Topic: Valid uses cases for Smart Contracts, Dapps, and DAOs? - page 2. (Read 4698 times)

What is a DAO?

In a normal corporation, the investors delegate control to a board of directors and the board decides whether to retain profits or pay dividends and hire/fire the CEO.

In DAC/DAO/DO, the investors actively vote on issues. The distinctions between those three have to do with the structure of this control...

Let's first review Vitalik's chart below:


Notice on "Internal Capital" table, the horizontal line separating "Automation at the center" at the top from "Humans at the center" at the bottom is labeled "DO" for decentralized organization, because "DO" is decentralizing the "Humans at the center" but not automating the decisions of protocol at the center controlling the "Human at the edges" (where edges means who do the work).

And the vertical line separating "Automation at the edges" on the left from "Humans at the edges" on the right is labled "Tools" because they are doing the majority of the work but not automating (thus still requiring human workers for) their operation.

You can see that table is quite insightful and abstract. This is an example of why people think of Vitalik as genius. But it is all quite obvious if one were to sit down and think about deeply for a while as obviously Vitalik did.

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Now I am going to demonstrate (in a very sleepless and almost delirious mental state so please excuse the low quality of the prose) I am an abstract forward/deep/paradigm-shift thinker similar (but different of course) to what some people observe/praise about Vitalik.

It is on the term "autonomous" that Vitalik's taxonomy gets murky (muddled) as he admits. It appears that Vitalik conflated "automation" with "autonomy". It appears that Vitalik thinks that we require automation in order to obtain autonomy.

Here is the insight that occurred to me in the past 48 hours or so (the days have all run together). Whereas, I am thinking the autonomy attribute is applicable to the "humans in the center" involved in the control. In other words, DVCS open source enables each human participant to be autonomous because each can have their own individualized repository. Automation has nothing to do with it. The key technological breakthrough for DVCS was the relative changeset logic, using a hash to identify changesets, and storing the repositories locally, which isn't automation but rather a protocol for destructuring to increase degrees-of-freedom, i.e. removing hierarchies.

So whereas for Vitalik the distinction between a "DAO" and a "DO" is the former has complete A.I. automation over all decisions controlling the humans at the edges, i.e. like a master 1984 enslavement computer, I rather conceive that the "DAO" as destructuring (perhaps even automated) protocol which enables humans at the center to be autonomous. And the "DO" is many decentralized humans in the center, but they are bound together with less degrees-of-freedom in the structure enforced by the protocol that governs (i.e. by-laws for) their organization.

For example, my understanding of DASH's protocol for stakeholders is limited, but I assume it is based on a majority vote and there is no way to opt-out other than to sell your stake (unstake your masternode deposit), and thus the humans in the center controlling it are not really autonomous, thus DASH is a "DO" not a "DAO". And The DAO wasn't autonomous either and that was its critical flaw (other than the bug that enabled theft of funds) in that individual humans could not autonomously elect projects (and splitting had flawed game theory), so it couldn't be anything more than a power vacuum (slush fund) with spoils to whomever could win in the voting game theory. The DAO was worse than if the participants had invested in individual projects separately, thus the only purpose of the DAO was a game theory around controlling the pooled funds. No individual autonomy for the investors. The Ethereum and DAO developers appears to be so strongly into automation (and creating a master 1984 enslavement system? or is this just their Millennials Warcraft game A.I. culture?), that they built a DAO which was less autonomous than if each investor invested in projects separately from the DAO.

A Dash consultant Ira Miller wrote something similar but with different conclusions to mine:

https://medium.com/@gitguild/not-too-late-for-humans-to-save-ethereum-2f42f5fdfb75

Vitalik goes on to compare DAO to Dan Larimer's DAC, with the key difference being that profits are not retained in the latter. Retaining profits in the collective pool lowers autonomy, so actually DAO = DAC except when it is a non-profit. Vitalik seemed to think retaining profit (i.e. the organization is profitable) is non-profit if the profits aren't distributed back to the humans at the center. Whereas, I think the distinction is that retained profits indicates a "DO" because the stakeholders are no longer empowered to take their capital away except by selling the token which is not the same because liquidity of the float is not the same as distributing profit, i.e. 20% of the stakeholders can't sell their tokens at once to protest a vote of the majority. The DAO offered a split feature but the game theory was flawed.

I have more to write when I am not so delirious from lack of sleep. This is just a first draft to get some of my ideas written down. I'll need to expound on the differences between Ira Miller's perspective and mine.

I will expound on this soon:

Gotta love this, made my day

A DAO can't be about having the crowd manage every day-to-day event. That is what entities hire other entities to do as managers:

I just wrote about that:


But I see a very valid use case to raise money for and remove regulation from raising investment money for ventures. And giving decentralized oversight to investors replacing the function of a Board of Directors.

Note I had predicted yesterday this disaster:

The only valid use case for the DAO so far has been to steal shitloads of ETH

So after some more thought and discussions, I realized that Vitalik, Dan Larimer, and Tual have incorrectly conceptualized the conceptual structure and algorithm of a DAO and this is the reason that the DAO has insoluble design flaws and game theory flaws.

https://steemit.com/crypto-news/@dan/is-the-dao-going-to-be-doa
https://blog.slock.it/a-primer-to-the-decentralized-autonomous-organization-dao-69fb125bd3cd
https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-an-incomplete-terminology-guide/

Note Vitalik's conceptualization is actually not wrong, but too abstract and what The DAO codified is what I think is incorrect. I like Vitalik's chart except DAOs have humans in control ("in the center") but they are governed by protocol (which is probably what Vitalik means by "automation"):



(Lol, there is that Millennials culture again, "AI (holy grail)" as if replacing all humans is a good or even plausible goal. It is not even wrong.)

My ideas address all of Daniel Larimer's above linked criticisms of DAOs.

I am not yet ready to reveal specifically what I realized, but asap I will. The hint is that the problems derive around organizing a DAO as separate projects and the loss of individual investor control through pooling funds and voting. The concept of the DAO that remains in my idea is of individual investor control which is necessary to provide the legal structure which is arguably not an investment security (not depending on any other entity securing the expectation of gains) so as to avoid regulation of raising funds for new ventures and operating those ventures. Vitalik I think sort of captures my idea in his section Decentralized Autonomous Corporations about the difference between a DAO and DAC. I am thinking more of a DAC, yet still my idea is a DAO not a DAC.

I am now seeking out how I can implement this idea pronto.

Distributed Identity Project Wins $20k Hackathon Prize at Distributed: Trade Conference
Read more:
https://godistributed.com/articles/distributed-identity-project-wins-k-hackathon-prize-at-distributed-trade-conference/

I advise you to never enter something you don't understand. If smart contracts are confusing for you (and me too, don't see the use) then don't enter the game unless you are prpared to lose the amount you enter with.

Please explain the way this is accomplished, because what I see is that 10% new Vested STEEM tokens are created every year. How is that not debasement?

I think you are being fooled by the fact that they debase the common STEEM tokens 100% per annum, thus you think they Vested STEEM rises in value 9X more than the common STEEM. But the common STEEM is debased by 100% and 10% of that is for the Vested STEEM, so although the Vested STEEM rises in relative value, it also falls 10% in value relative to exchange value to fiat (that is not factoring in investment flows in and out).

Thus since you've missed the key math of the economic reality, I think that might be one reason you haven't been able to evaluate properly that this can't be a good investment. My math in my prior post to which replied showed that they need to debase by much more than 10% if they hope to fund a large quantity of social networking membership motivated by leeching money off the system.

Fundamentally I think paying people to participate in social networking is not very astute marketing. It will gain some interest now while payouts are high but as more people compete and payouts drop, then there really isn't any other compelling reason to use the service so far. The marketing plan so far is too one dimensional and doesn't appear to create synergies of use.


Oh I don't think they are any where close to having the correct formula or marketing. I am staying away, except I might try to extract some payouts for content as others are doing. A few quick $1000s is nice.

It is an unfortunate reality that their system appears to encourages users to leech off of it instead of building it up  because of some synergy.

Perhaps I can think of some suggestions of how to improve the plan for it.

Even if I do think of some good suggestions for them, I think the 2 year lockup for Vested STEEM just depresses their relative value. Of course a trading market for those will form, and the price will be discounted by the long duration lockup risk.

I am bookmarking this post and making sure I come back and read it frequently. So I continue to try to resist my inherent attributes (resist my age and solidified methodologies) which might cause me to "miss the train" on what the youth are up to.



In my opinion, everything I wrote above is valid (and that is not true of some other posts I've made recently because I am learning very fast right now about this phenomenon I described below). I am entitled to share my opinion. I am not attacking subjective ambiguous attributes such as his ethics (although I was perplexed as to whether they believe some of their unworkable fantasy designs). I am not berating anyone nor repeating over and over again trying to force it down your throat. You incite me to respond because of your attack with an implied assertion that I am only Homer Simpson and that I am nothing in comparison to Vitalik as Albert Einstein. The difference that you perceive has probably more to do with the difference that I describe below between an Xgen and a Zgen, in that I won't actually launch something until I am sure I have worked out the details and I am confident I have something that is workable. That doesn't necessarily mean my style of work is better.

I think Vitalik said it best himself where he has basically admitted he was (at least initially) playing this like a cartoon or game with a bimodal perspective on reality. The Millennials seem to have been raised to think life is like a game. Unlike when we were kids and there were no computers, no gadgets and we needed to go climb trees and play with insects, the youth starting about with Vitalik's generation (and I should know because I have a son his age who is addicted to gaming), grew up with a different idea of what reality is. Yeah I am old enough to be Vitalik's father.

So it is important to understand they will think of the world from much more virtual reality terms than actual reality.

I think that is a valid insight to share.

Vitalik is math smart. He also knows how to inspire the dreams about a utopian virtual reality. But when it comes down to producing scalable technology and common sense business objectives, it seems that is not his forte so far. He may improve on his weaknesses as he matures. And I may improve on emulating what he does best, as I learn from studying him, his generation, and the phenomenon they initiated (which is the purpose of this thread). I understand very well that the youth drive the future, and so I damn well better understand what they are up to. It is has been difficult for me to make the transition from my upbringing which is to have solid engineering and total design before embarking, to this new way of just having a nebulous idea and raising $millions without really knowing how the idea will end up being scaled and workable. I am realizing this has a lot to do with the generational difference in attitudes and upbringing. With games, you start playing and figure it out as you go along. For example, I noticed my son was much less interested in getting all the engineering of something worked out in his head like I do, and instead he was more interested in detailed discoveries while playing. He wanted the work to be part of the game, not something separated. You can see this in Vitalik's Ethereum blogs. He was working as part of the game. For him, the burnrate was okay because it was all part of the game of him being able to work with as many like-minded dreamers. Tual reiterated this recently when he stated that it is okay that even if The DAO fails, then it still would have been good for the crypto-currency ecosystem. For them, the ecosystem is the game.


I think that is a good result for all of us, for such insight, learning, and progress to be achieved.

Stop comparing yourself with Vitalik
Homer Simpson doesn't compare himself with Albert Einstein either.

https://steem.io/roadmap/launch-and-sale/#steem-allocation
https://steem.io/SteemWhitePaper.pdf#page=9

So Vested Steem are debased at ~10% a year to fund votes and posts.

Thus with a $36.5 million market cap, it could payout on average $1 per day to 10,000 users.

But obviously those who spend more time & effort on the site will earn more and the others will earn less. So let's say on average the typical user gets $0.25 cents per day in that scenario of 10,000 users and $36.5m mcap.

To be worthwhile to attract typical users, figure a minimum of $1 per day, so for a million typical users@ $1 per day we would need a $14.6 billion mcap.

That might just barely be realistic, but I actually think most mainstream users won't bother for $1 per day. At $3 per day, probably significant interest as it approaches $90 per month. But that would require a $44 billion mcap for just a million user base.

https://en.wikipedia.org/wiki/List_of_social_networking_websites
https://en.wikipedia.org/wiki/List_of_virtual_communities_with_more_than_100_million_active_users

I seems enticing users with a financial incentive is dubious. Users join a social network to accomplish something of their interest. To incentivize usership by debasing the investors and hoping it generates enough buzz that the market cap paces with usership growth, seems to be pie-in-the-sky hope. More than likely is that very little interest will be generated because the investors are not allowed to sell Vested Steem at-will. They forced into long lockup period on a very risky token and speculative venture.

I would add Proof of Existence as a valid usecase.

Especially when we are talking about contracts already, providing proof that they haven't been tampered with is a useful tool.

Proof of ownership might be a usecase also. A possible usecase could be licensing of copyrighted content.

In gaming and gambling, there are usecases as well, although I admit that they are not as "serious" as others, due to their nature (being games) and due to the fact, that most people simply won't care if decentralization improves a game on the backend. Those are games, after all.
BUT, in defense of games as a usecase: It is a "safe" enviroment to develop proofs of concepts without breaking anything important. It is likely, that some mechanisms applied to games work on "more important" usecases as well*.

And then, there is the idea of a decentralized supercomputer, but I am not sure how you get the participants to play by your rules. This looks like it could be exploited too easily by just submitting anything that looks remotely like it could fit the criteria. The Elastic guys are working on it, let's see what they come up with.
However, a variety of this idea I like is the idea of using this decentralized supercomputer for evolutionary programming. I think in this case, it would be possible to reward good finds somehow.



*there are currently some game ideas on Lisk:
https://forum.lisk.io/viewtopic.php?f=8&t=459
https://forum.lisk.io/viewtopic.php?f=8&t=483
https://docs.google.com/document/d/1ML_nI88q3c9N9oVJjyaLeBM4RoDA6LDtgxPskmTFgB8/edit?pref=2&pli=1

nice thread this one. i will be watching closely.

I disagree with the claim that Steemit will be decentralized.


So you have the largest investors in control of censorship of content, etc.. This is just Facebook by another name.

My concept for JAMBOX is that every user maintains his own rules about which content he wants to see and the reputation of the other users trusted in terms of rating content, i.e. that aspect of Synereo's model I think is valid (although I find other significant flaws in Synereo's design).

By what coin?

There is no legit decentral coin that tries to scale currently. Because it can't be done to infinity. You can only scale so much.

ETH is not a decentral token, so spare me that one.

Which other token will scale?

None of them. The coins with bigger blocks are broken. There is just an upper limit in traffic a decental network can handle. Just deal with it.

If you say you got a decentral token scaling to infinity you're certainly a scammer. 

You will learn before the end of this year that you are incorrect.

Your conceptualization of the parameters is based on Satoshi's design. Some of your assumptions don't apply in a different design. Do note I put "larger" in quotes so that is why your assumption about bandwidth is inapplicable.

Note I added some links to my prior post.