DAO: What It Is And What You Need To Know About It

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Almost ten years ago, a new technology was released to the general public that did not only provide businesses with a new way of transacting with their customers, but also gave the average person a new way to invest their money, as well as transact on the internet. We are talking about Bitcoin, of course. Bitcoin made sending money from the United States to someone living in Japan or even a very small country possible – and completely cut out the middleman, as well as all those expensive costs involved with traditional international bank transfers. The blockchain technology that was also developed with Bitcoin were released as open-source code, and soon became an interested subject amongst developers.

Fast-forward time a little, and we see this technology being taken from a simple tool to keep a record of transactions that cannot be tampered with to an entirely new way of running a business, storing information, obtaining user input and more. Ethereum truly changed how the world saw blockchain technology, and made this technology into something that can now be utilized for more than just sending money to someone or buying for a service on the internet. Amongst the many advancements in blockchain technology that was made in recent years is a term known as DAO, or Decentralized Autonomous Organization. Let’s take a look at what this term means and how it is useful.

What Is A DAO?

daoDAO is a term that stands for Decentralized Autonomous Organization. The name is quite self-explanatory, as it literally means an organization that is decentralized, as well as autonomous. In simpler terms, a DAO refers to an organization, ideally on the internet, that runs in a decentralized environment (which means there is no single location where the business exists, and no need for the business to be physical at all) and the business is completely automatic. Once the programming part of the business has been completed, there would be no need for future interference from any parties, such as management staff or a CEO, to provide input into the organization for it to work effectively.

This all may still seem somewhat unreal and something that you would see in a futuristic movie, but Ethereum, blockchain technology and all of the most recent advancements in these technologies have certainly made it possible. DAOs is still very new; thus it is obvious that a lot of people have not yet heard of this technology or know how it works. Learning more about DAOs, however, can be beneficial since this technology offers some excellent opportunities for individuals who wish to become investors with a voice.

When a DAO launches, investors can usually buy tokens. These tokens represent their investment and part in the organization, and also allows them to become part of the decision-making team that has an effect on the particular decisions that has to be made to keep the organization running and to ensures the organization is profitable. As an investor of a DAO, the average individual has a say over many operations in the business, such as expenditures that can be made, products and services that can be introduced by the organization, whether employees can be hired, and more. The best thing is that these decisions are processed in real time, and once enough votes have been received, they can be made automatically.


Ethereum completely revolutionized blockchain technology, and made it possible for the average person with programming skills to create applications and scripts that are able to run smart contracts. Today, we see the idea of a business entity in the form of a DAO become a reality; thus allowing for average people to make saver investments, and be heard as an investor when it comes to important decisions being made. Here, we explained what a DAO is and how it will help to revolutionize the business and investment world.


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Kevin Lee is a former tech advisor who cut his teeth in Silicon Valley. He now spends his time sharing his passion for investing in diamonds and jewelry. You can reach Kevin for any comments by using the contact form on this site. Don't forget to sign up for his free "Investing 101 Guide" by clicking on the button at the top right of this website.