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Enter, The DAO

X

At the time of writing, $64,197,982.19 has been raised by Ethereum-based decentralized autonomous organization, The DAO.

The average person on the street would have no idea what to make of that sentence outside of “oh, some guy has just made an absolute fortune”. They’d be right in so far as it’s a lot of money, in fact The DAO is arguably the largest second largest crowdfunding campaign of all time – but that’s a whole separate debate around the semantics of ‘crowdfunding’. Of course no one has actually made any money; cryptographic value has simply been shifted into a decentralized investment fund that is owned by anyone who chooses to take part. Slock.it, the company that initially created the code to make The DAO possible, has absolutely no more or less power over The DAO than any other token holder. In fact, the slock.it team will be submitting a proposal to The DAO in return for funding – should The DAO decide not to invest in slock.it then, well, they won’t receive any funding.

This new form of investment is certainly exciting for anyone in the cryptocurrency space, but the implications are so much farther reaching. This is the first major use-case of the Ethereum blockchain over that of Bitcoin’s, and The DAO has already drawn the attention of Bloomberg, MSNBC and The Winklevoss Twins (who recently added Ether to their Gemini exchange platform). All of this attention has undoubtedly attracted high volume investment into Ether and The DAO – likely leading to the Ether rally we’re currently experiencing.

The most exciting part? This is quite literally only the beginning. Should The DAO be successful, it will provide a constant flow of funding into the Ethereum space, fuelling further blockchain-based commerce and leading to more investment into The DAO – and so on…

With The DAO’s crowdsale running until May 28th, who knows where this bullish run will top out.

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Nick
Nick Founder