Part 2: More On Decentralized Autonomous Organizations (DAO)
Updated: Aug 11, 2022
If you're someone who keeps up with the ever-changing world of tech, you might've heard the term DAO, also known as a decentralized autonomous organization. Interestingly, these unique entities aren't affiliated with a specific country and don't follow a traditional hierarchy. Follow along for a bite-sized blog on an introduction to the world of DAOs.
There Are Some Drawbacks
In June 2016, a significant research paper came into circulation, stating that DAOs showed some serious cybersecurity vulnerabilities requiring immediate attention. These weak points were hazardous for investors looking for that next major DAO project, potentially leading to significant financial losses if a security breach occurred.
Then in June 2016, some hackers took advantage of these weak points and stole 3.6 million in Ethereum, or about $50 million. This devastating heist left many in shock, with some beginning to take these vulnerabilities seriously and others saying it should be banned entirely.
The results were that investors were left shaken, and the DAO was seen as incredibly vulnerable to hackers, causing an absolute panic. As of 2017, the Securities and Exchange Commission deemed DAOs security as users needed to convert it into cash, and with such attacks, the value could ebb and flow dramatically.
Looking to the Future
Many people consistently ask about anything from blockchain technology. Overall, predictions of cryptocurrencies and the future of DAOs are questions about what the future might hold for these innovations.
Initially, the DAOs continue to grow as 2021. The Maker Foundation, a revered institution in the crypto space and the first legitimate DAO, announced that they could conclude all operations by year's end. With their DAI stablecoin, the Maker Foundation explained that the DAO market isn't what they envisioned and doesn't see a future in this tech space.
But there are some successful examples out there. Dash is one of them, a cryptocurrency that has done quite well and is an excellent investment. This digital asset, a great example of how decentralized autonomous organizations can make it big, will help set the tone for future projects worldwide.
Many experts feel this is a hiccup in the long-term process and adaptation of this technology, something they say will likely have a big comeback. For investors, the feeling is that DAOs will eventually become the dominant business model, completely overtaking the more traditional structures.
Hungry for more? Join me each week, where I'll break down complex topics and dissect the latest news within the cybersecurity industry and blockchain ecosystem, simplifying the world of tech.