How Now DAO Cow and 1st look at Decentralisation

hey everyone this is Steve Good and welcome back to
The Coin Chat Yuri welcome back for another fun episode today thank you for
having me Steve as always it’s an absolute pleasure even
though I’m in the middle of a snowstorm oh and I’m having less more
nice weather actually rather pleasant over here as usual I’m sorry to hear
that then so today today’s interesting episode is called How Now Dao Cow and I
suspect people that don’t know the the the term How Now Brown Cow which is how
you teach children a language I thought I just mentioned that’s where the name
came from and we just played on words for this one it was I also thought you
brought it up because of your love love of tongue twisters well no because we
talked about elephants in the last episode so I thought we should stick to
animals and stick to cows and given that Turkey coins gonna inevitably come
up again I better throw in a cow before the turkey takes over that’s a good idea don’t be dismissive okay as usual you’re
someone who goes out and about and tries to spend Bitcoin how how did you fare
this week well I I got I got a single-word response oh yeah
my wife so it was my birthday last week so my wife wanted to take me and the
kids to just get away for a night just to chill a little bit and have a break
from all things crypto and banned our phones from us of course as you do and
so you know we were checking out on Sunday and she said can I pay with
Bitcoin and the lady looked over the counter and she said no and that was it she just and my wife
looked at her and she took out the card reader machine for my wife and
handed it to her like expecting a credit card and didn’t say another word on the
matter and my wife and I just looked at each other and complete its like jaw is there gonna be
a conversation on this one and the woman just ignored it and carried on just No
just No they’re very very Germanic of her mm-hmm and you I think you probably
tried something I did I tried actually last night at a bar in Cambridge and so
I was waiting for some friends and got there early and so I ordered a glass of
wine and then asked the bartender while she was writing up my bill if I could
pay in Bitcoin and she stared at me wide-eyed for a couple of seconds and
was like oh my god I just watched that episode of John Oliver’s last week
tonight about Bitcoin this is amazing it’s a great video by the way yeah
really good video yeah yeah he does a great job of explaining things and she’s
like I wish I could but I have no idea what any of that really means I was like
okay that’s cool because at least well we’ve encountered two people then that
basically just in various ways shut us down but at least they knew or seemed to
know what it was mm-hmm yeah straight out no suggested she knew something and yeah
you know mine was like an enthusiastic no so we got an enthusiastic and an
absolutely awful no all in the same week that’s great well that’s great it’s a
story what do these days we’re gonna get a yes and then we’re gonna have to go
out and buy some Bitcoin just so we can spend it exactly the day we get a yes, Yuri quick can you send some Bitcoin to me I’ve got to make a transaction over here no it’s gonna
take at least an hour to get to you because you know how it is on the
Bitcoin network right ask him if they take Ethereum instead now that’s our worst nightmares when
they say yes then we have to call each other and ask them to send some money to
the other one and takes an hour they’re standing there waiting and twiddling
their thumbs going like so are you actually going to pay us yes but this is
not the Lightning Network exactly I’ll be like trust me I sent it just trust me
on that one it’s coming look I can show you this really convoluted screen where
you can check the blockchain and see how it’s how it’s you know traversing the
world but you won’t understand anything on the screen because actually most
people don’t so but we’ll show you a screen that suggests something’s really
happening and what’s a confirmation doesn’t matter it’ll be here in about an
hour it’ll be fine I’m sure restaurant tears or anybody
trying to sell us things will love that phrase don’t worry
money’s on its way you’ll be fine just trust it we need to come up with a
slogan for that on one of these discussions turkey coin it’s on the way
it’s it’ll be fine it’s on the way so in other news I don’t know if you saw this
about Bank of America but I mean this is rather interesting but they’ve now you
know all the banks around the world they have to file various reports to the
their to their respective governments you know to the financial institutions
and bodies that they’re regulated by and Bank of America did something rather
interesting recently and they reported that cryptocurrency could represent a
substantial threat to their business and that’s what they put in their annual
filing that they’ve given to the Securities and Exchange Commission in
the US so yeah I guess that kind of suggests on the one hand they recognize
it’s a it’s a growing trend it’s something that’s not going away but on
the other hand they don’t have a strategy I mean at least they’re
watching it well I’m sure we could help them put together a strategy around
their crypto they just have to give us a call but yeah so that’s that’s kind of
interesting I really was surprised that Bank of America had done that this was
recent it was a I don’t know the exact date I think it
was like the toward the end of February I spotted it I just forgot to mention it
but you know that’s it’s relevant because it’s it’s interesting to see
that banks are starting to recognize it’s not just going away but it’s also a
threat to their business which is I suppose a positive reinforcement that
crypto is not going away it’s going to continue which is pretty cool means our
podcast will be around a bit longer exactly a few more months longer which
is great whoa come on it’s got to be more than a few more few years longer
now on the on the flip side moving over to Russia this was rather funny makes
you kind of wonder what’s going on over in Russia but the Ministry of Finance
went ahead and legalized cryptocurrency trading the Central Bank of Russia said
we disagree now yeah it’s good that they could talk like that and agree on things
that’s yeah well it’s it’s probably Putin telling one of them to approve it
and the other one to reject it so he can create a squabble internally mm-hm
I mean you know which side is Putin on on this one central bank or the finance
department Ministry of Finance probably ever side makes him richer well I think
both sides will make him richer but you know anyway so let’s keep an eye out on
Russia’s internal squabbles and their their battle to determine the future of
cryptocurrency for trading and usage which takes us to another part of the world
which is now Venezuela seem to just kind of be doing a world tour today yeah then
I’m gonna go right back to Asia after this one so you know the petro the
petro coin which was Venezuela’s attempt at having a coin that’s tied to
a barrel of oil and other things has been an absolute and total but it seemed
to be a flop so flop is a nice way to describe it yeah I mean I find it rather
interesting that they went out of their way to ban… first of all I feel
sorry for the I feel very sad for what’s happening in Venezuela because it’s it’s
a tough economic situation there and that people who were just trying to you
know get by and had a bit of money to do anything that started mining Bitcoin
were then basically told it’s illegal and getting shut down and thrown in jail
when there were no laws against it and then the country goes off and tries to
issue its own ICO mm-hmm but what’s what’s uh moving on to something more
let’s say positive was that inspired by Venezuelans Petro Cambodia may issue a
national cryptocurrency hey all right so I’m glad to see that the Petro has
inspired others to greatness definitely well I don’t know if this is related to
be inspired by that but Berkeley California is also going through the the
terms right now to issue their own cryptocurrency
for their their city because it’s it’s having some issues with tax cuts and
things so one of the councilmen decided that they wanted to create a plan to do a a
cryptocurrency for their municipal municipal bonds okay so I mean because
Berkeley is like famous for the Berkeley Bears right work there’s I don’t know
why you get that reference the University is that what is that the
mascot of Berkeley yeah so I was I was gonna say maybe they’re
gonna issue the bear coin so we’ve got competition now we do we do use the UC
Berkeley Bears I didn’t know that yeah that’d be great if they did Bear Coin I
like it I think it’s a great idea if you UC Berkeley are listening they should call it
the Bear Coin well I knew this various ways to spell it so you could have very
suggestive things going on with that you know poor bear well I mean going
back to your Bitcoin Sexy from Turkey coin I mean we may as well call it the
B A R E coin that’s true and then it’s Bitcoin Sexy versus the
Naked Coin and so so speaking also of weird ways to spell Bitcoin
Steven Seagal is back in the news because he has he
has joined a cryptocurrency and out of New Jersey and they were recently sent a
cease-and-desist by the bureau of securities the company is called be
beads coin so it’s bit it’s a Bitcoin
with two I’s so Queen the Queen to gem is what the
Queen’s with two I’s or two O’s no two I’s so it’s not something like Boot
Coin or something no no it’s not it’s bit cool Biitcoin, Bitqueen 2 Jen
number two oh it’s Bit and then CO and then two I’s and then an N (Bitcoiin) yeah
Bitco-iin or Bitqueen yes but they are that’s really Bit Queen or Bitcoin
okay well if they’re if they’re listening we’d love to know how you
actually pronounce so Steven Seagal was a brand ambassador apparently and that
okay that’s already a recipe yeah there’s this there’s the red flag that
refers back to a previous episode we talked about identifying ICO scams and I
think one of them that we talked about was Paris Hilton other famous people
backing crypto projects and how usually when you get a famous person who knows
nothing of the subject that’s being launched its suddenly an ambassador or
sponsor to the project that’s usually a an indicator of disaster so it was like
an omen it was and then it all went from superhero to omen now oh dear he just did a
big karate chop and knocked the thing to pieces
he did he did especially the state of New Jersey was like why are you involved
in this what are you doing yeah what’s the link between Steven Seagal and New
Jersey if you know the answer to that question please submit your answers on
the following piece of paper you can mail it to the following address best
answer wins ten Ether yeah ooh and lastly have you heard about the
cryptocurrency heater that was just been released so what does it do
heats up the coins it does well its it’s from a company called quarnot and what’s with you in these words we can’t spell today I know that’s part
of my goal even if we can’t I couldn’t pronounce them anyway Q U A R N O T
to quar to or quarnot, that is the question sorry Shakespeare it was very
inappropriate poor guy modernizing Shakespeare I think it’s
okay that’s right it’s modernized crypto Shakespeare by Steve good and Yuri
Cataldo you know volume 17 will be out seven thousand pages
no no but you could read it in a day cause its cyrpto oh yeah exactly we’re gonna make
that faster that way they have they basically put a Ether mine in a very
well designed heating box basically so you can you will be mining Ether and the
energy from that will radiate heat into your apartment and they also have a
another internal coil somewhere in there also so if you’re not getting enough
heat from your mining rig they the heater itself will kick on but it is
very beautifully designed for three thousand dollars and how do they keep
the mind cool they don’t go any details on that right so it’s great a generating
Heat but of course it if it doesn’t have good air circulation on the mine itself
then you end up with a overheated mine that collapses and crashes after so
that’s probably why they’re selling them for three thousand dollars with a
guarantee of six weeks till it and then you know no they didn’t say how long
they last for obviously no they did not but it’s it’s a very interesting looking
design after you really ought to do it episode on all of the ridiculous punt
products that have come out along the way just because because there’s just so
many ridiculous things people are trying to come up with that are you know I mean
I you know we talked about the previous episode or two I have my own mine
running here at home which is just to play around and understand how the stuff
works but it’s kicking off plenty of heat that I don’t need to put a box
around it well then how will you show it off to your friends when they come over
I say here come look at my cage and then they’re really confused where I’m going
with this conversation this is why you don’t have any friends that’s true I
know I keep inviting people to come to my cage well back at university you
invited them to you see your fish tank you know a pretty girl come and see my
fish tank and of course that was the line back you know back when to chose
how did dates my my age a little bit there but
now it is easy to invite the girl to come and check out your mine that’s true
I wonder if that actually works for some people
let it come and check out mine yeah come on check out mine yeah I’ll show you
mine a different tone of conversation now about yours versus mine yeah well mine is hotter
that’s all I know so you really want to talk about the DAO
today or should we just talk about yours will forever keep talking about mine and
yours so the DAO DAO is it DAO it’s
so is it a DAO, The DAO I know theres a few different versions of this so please there’s one
there’s one version and then there’s a coin that okay successfully failed
excellent right so the DAO itself actually is DAO Decentralized Autonomous
Organization it’s a term people use to refer to exactly that creating an
organization that’s self run without people being in it now I did a little
bit of research and it’s really interesting I came across this and I
don’t know if this is completely by coincidence or people were just playing
with letters and said let’s come up with something creative but you know that in
Chinese you have Taoism or Daoism which is one of like the religious or
philosophical traditions that emphasizes living in harmony and working together
and that’s what Daoism is spelled sometimes with a D and sometimes with
the T and interestingly when one acts in a manner out of sync with the natural
rhythm that’s going on within the philosophy or the religion they will
typically disrupt harmony and create unintended consequences so I guess you
know where I’m going with this conversation
I do yeah so so the DAO so that so we’ll just leave that out we’ll Park that idea
about unintended consequences but so a DAO is basically
it’s run by a set of rules that run on smart contracts and the whole idea is
you can create a smart contract that will basically govern the process and
then and store the actual exchanges taking place so you have no physical
offices there’s no formal management structure there’s no regulation as such
because there’s no company there’s no officers there’s no directors
the smart contract itself will hold the voting dates times and deadlines and
enforce all of it and what happens is people can create their own proposals
within a DAO to allow people to vote and the smart contract will
effectively execute based upon the voting in which way it goes so depending
on how people voted if there’s enough consensus it goes one way or another and
you can define the percentages that will you know of consensus that are required
for a vote to pass and everyone has voting rights so the decision gets made
on on whether you pass consensus or whether there’s enough votes to pass the
particular bill I suppose if it were like a government hmm is that also then
like if how it funds itself to uh no no I mean it doesn’t fund itself
this would be more of let’s just say that there was an initiative to to
spend some money invest in some money and something and one person put a
proposal in to spend that money okay then everyone would have a right to
choose whether they want that money invested or used to fund a project and
then of course someone else might put a proposal in you know two years later
that said well that’s project has been running it’s time to take some profits
on this I put a proposal in that says we should kill this thing now and if they
were to sell it they would make money so in fact that’s the The DAO not DAO but
The DAO which was a coin that launched back in not long ago but 2016 was
actually designed around that principle of being a fund to you know use the
money for businesses and enterprises to help them like a venture capital project
of some sort and so this is kind of you know it’s kind of a sad story actually
because the DAO raised a $150M dollars worth of Ethereum it was a coin that was on the Ethereum network
so Ethereum was the smart contract platform they created the DAO coin and
the goal was to you know use the funds to help fund businesses and to develop
them much like I said about DAO as a principal it was a stateless
organization so it wasn’t domiciled anywhere had no obvious regulations from
governments which of course also sometimes has problems because you know
if something goes wrong and there’s no one there to state what’s right or wrong
then you know that can have issues sometimes but that’s how they set it up
and they did a crowdfunding in May of 2016
they had 11,000 investors which is you know pretty decent amount and the
interesting thing was that The DAO had attracted 14 percent of all of the Ether
globally at the time in terms of how much Ethere had been mined 14% of all of
the global ether was sitting in the DAO and there was nobody that had more than
4% of the total funds so it was a very very nicely distributed group of
investors all putting money into this project but then some bad you know
something bad struck and it’s the thing I mentioned earlier about you have
rhythm and then something disrupts harmony and creates unintended
consequences and what happened was that there was a vulnerability that was
identified in the DAO smart contract set up and you know nowadays when people
do smart contracts they normally get everything audited before they put it
out there but I guess either they didn’t audit it or they just didn’t audit it very well so you know there’s not a lot of detail
published about the exacts at least if there is it’s too technical for me to
get to all the detail of understanding what was wrong with it but something was
wrong with it having to do with a recursive command and the community had
identified it and published publicly that this thing was a problem and so
various people in the community started to fix it but within a month by June of 2016 someone had decided to take it upon
themselves to take advantage of that vulnerability and hack the DAO
and steal 50 million dollars worth of Ethereum or a third of all of the
investments now the good news is that because of the fact that there was a
smart contract in place and money could not physically move out of the system
it was held a queue for 28 days so that the money didn’t actually move out but
was sitting there waiting to go so the smart contract held the money in the
system but now the question was what do we do because the whole point of having
the DAO was it’s a self-regulated self-running environment but now we’ve
got someone who’s hacked it and is stealing so there were kind of you know
a range of opinions one was it’s a valid transaction albeit unethical we have to
let it go through there’s nothing we can do about it we just have to fix for the future the other was recall the Ether funds
because it was a hack it should never have been done in the first place and
then the there were even people calling to shut down the DAO entirely and so
what ended up happening and we talked about this I think it was two episodes
ago where we talked about the what is a fork yeah well what fork is a fork
so so in fact what ended up happening was that the Ethereum community acted in
July of 2016 so right before the smart contract had run through and they had
enough consensus across the community that they decided to roll back nearly
all the previous transactions that were held in that smart contract to prevent
the loss of you know 50 million dollars worth of Ether and of course that led to
a lot of disagreements and a lot of uncertainty and a lot of unhappiness
about what the whole point of having a consensus driven model is when
suddenly someone’s interfering with our with our project and you know rolling
stuff back but on the other hand they it wasn’t gonna to go very well for
much longer anyway because The DAO as a result of all this got subsequently
delisted on all the exchanges so and here’s an interesting little side bit
that a lot of people probably don’t know this but the actual old fork that was
the original Fork of Ether the result of you know
we talked about you know when you do a fork it’s literally changing the code so
because Ethereum had to change the code in order to roll back all these
transactions on behalf of all the users that were suffering to prevent them from
losing their money they ended up forking their own coin and that was the only
fork that ever took place and that is what caused Ethereum Classic to be
created okay so it was the actual you know disruptive
nature of somebody disrupting harmony and not being a good Daoist who forced
the Ethereum community to fork the coin and that fork was what led us with the
current Ethereum which is the forked version and the original version which
was actually actually the Ethereum Classic so needless to say in July of 2017 the SEC
also then ruled that the DAO tokens were securities and so it was possibly in
violation of US security laws so it’s probably a good thing that they all got
they all got exchange delisted and it all disappeared because they were
probably gonna get in trouble sooner or later anyway yeah but you know there are
a few other doubt projects out there like Dash and DigixDao how should
say DigixDAO well that’s it yeah easy to say that which are probably
the most well known where there’s still a consensus driven model where people
have to vote to make decisions on how the project runs but yeah that’s the DAO
story that’s a very interesting DAO story I had no idea on that one How Now Brown DAO no
How Now DAO Cow and that’s my story and I’m sticking to it
but I thought it was a really interesting topic to tell people about
because um you know you hear the term DAO quite a lot and and a lot of
people just don’t know what it actually is so I thought it was just kind of good
to you know explain to people the history of it and what it’s meant to be
but really its whole principle is about being able to run a self running
autonomous organization where people can put proposals in and can vote on those
proposals to run the organization without anybody in particular doing anything and that’s essentially what the concept of a DAO is Decentralized Autonomous Organization
I’m curious on the like the long-term effects of something like this
so you know you mentioned there’s already a couple other projects out
there that have a similar set up I’m curious to see how they are able to
run long term versus a couple thing else versus other projects as a model of how
things could work in the future yeah I mean the it it’s really hard to say I
mean you know you look at big corporations and how long it takes big
corporations to make decisions sometimes because everything’s always about you
know it’s interesting a lot of big corporates and you know I’ve come from
the big corporate world for far too many years and you know decision making never
took place from one guy or one girl one woman I should say it was always it was
always like you go to your boss and your boss has to go to someone else and then
they have to kind of get consensus and or would be called agreement you know
you’ve got to get some buy-in amongst a bunch of people to do something I mean
that’s not really any different from what we’re talking about here but
corporate buy-in and just takes months or weeks or sometimes longer to get
everyone to come around to understanding your perspective and somehow this just
seems like it could be a more efficient you know way of working albeit maybe
there’s a hybrid model involved here somewhere that were maybe we’re onto
something that we need some leadership and some vision as to where a project
goes because it’s always good to have you know some sort of direction for some
things but maybe for some projects we could completely run with autonomy and
other ones we could run with you know some level of leadership and direction
and vision and where decision and approval making processes have to go on
they could be done through a consensus model or a voting bottle or a proposal
and and voting model that moves things along a lot faster and of course the
danger in doing that would be you give people too much autonomy and they’ll
just make really dumb decisions or really dumb proposals like let’s spend
all the money and have a party yay or more inappropriate things like having
a bear coin right or just buying a bunch of random stuff like we’ll use all the
money and we’ll buy ourselves a yacht Lambos yeah with Bitcoin with Bitcoin on
them yeah so yeah I mean I suppose if you really hated the company you worked
for and it was a somewhat autonomous organization you could pretty much just
say if they’re really such a bad company we’re just gonna vote to spend all the
money in the company yeah so I can’t imagine you’d have a DAO that’s a publicly
traded company because that would probably be somewhat asynchronous mm-hmm
so yeah it’s an interesting topic I mean I think it’s an interesting I really
don’t know where it goes in terms of is it going to be the future but I do see a
lot of projects out there that are talking about you know having DAO based
principles but they all have a CEO and they have a COO and they have a head
of Finance and they’re still small you know startup ICOs that have a
management structure and talk about having a DAO and and that doesn’t make any sense so so you know I would challenge the ICOs
out there that are doing that to try to you know make themselves clearly
DAO if they really want to be down and make sure it’s clear that the group
consensus around the direction of the project is X but we’re going to open
this up to a wider audience of people to put proposals in about the future
direction of the project once the coins are out there so sure that’s that’s a
possible direction and an outcome projects could take and this is this is I mean and
it’s a really interesting topic because it is so forward thinking and so
innovative and so disruptive that who knows where this takes us in the future I mean it might be something of the
future and it might be something that just comes and goes that didn’t really
work and it was experimental but I think it’s an it’s certainly an interesting
area to track and see and just see where we end up
definitely so yeah that’s that’s really all I had to say on the on the DAO topic
today I mean anything else you wanted to talk about turkey coin or other I mean I
always like talking about turkey coin but I we have some developments that
we’re working on right now and I want to save those for another time okay how’s
your tweet your tweeting going on I mean not that turkey’s tweet but you know
maybe we need to have a new thing called you know so we can have
turkeys that are gobbling rather than tweeting but my tweeting isn’t going as
well I have started following a bunch of companies and kind of chatting at
them a little bit but we’ll see how that goes but so I’ve got a I’ve got a great
idea for Yuri and I’m sure our listeners will just love this one or not but you know
Facebook has been very aggressive about trying to reduce advertising on
its pages around ICOs and related topics there have been some rumors swirling
around about what Twitter might do but if you can’t tweet then maybe we
definitely need to launch a gobble if you can’t tweet you can always gobble
and we’ll never stop you from gobbling I have no response to that well I mean you
know if you can’t tweet you got to do something so what are we gonna do we’re
gonna gobble we got to give people an alternative so have you gobbled that
today I haven’t but I’m gonna have to gobble it today yeah Share Like Subscribe
and Gobble I’m just sitting here holding back laughter because I really don’t
know how I’d come up with this weird wackiness it’s one of those fun days yeah it’s called I didn’t get a lot of
sleep last night because my little one’s got a fever and kept both of us up all night so that’s life you know he’s sick he’ll get
better but yeah lack of sleep does great things for the brain and makes you go a
bit psychedelic and come up with really strange and ridiculous things to talk about it adds a little spice to our
conversation which I always appreciate absolutely and if anybody didn’t realize
it was two episodes ago when we talked about what the fork is a fork
that in that episode at the end of the outro Yuri had a little special clip so
if you haven’t heard that clip to all of our listeners go and have a listen again
just to the very end is a little funny out outro that’s not outro, outtake
that’s on there which was to my surprise rather amusing and funny because I
didn’t realize he had still kept recording and I shared some funny
stories and he left them in thank you Yuri for that you’re welcome I like to
hide some some Easter eggs and some gems at the very end so you have to listen to
after the outro to here the Easter Eggs another good idea that we may have to
drop some Easter eggs into one of our future episodes seeing that Easter is
not too far around the corner and we’ve got to have something for our listeners
to gobble up yep didn’t get you on that one oh well that’s it I had to try
what’s a bad papa humour there you go you know daddy humour have you
had enough of me today I’m good but I think our listeners may I’m sorry listeners I know it’s been a bit of a
silly punchy day but you know we have to try to keep these things light and fun
and sometimes it just takes us down the path that’s least resistance and there
was no resistance down this one so he just kept on going but so for future
episodes I did meet a very fascinating person who works in the AI space and so
I’ve been chatting with him about interviewing him for a future episode so we’ll start pulling in some some
smart data scientists and others to talk about what’s possible and what’s coming
around the corner who have both first-hand experience working in these
in these different areas that’s very cool yeah that’s great well
bring him in haul him in sounds good well thank you everyone for listening
today it’s been a lot of fun a lot of unusual discussions or not so unusual
discussions to the moon until next week

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