What is a DAO? Exploring the Potential of Decentralized Autonomous Organizations

DAOs (Decentralized Autonomous Organizations) are booming with new people coming in each second. Discord servers are buzzing with discussions, knowlegde sharing, and excitement. What are they, and are they worth any attention?

What is a DAO?

A DAO is simply a decentralized autonomous organization that focuses on digital assets. In practice this means they take in pre-existing projects from the Ethereum community and push them to real-world production. They operate based on the philosophy of ethereum and are no longer organized around blockchains as a technical infrastructure but around software and its applications.

Each DAO is owned by a fully regulated and licenced entity, like a foundation or company. Any code created for the DAO and associated projects must be made available to the entire community for review, development, and improvement.

The Potential of Decentralized Autonomous Organizations

Every year the number of people interested in joining ICOs goes up. They’re meeting the expectations of early adopters, however in the recent months it seems that the same traditional process of soliciting for interest has changed.

As the blockchain technology is being implemented on a large scale by more and more companies, crypto enthusiasts have slowly began to question whether these ICOs will simply devour the prospective investors’ money. It has become harder and harder to make money from these endeavors, with two projects, Bancor and Digix, running out of funds and going bankrupt.

With the launch of Ethereum, something new emerged. A decentralized, blockchain-based platform that has gained huge traction in the ICO market.

Why All the Buzz?

DAOs are not a new concept. It has been quite common in some ways for years (see Blockchained), and has even given rise to a few decentralized apps (like Ethereum, in addition to numerous decentralized social networks, video games, and more). But it was largely due to some miscommunication about what DAOs are, and why they’re here, that the concept took off in the first place.

Decentralized Applications (or DAPPS)

This is the heart and soul of the DAO revolution. DAPPS are applications that work, communicate, and develop in complete isolation. It is an application (or more specifically, a group of applications) that is spread all around the world and can act on its own (or in concert) at will. This includes games, web-services, voice-chat software, social networks, virtual reality applications, and more.

Just like Bitcoin, this decentralized model allows for huge gains in efficiency and security. When a problem arises, it can be solved from any part of the globe.


DAOs are a fascinating new movement. The possibilities they open are vast, and they’re growing at a breakneck pace. We’re still digging into them, learning what they are, and trying to understand the factors that give them power.

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