The DAO FAIL

[freshman777]

this whole ethocreampie ecosystem included the daos are useless and worthless craps, without the whales to manipulates the fake volume it's already dead long ago. whales are now moving to legitimate platform like LISK

And how exactly LISK proved to be legitimate?

benthach invested in it, seems legit.

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[iamnotback]

5. Decentralized Autonomous Organizations (DAO). Technically the idea that investors buy a colored coin which enables them to vote on how the funds (denominated in which every token was exchanged for the colored tokens) are spent, and to sell this colored coin at-will on the market. Issues:

• Game theory appears to be insolubly broken in that "No" votes are more expensive/risky than selling your vestment. There doesn't appear to be any remedy because even holding up funds for a grace period doesn't stop the run on the price after the "Yes" on a stupid proposal. However, I thought of a possible mitigation is to limit the value of proposals that can be voted on simultaneously, so that no bad outcome can't drastically impact the price. But this doesn't mitigate the game theory that there is an incentive for those who want to steal the funds to buy up the colored tokens so they can influence the outcome of the votes and those who see it has been infiltrated have more incentive to just sell than to fight, thus the infiltrators get to buy the tokens at cheaper and cheaper prices and yet the funds they control does not diminish in value. The game theory seems insolubly broken.
  
  Eric S. Raymond wrote about the Iron Law of Political Economics, and it is always a power vacuum. When pooling funds, the game theory is a mess.
• Organization is the antithesis of decentralization. Business projects require cohesion and continuity with fluidity of decision making. There is no way to make this into a decentralized structure which doesn't destroy the essence of efficiency of production. Production is highly interactive and collaborative. The time lag in the communication overload of the Mythical Man Month can render a project into gridlock oscillation between competing options. Top-down voting is top-down governance, which is the antithesis of decentralized production. Decentralized version control open source (DVCS) solves this discord to obtain resonance by allowing every participant to have their own perspective on changesets. DAO is entirely wrong model for decentralized production. It fights against everything we learned with decentralized open source development, which is that the individual should be empowered to act independently.
• Note I could envision tracking investment, decentralizing the trading of the shares (colored tokens), voting on a board, and distribution of dividends. But this voting on each proposal as a flat democracy does not work.

it is hype for scam purpose only

In the case of DAO, Slock.it, and Augur, then that seems to be the case. There is no valid use case which isn't game theory broken for those. Expect The DAO to eventually collapse in a massive clusterfuck of theft and waste with most losing their money. Wise people would get the hell out of The DAO as fast as they can, because the DAO is broken in the sense that you can be jammed from exiting.

Decentralized crowd funding might be viable.

I see the DAO as a game of who can compromise it first and cash out the funds to themselves.

Yup that is what it appears to be. But can you fathom what this is going to do to all the bagholders and to ETH.

I got your point that maybe there is some game theory to how long you stay vested. You like Russian Roulette I guess.

The SEC will be coming... this is the event that will start the SEC's involvement in actively regulating CC. Thanks to Vitalik and Tual.

[danel]

I don't consider DAO as fail, give it few more months it will surely come back stronger and better after all known issues have been fixed.

[iamnotback]

I don't consider DAO as fail, give it few more months it will surely come back stronger and better after all known issues have been fixed.

The game theory issues appear to be fundamental. Meaning they can not be fixed.

It is analogous to wanting to build a skyscaper to the moon. We can't do it. No matter how good our technology is.

Some things are truly impossible.

[gustav]

I don't consider DAO as fail, give it few more months it will surely come back stronger and better after all known issues have been fixed.

You can't fix humans. Even if all technicals were resolved (which they won't be) you still have the errors and loopholes in the democratic process. It takes a few people and a good understanding about the inherent weaknesses of majority-votes to let a small group of knowing people steer this to their liking. Most people lack basic knowledge about democracy to understand it's failing either way.
You just don't consider it a fail because you don't have all relevant info.
Sorrry, i don't have time to discuss democratic weaknesses and exploits in all depth currently but the dao is cerrtainly open to more attacks than one could count. There are so many angles from which to attack this, it's totally incredible.
People throwing such huge money at it shows how massive the amount of stupid money in crypto really is. Boggles the mind.

[iamnotback]

Yet, to keep The DAO from capsizing, Tual said he thinks members need to accomplish three objectives – rounding out its list of curators, amending its governance model to see after the concerns of voting members and investing in sound business ideas.

Bribe the curators.

This is just the corruption of government we are all fighting to remove with block chains and then we bring it right back again and place this $150+ million UNREGULATED honeypot to attract the flies.

Since it is unregulated, the criminal mindsets will be drawn to this like flies to honey.

It is just a matter of time before The DAO is in political bickering and probably worse with the power vacuum being always a "winner take all" phenomenon.

[Spoetnik]

Lessons will learned and a few guys have been giving warnings to the LOUD masses
..that falls on deaf ears of course.
As usual and as always these dipshits in crypto act like obnoxious mouthy brats defending "their coin"
then VANISH when they have dumped (probably hopping to another Alternate Forum account for shilling game round #2)

What i am getting from this topic and the replies (that matter and have some intelligence)
Is that, knowing what you are investing in has become now more than ever tantamount !
It's just not an option anymore to blindly invest in what ever is on Poloniex etc.
OR... risk getting burned hard !

So what we have is people peering into the tech.. REAL REALITY
Vs. the dipshits you see on this very topic spouting off like a cat scratching you Shilling it up with personal attacks.
Shows their incessant bag holding paid hype campaign shilling agenda's.

I don't base my opinion on people solely by their support for a coin.
But by the quality of their comments..
And i would never in million years have a shred of respect for the whole crew of irritating
obnoxious brat shills like stout minecache & about a dozen other accounts.
(if you covered their names you can NOT tell them apart) suspicious ? uhh yeah LOL
Here is an example of more of this brats childish name calling shill stupidity.. for ETH of course.
https://bitcointalk.org/index.php?topic=1387036.msg14105080#msg14105080

When the SEC comes knocking i hope he is 2nd to get led away in cuffs (after Butterin)
Who knows.. maybe HE IS Butterin ROFL

People take my commentary as my personal opinion.
I know i have a unique perspective on things a lot less so smarts on the tech.

Other guys here are crypto tech wizards and know this the code far better than i ever will.
Because they did the work.. and when those guys are raising red flags on ETH & DAO
i suggest you listen  


Fear Uncertainty & Doubt ?

The only guys that ever cried FUD were doing it to smooth over a scam coin.
Further more they don't even know what it means and have actually tried to redefine the word  

You bet your god damn bloody ass there should be FUD !
Looking at the actual thing in question combined with the savage amount of risk
and the overall context and history of these "scheme coins" <-- made up new term just now
then fuck yes there should be FUD.. and LOTS OF IT !

By my estimates (before ETH / DAO / LISK / Waves / ICO #3,023 / ICO #3,024 etc)
We all in Crypto had already been burned by around a BILLION dollars usd $$$$$$
Never mind gambling sites other misc services escrows etc.

So tell me smart fuckers when do *YOU* have F.U.D. ?

If you looked around and did not have any FUD i would have to think your a brain damaged retard
..or a thief.


Spoetnik'ism Dictionary Definition: "Scheme Coin"

/skēm/koin/

A block-chain based alleged currency with some gimmick that was distributed via an ICO
A scam coin solely for the purpose of trading on centralized exchanges for profit $$$

.

[spartak_t]

Call me stupid, but I have never ever researched Ethereum, the DAO and such (I will not mention others), because of two simple reasons:
1. They are gathering vast amount of money via IPOs/crowdsales. I'm not against that! Funding projects its not a bad thing, but not at this stage of life of the cryptocurrencies, and not with that kind of money! If Bill Gates or Warren Buffett (I'm just giving an example) decide to throw money into a project, then I'm all okay with that! I will even invest! I just believe that if we "do it for the sake of cryptocurrencies", then it can be done with a lot less money. Currently people are throwing their 0.001 BTC holdings with the only hope to make profit firstly in fiat money, and secondly in Bitcoin. This is not the way!
2. How come a project claims to be "decentralized", yet it has CEOs, CTOs, CFOs, CMO etc...?! HOW THE F* THIS WORKS?

Houston, we have a problem here and this problem refers to all of us. No matter which coin/token/asset/somethingdumb you are supporting!!!

[iamnotback]

Thanks for sharing that epistle from CIYAM (community can be decentralized with DVCS open source):

Are "virtual corporations" really a great idea?

Could creating such autonomous entities actually make the world an even worse place?

It doesn't matter, because as I explained in the OP, a decentralized management structure by mass voting is a dysfunctional structure. It will simply blow up and fail to produce anything but redistribution of the money pool. I enumerated two reasons:

1. Organization is the antithesis of decentralization.

2. Money pools + voting = power vacuum

The DAO is nonsense except as a game around money pool power structure and politics. I am not even interested in discussing it further as it is a waste of time. Investors are doing that because they are deluded into thinking they can get rich want to lose their money. I think n00bs feel more comfortable with politics, than technology. They understand are familiar with politics. The DAO is taking technology that n00bs don't understand and packaging it in something the n00bs think is fair— democracy. Yet democracy is a power vacuum that always leads to totalitarianism. Since n00bs have never figured this out in 6000 years, then this can be reused to enslave them over and over again.

Vitalik, Tual, Larimars, etc.. seem to have wild fantasies that have no grounding in reality. I don't understand those dudes. Don't they know what they are building is crap. Or are they really deluded by their naive fantasies. Or maybe subconsciously the money is enough to motivate them, i.e. they are clever marketers, since it is obviously much easier to sell the fantasies to n00bs than to build mass adoption. Any way, I don't have time to worry or wonder about the way their thinking operates. And I don't want to go back into criticizing people. I will stand aside and observe them crash and burn. Unfortunately, those guys probably walk away with $millions and the n00bs lose. Boohoo that has been life for 6000 years.

I am just trying to ascertain if there are any valid use cases that I need to be aware of.


Edit: others are pointing out that investors better get the fuck out of the DAO and accept the -33% loss else they are going to end up losing everything:

https://bitcointalk.org/index.php?topic=1494333.msg15157775#msg15157775

Who ever invested in the DAO deserves the -33% instant loss to teach them a lesson. Those who hold on, will lose more.

I do expect the SEC will be coming after Tual et al, or who ever ends up capturing the power vacuum and keeping all the ETH wealth as it is extracted from the system by n00bs selling out as they realize it is fucked and by forcing "Yes" votes that pay to themselves. See the game theory I explained in my OP.

[Dinosaur]

I really regret giving all my eth for dao

[jmpFCE2]

I really regret giving all my eth for dao

being a clueless inbred doesnt help , does iT.

You could sell your DAO for a profit N O W unless you are a total idiot...

[Spoetnik]

I see a problem and have for years now..

They say Spoetnik what coin should i invest in..
And i am sorry but i don't know what to tell you guys anymore.
Times have changed and the "Schemes" get more complicated and there for far more risky.
Knowing what you are investing is critical !

So i see a NEED ..people are clutching money (real money)
And they must find a coin to invest in, because they HAVE to PROFIT ..and ASAP !!!
This is not a matter of i seen a project that inspires me and speaks to me
and there for i want to "support" it..
Instead we have guys who simply show up here to make a fast buck (fast cash / fiat $$$)

@KO
The OP's comment about how much is ACTUALLY needed for many for these projects was..
..a slap across the face of Crypto !
He slugged a few thousand of you on your ass in 1 sentence... K fucking O !
He's right !

@BlockNET
And that too was what pissed me off about the BlockNET ICO for hair under a million dollars.
In that example the dev claimed he had wrote 75% of the code before launching the project publicly.
So he was effectively asking the public for a $1,000,000.00 worth of Bitcoin.
..so he could at a leisurely pace sit at home puttering around with code on Github
..posting random coming soon comments on his self-modded ANN topic for the next year or two
(and that is EXACTLY what he did do) NOTE: He couldn't even keep hosting paid a year later.
And right now ? He is flying under the radar ignored (he got away with it and Bittrex and Poloniex made their cut etc)

"Looking For Work:"
And i knew damn well this would simply light a fire under the other scammy greedy cunt dev's "looking for work"
Which is why no one complained about BlockNET and they all ran to support it even under intense flaming & drama.
Everyone was eager to get a slice of the pie.. no matter how scammy it is !

How much did the BlockNET dev make per hour giving him a check *in advance* for a million dollars ?
Like yeah i get it.. you want to be "paid" for your coding work etc
But how much does it amount too ? $1,000 an hr for a vaporware concept project ICO "Scheme Coin" ?

Copy-cat ICO Schemes Unleashed:
You all stayed silent on that and we seen an explosion of copy cat ICO schemes unleashed..
And we seen the greedy profiteer dregs go along with it all so they could profit off them all.

When i asked the dev of BlockNET why he needed a million dollars in Bitcoin
He told me word for word, "to ensure it's a success"

Crypto-Minimum Wage Increase ?
When i started this coin devs would work on projects for FREE.. mostly.
Satoshi did not put his hand out and say i want a MILLION DOLLARS first before i release anything..

How much did this DAO project pull in ? (ahead of release ?) and when will it be compete and working as intended ?

Further more..
I will harp on another one of my points i have stuck in my craw lately

The DAO shit can never be a currency nor any of these shitty ICO's because
they could never exist with-out the need to acquire FIAT cash money $$
..in order to BUY Bitcoin to BUY Shitcoin "tokens"

Get it ?

So tell me smart guys how do you create a currency that REPLACES FIAT
if you *NEED* Fiat in order to Buy the damn shitcoin ROFL
See a problem yet boys ?

EDIT: Spelling

[iamnotback]

Copy-cat ICO Schemes Unleashed:
You call stayed silent on that and we seen an explosion of copy cat ICO schemes unleashed..
And we seen the greedy profiteer dregs go along with it all so they could profit off them all.

When i asked the dev of BlockNET why he needed a million dollars in Bitcoin
He told me word for word, "to ensure it's a success"

Crypto-Minimum Wage Increase ?
When i started this coin devs would work on projects for FREE.. mostly.
Satoshi did not put his hand out and say i want a MILLION DOLLARS first before i release anything..

It is true that the ICOs aren't really providing any funding for development that matters. It is just the insiders cashing out.

That being said, no top notch s/w developer will work on a risky project that might net him $0, if he can't at least generate $250,000 per year of effort. And that is really on the low end since most of them can make that much (and more with stock options) in a job in silicon valley.

For example, I have been doing research and basically "working" in crypto since 2013. If I launched a project, I would expect to recover those years of investment.

But I also wouldn't waste all the funds on nonsense development of pie-in-the-sky fantasies.

But any way, I am not going to ask anyone to give me an ICO money. Mined distribution is clearly the fair way to launch a coin.

But just keep in mind if the developer is receivng a $million for years of effort, it is really just about break even, if he is a top developer. Please be respectful of the opportunity cost of top developers.

Also even the developers have a right to seek higher ROI. Speculators invest and risk to get a big payoff. When developers invest their time/effort and risk to get a big payoff, this is capitalism.

Having said that, afaik most of the developers of altcoins are not top developers. Afaics, most of them have nearly no experience as employed software developers before their work in crypto. This is excluding the Bitcoin core devs of course. There are experienced developers in the Bitcoin ecosystem.

The DAO is only 2080 lines of source code. And it can never be "fixed" or "finished" any more than it already is, because it is a flawed concept and I have difficulty believing Tual doesn't realize it.. It probably wasn't intended to grow into something great. It was probably a quickie rush to latch on to the euphoria about ETH and so those looking to cash out of ETH at the double-top at $15, had another option The DAO. It was probably a timing and marketing product decision and not an engineering or long-range focus. I could understand your criticism of something like that. But it is a free market and you can't stop them.

[CraigWrightBTC]

i think it is not fail but it is just correction of price. DAO is new coin i will wait and see for next decission.

[bones261]

i think it is not fail but it is just correction of price. DAO is new coin i will wait and see for next decission.

   The DAO isn't a coin. It is a smart contract that resides on the Ethereum blockchain. People sent ETH to the contract address which created tokens. The intended purpose of these tokens is to give the owner voting rights and possibly income generated for the investments the DAO approves. The tokens are not really a currency since the primary purpose for them is not to buy goods and services or to pay debts.
  If my suspicions are correct, the DAO was a smashing success. I personally think it was just a scheme to get people to buy up Ether tokens on the market, and pump up the price on ETH. Then the ETH is basically locked away in some "fund" that cannot be easily liquidated. Everything about the DAO is designed to delay liquidation as much as possible. Even the obvious suppression of it's price on the market, which is below the ICO price.

[Spoetnik]

That being said, no top notch s/w developer will work on a risky project that might net him $0

Did you read where i pointed out how it started as dev's working for free ?
And since all their old code is recycled they must not have been that bad of a dev LOL
Satoshi was an amateur ?
How about the other early coders ?

Who are these coder(s) that deserve quarter million dollar salaries and guaranteed work / paychecks ?

This is not the place for them (if they really exist)
And if freelance 250k salary dev's are here working on crypto coins ?
Then i expect them to improve the distribution of coins (and none of them ever have been)
..and not simply unload yet another god damn fucking ICO scheme.
GET IT ............ yet ?

AKA:
Work on the glaring obvious big problem facing all of crypto (that all these so called dev's continually ignore)

You need minimum 250k devs ?
Look elsewhere because this is not the place for you "PRO" coders.

Further more if you can not afford to pay your rent while you code the whole entire world a brand new digital currency ?
..then leave it up to those who have the means financially to pull it off.

In other words don't sit there and create the problem to sell me the solution !
AKA: I need work so i need a paycheck (for my coin scheme)
Which solves nothing but adds yet another ICO to Poloniex or Bittrex etc.

YOU WANT 250k mother fuckers ?
I better god damn fucking see an improved version of Bitcoin.
And it better have MAJOR improvements on it's initial distribution.

or..

I WILL TAKE YOUR 250k and put out my own "Scheme Coin" ICO

yeah i can code too cunts.. i have been at it for DECADES !

Where is my paycheck that is the North American equivalent to winning the lottery ?
(many people would love to win 250k or a MILLION DOLLARS playing the lottery)
So what is the criteria cunts ? Unloading another fucking ICO on the public ?

fine....... count me in

PAY ME THEN CUNTS !

Make the check for a MILLION DOLLARS out to Spoetnik

And fuck yeah..
..if all these other SCHOOL CHILDREN can do it then i as an adult with decades of coding & cracking experience should deserve it.
- I have a resume a 10 miles long.. i made a file sharing program for example.
- The BlockNET dev's were shown here via pictures at school having water fights at lunch
and eating in the cafeteria at SCHOOL

Lets spin.. lets spin the bloody god damn bull shit some more guys.  

but.. can i play too ?  
Why do i have to sit on the side lines broke with morals ?

Just ignore my "FUD" guys and make our your checks to Hollywood High California grade 9 class
..they are already working on ICO #2,004 ..with world class 250k salary code of course

By the way guys.. in case you forgot ?
We are talking about Alternate Currencies (see what forums section you are in ?)
Not i made up a fake "use" for a "block-chain" so i tacked a token onto it and then unloaded another ICO Scam Forum section..
There is a section for those.. it's called the "Scam Section" here.

And hey if you all don't know what a Currency is ?
..let me know i can explain it too you REEEEEEALLY fucking slowly.
 

[iamnotback]

That being said, no top notch s/w developer will work on a risky project that might net him $0

Did you read where i pointed out how it started as dev's working for free ?
And since all their old code is recycled they must not have been that bad of a dev LOL
Satoshi was an amateur ?
How about the other early coders ?

Who are these coder(s) that deserve quarter million dollar salaries and guaranteed work / paychecks ?

Some estimate Satoshi mined 1 million BTC so roughly a $billion.

Very good developers do command ~$150 - $250k per year plus stock options.

You get what you pay for.

That being said, the altcoin space appears to dominated by hucksters with some coding abilities.

So I am not dissuading you from criticizing the level of ethics and professionalism, but I am telling you that if you expect me to work for $0, then you will not have my respect.

[manselr]

I think DAO still has a good one or two pumps on it before it deflates like yet another alt. ETH probably has twice the pumps before it becomes irrelevant.

[bones261]

I think DAO still has a good one or two pumps on it before it deflates like yet another alt. ETH probably has twice the pumps before it becomes irrelevant.

   No wonder none of the proposals for the DAO are anywhere near the 20% quorum needed to even count. Most are just checking out POLO & Bittrex, hoping for the next ETH/DAO pump so that they can unload their tokens on the next sucker. They don't want to use their tokens to vote on stupid proposals, which is what they were supposedly intended for. They want to see some whales pump up ETH to some god awful value, and hope the DAO leech tokens follow suit.
   Oh well, I'm probably being a hypocrite anyway, since I am doing the same thing.   However, I refuse to shill this shit, anymore, in a pathetic attempt to escape my poor judgement in this case.

[Malayko]

I think DAO still has a good one or two pumps on it before it deflates like yet another alt. ETH probably has twice the pumps before it becomes irrelevant.

   No wonder none of the proposals for the DAO are anywhere near the 20% quorum needed to even count. Most are just checking out POLO & Bittrex, hoping for the next ETH/DAO pump so that they can unload their tokens on the next sucker. They don't want to use their tokens to vote on stupid proposals, which is what they were supposedly intended for. They want to see some whales pump up ETH to some god awful value, and hope the DAO leech tokens follow suit.
   Oh well, I'm probably being a hypocrite anyway, since I am doing the same thing.   However, I refuse to shill this shit, anymore, in a pathetic attempt to escape my poor judgement in this case.

You should get a medal for this post or some sort of award. People are not realizing that the dao was a big mistake and could never really work. I wonder where the next school of fish are going to come from to let the first school of fish out.