds, the owner can only withdraw their share of Ether balance that is left after the winning project once funded. In contrast, token holders that do not vote can remove from the DAO by initiating a split . Splits take seven days to fork off the funds. Consequently, a division launched by a user seven days ahead of a proposals voting deadline can operate without any risk that her funds will spend on that project. The DAO does not permit funds t Continue reading >>

Was The Dao The Best Thing To Happen To Ethereum? And, Can We Have It Back?

Was The Dao The Best Thing To Happen To Ethereum? And, Can We Have It Back?

Was the DAO the Best Thing to Happen to Ethereum? And, Can We Have It Back? Join our community of 10 000 traders on Hacked.com for just $39 per month. For the first time in human history, around $250 million was stolen last summer, then, by just a code upgrade, the theft was prevented and the money was given back to the rightful owners. Back then, some said that if ethereum collectively decides to save its own people, the currency is doomed. Now, not even a year later, the market says the currency and platform is in fact worth some five times more than even at its peak before the DAO. While, on the other hand, the so called immutable ETC chain is valued by the market just above the bottom reached by ETH after the fork. So, were the critics very wrong? Was the DAO fork actually the best thing to have happened to ethereum so far? The market seems to think so. They probably consider a mature community which was able to quickly reach a pragmatic decision on a very important matter where some $250 million was at stake as something they can work with and trust. The market clearly values a fail-safe mechanism, employed only in the most exceptional circumstances and only when its employment is a no-brainer. Mistakes happen. The market probably thinks one such mistake should not cost $250 million. The critics say but my immutability, as if something either is or isnt immutable. In this black and white world, somehow bitcoin is immutable, even though they have rolled back their chain a number of times, but ethereum isnt, even though it has had no roll back. An easy response to any argument that ethereum is not immutable is by asking them to go and mutate or reverse a transaction. Very good luck with that, because, as always, exceptions prove the rule. So, in one such exception, Continue reading >>

The Dao Refunds - The Ethereum Wiki

The Dao Refunds - The Ethereum Wiki

There are 3 main types of The DAO refunds: All The DAO token holder with a non-zero token balance are entitled to this refund. There is no time limit to this refund, but execute your refunds as soon as possible. Only The DAO token holders who purchased The DAO tokens in the last 2 weeks of the crowdfunding phase are entitled to this refund. There is no stated time limit to this refund, but execute your refunds as soon as possible. The curators can clawback the amount remaining in the contract at any time but have not announced any intentions to do so. All The DAO token holders with a non-zero token balance at block 1,919,999 on the Ethereum Classic (ETC) chain are entitled to this refund. Note that there is a time limit of Apr 15 2017 to execute your The DAO To ETC refunds Note that the time limit to withdraw your DAO to ETC refund has been extended to Jan 2018 - reference WHG withdraw contract extended Check the refunds for your accounts at . The DAO contract raised about USD 150 million worth of ethers (ETH) during the 28 day crowdfunding creation period starting Apr 30 2016. A hacker exploited a vulnerability in The DAO's code on Jun 17 2016 to drain ~ USD 50 million worth of ETH. The Ethereum blockchain was hard-forked at block 1,920,000 to transfer all ETH from The DAO contracts and it's child contracts into a curator's account. The Ethereum Classic blockchain was formed when some miners decided to keep running the old Ethereum client node program without the hard-fork code changes. The curators on the ETH chain created two contracts to provide refunds to The DAO Token Holders (DTH) via: The DAO to ETH Refund WithdrawDAO Contract The DAO to ETH ExtraBalance Refund ExtraBalDaoWithdraw Contract The Robin Hood Group and the Whitehat Group retrieved the ethers (ETC) o Continue reading >>

The Story Of The Daoits History And Consequences

The Story Of The Daoits History And Consequences

I am driven, curious and proactive member of the blockchain & crypto community. Love to write about Technology, Art, History & Atheism The Story of the DAO Its History and Consequences One of the most incredible concepts to be successfully implemented through blockchain technology is the DAO, a decentralized autonomous organization. Decentralized autonomous organizations are entities that operate through smart contracts. Its financial transactions and rules are encoded on a blockchain, effectively removing the need for a central governing authority hence the descriptors decentralized and autonomous. The Decentralized Autonomous Organization (known as The DAO) was meant to operate like a venture capital fund for the crypto and decentralized space. The lack of a centralized authority reduced costs and in theory provides more control and access to the investors. At the beginning of May 2016, a few members of the Ethereum community announced the inception of The DAO, which was also known as Genesis DAO. It was built as a smart contract on the Ethereum blockchain. The coding framework was developed open source by the Slock.It team but it was deployed under The DAO name by members of the Ethereum community. The DAO had a creation period during which anyone was allowed to send Ether to a unique wallet address in exchange for DAO tokens on a 1100 scale. The creation period was an unexpected success as it managed to gather 12.7 Ether (worth around $150M at the time), making it the biggest crowdfund ever. At some point, when Ether was trading at $20, the total Ether from The DAO was worth over $250 million. In essence, the platform would allow anyone with a project to pitch their idea to the community and potentially receive funding from The DAO. Anyone with DAO tokens could vot Continue reading >>

A $50 Million Hack Just Showed That The Dao Was All Too Human

A $50 Million Hack Just Showed That The Dao Was All Too Human

A $50 Million Hack Just Showed That the DAO Was All Too Human A $50 Million Hack Just Showed That the DAO Was All Too Human A $50 Million Hack Just Showed That the DAO Was All Too Human Sometime in the wee hours Friday, a thief made off with $50 million of virtual currency. The victims are investors in a strange fund called the DAO , or Decentralized Autonomous Organization, who poured more than $150 million of a bitcoin-style currency called Ether into the project. Code was supposed to eliminate the need to trust humans. But humans, it turns out, are tough to take out of the equation. The people who created the DAO saw it as a decentralized investment fund. Instead of leaving decisions to a few partners, anyone who invested would have a say in which companies to fund. The more you contributed, the more weight your vote carried. And the distributed structure meant no one could run off with the money. The DAO is built on Ethereum , a system designed for building decentralized applications. Its creators hoped to prove you can build a more democratic financial institution, one without centralized control or human fallibility. Instead, the DAO led to a heist that raises philosophical questions about the viability of such systems. Code was supposed to eliminate the need to trust humans. But humans, it turns out, are tough to take out of the equation. DAO developers and Ethereum enthusiasts are trying to figure out how they might reverse the theft. The good news is that time is on their side. The thief transferred the stolen funds into a clone of the DAO that likely includes code that, as in the original system, delays payouts for a few weeks. Stephan Tual, the COO of Slock.it, the company that built the DAO, says the thief probably never expected to be able to spend the eth Continue reading >>

Ethereum & The Tao Of Thedao

Ethereum & The Tao Of Thedao

Frontier/Blockchain/Macro/Data ScienceCo-Founder & Product Manager at iComply Investor Services Inc. DAO the Decentralized Autonomous Organization An organization autonomously run by its members to pool resources and achieve a common goal. What an exciting concept! While this might seem like a new idea, a very similar organization already exists its called the coop, or cooperative, check out this definition Official definition from the International Co-op Alliance (ica.coop) However, coops often tend to be local and often carry significant burden for administration and governance, now what if the coop could be structured globally, with programmatic governance and administration? For those that have heard of Ethereum, I want to give a frame of reference for existing capital markets to grasp the true potential and raw power the world now has at its hands, and you better believe its more than just cryptocurrency, tokens, and coins! Fedwire is a system used by the Central Bank in the United States (the Fed). This serves as bottom level infrastructure to facilitate transactions among financial entities and the central bank, as well as within each other. All banks in the states are built on top of this layer, adding services to consumers or consumer facing tech on top. Pretty powerful stuff. Swift is another 'network' or protocol enabling interbank transfers across the world, each bank is essentially a node. Its how wire payments work, and the banks take a cut on the sender and receiver end of every transaction. We, the people, dont have direct access to systems like this, but instead interact on top of these systems, through a third party, like a bank. Does this mean intermediaries are the big bad wolf? Not at all, they serve an immensely useful function to help money move Continue reading >>

What Is A Dao? - Coindesk

What Is A Dao? - Coindesk

Imagine this: a driverless car cruises around in search of passengers. After dropping someone off, the car uses its profits for a trip to a charging station. Except for its initial programming, the car doesnt need outside help to determine how to carry out its mission. That's one "thought experiment" brought to you by former bitcoin contributor Mike Hearn in which he describes how bitcoin could help power leaderless organizations 30-or-so years into the future. What Hearn described is one dream use case for a decentralized autonomous organization, or a DAO, an idea that swirled through the community not long after bitcoin was released in 2009. The thought is that if bitcoin can do away with financial middlemen, then maybe companies and other organizations can one day operate without hierarchical management. In short, DAOsaim tohard-code certain rules that a company would from the get-go. This could be setting aside a certain percentage of earnings for a causeordetermining a process by which such a rule could be changed. In the abstract, this is similar to how a normal company works. The big difference is that the rules of normal companies are not enforceddigitally. The best-known attempt at creating such an organization was called " The DAO ." Launched in 2016, the project failed in a matter of months, but its a good example of what people have in mind when they talk about the technology. The plan was for participants to receive DAO tokens, then vote for which projects to fund. For selecting projects to invest in, it relied on the "wisdom of crowds." There are a few ways that The DAO intended to improve on the governance of todays organizations: Anyone with internet access could hold DAO tokensor buy them DAO creators could set whatever rules they voted on. In abstract Continue reading >>

What Is Dao And How It Works

What Is Dao And How It Works

What is DAO and how it works. Examples of DAO. How to become DAO shareholder, story of The DAO. What is DAO and how it works. Examples of DAO. How to become DAO shareholder, story of the DAO For updates and exclusive offers, enter your e-mail below. Imagine a vending machine that not only takes money from you and gives you a snack in return but also uses that money to automatically re-order the goods. This machine also orders cleaning services and pays its rent all by itself. Moreover, as you put money into that machine, you and its other users have a say in what snacks it will order and how often should it be cleaned. It has no managers, all of those processes were pre-written into code. This is, roughly, how a DAO or a Decentralized Autonomous Organization, works. The idea of such management model has been circulating in the cryptocurrency community ever since Bitcoin managed to get rid of middlemen in financial transactions. Similarly, the main idea behind DAO is establishing a company or an organization that can fully function without hierarchical management. It is essential to draw a distinction between DAO as a type of organizations and The DAO, which is merely a name of one of such organizations. The project was one of the first attempts at creating a DAO and it failed spectacularly within due to a mistake in its initial code. Initially, Bitcoin was considered to be the first ever fully-functional DAO, as it has a pre-programmed set of rules, functions autonomously and is coordinated through a distributed consensus protocol. Since then, the use of smart contracts was enabled on the Ethereum platform, which brought the creation of DAOs closer to the general public and shaped their current look. But what does a DAO need to be fully operational? First of all, a set Continue reading >>

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