Certified Blockchain Professional - Module 08: Decentralised Apps (Dapps)

As previously discussed, I'm doing the Certified Blockchain Professional course. It is self-directed learning, so I'm going through it at my own pace. In order to consolidate my learning, and help organise my thoughts, I'm blogging about my reflections on each module.

These are mostly notes to myself - but I hope if you find something interesting (or incorrect) that you'll leave a comment.

A short and pointless chapter. No real discussion of how DAOs actually work, or example code. No discussion of the social implications.

DO - Decentralised Organisation. A program running on a blockchain - as one or more smart contracts. Parties interact via the DO. Requires humans to input data and execute logic.

DAO - Decentralise Autonomous Organisations. Same as above but without the humans. Operates based on information on-chain. No legal status and questions over jurisdiction given they run in multiple places.

DAC - Corporation. Same as a DAO but can pay profits / dividends to shareholders.

DAS - Society. Imagine if all government services were smart-contracts. Land registry, marriage certificates, birth certificates, passports etc. Can't be censored or capriciously denied service.

The General Theory of Decentralized Applications, Dapps

DApps are:

• Open Source
• Records must also be open and stored on chain
• Use a native token for payment
• Generate tokens according to Proof of Value (which may be PoW)
• Changes only allowed by majority consensus

Hilariously:

The most famous DAO project is The DAO, which raised $168 million in its crowdfunding phase. The DAO project was designed to be a venture capital fund aimed at providing a decentralized business model with no single entity as owner. Unfortunately, this project was hacked due to a bug in the DAO code, and millions of dollars’ worth in Ether currency (ETH) was siphoned out of the project and into a child DAO created by hackers. A hard fork was required on the Ethereum blockchain to reverse the impact of the hack and initiate the recovery of the funds.

ASSIGNMENT

• Study DAO at https://en.wikipedia.org/wiki/Decentralized_autonomous_organization
• Study the DAO at https://en.wikipedia.org/wiki/The_DAO_(organization)

Answer the following questions:

• What is a DAO?
  • A set of smart contracts, running on a Blockchain, which is co-owned by multiple people.
• When was the DAO attacked?
  • Launching in April 2016 and attacked in Jun 2016. LOL!
• What was the outcome?
  • About $50mm worth of ETH went to the attacker(s). Naughty!
• How was it mitigated?
  • In order to "bail out" the DAO, Ethereum instigated a "hard fork" which effectively returned the money.
• Was it really mitigated? What happened to the funds (ether)?