If you are abreast of Blockchain crypto news, then you must be knowing the fact about DAO (Decentralized autonomous organization). It is the most successful concept that came through blockchain technology. The encoding of all financial transactions takes place in this technology. Like cryptocurrencies, it eliminates the role of central authorities like government. Hence it is decentralized as well as an autonomous concept. It functions via smart contracts. Today, we will be knowing about DAO and will also know about its ongoing impact.
DAO benefits investors with access and much control and the absence of central authority minimal costs. If you are not in touch with the latest news on Ethereum, then let us date you back in the year 2016, when the inception of the DAO, also termed as Genesis DAO, was announced by some members of the Ethereum community. The development open-source of the coding framework was done by the Slock.it, but the team was deployed under Ethereum community members under the name of DAO.
When The Beginning Became A Debacle For DAO
While knowing about DAO, it is very essential for you to know that the beginning period of DAO in the year 2016 proved very crucial. It was when a coding error discovered by a hacker, who grabbed all the funds from it. In a very short period of hacking activity, 3.6 million ETH were found missing. However, it was not actually the Ethereum, which can be blamed for the bug that came out. The loophole was rather spotted in an application that was made on it. There were multiple flaws in the code that were written for the DAO.
The non-functioning of the website does not indicate the non-working of the internet. All it conveys is the problem on a website. The hacker avoided draining of DAO with no specific reasons when he could have carried on with it. However, the situation got under control by the Ethereum community that introduced the number of proposals.
Impact Of DAO
What you need to be knowing about DAO is that the despite folding of the DAO project, the impact still continues to follow. The development team of the current blockchain seeks DAO for example as guidance. The first important lesson taught by DAO is to getting secured blockchain platforms established.
As mentioned above, hacking of DAO did not cause due to Ethereum blockchain but by a smart hacker, who very cleverly tracked the error in the coding and then drained out funds. If the written code could have been written correctly, then this hacking could have not taken place.
Secondly, the ruling on the DAO by SEC has led to blockchain startups introducing new ways to keep federal regulation and security registration at bay. The method which is being preferred in this regard is SAFT.
While knowing about DAO, you knew about the first Ethereum ICOs of investment funds that proved to be debacle because of the coding loophole. This made hackers made benefit out of it by draining off maximum funds. The cause of this hacking came due to coding which was wrongly written. Had it been corrected, then this could have not happened. The Slock.it team made a mistake for not auditing the smart contracts properly which resulted in a money-draining bug. The Ethereum foundation even came up with a launching Ethereum classic to save investors and nail hackers, which became a big problem for the community. To know more about crypto news, stay abreast of the latest cryptocurrency news.