The DAO Disaster | My Personal Story

This could and will probably just come across as a rant, but I want to speak up,

There are people who loose money everyday, millions even.

There used to be people whining in the troll box, they could loose 90 bitcoins on a trade and survive (Like setting fire to an Aston Martin).

I think the amount of cash you have and what it means and enables you to do is relative to an individual's life circumstance and situation, but this was a lot to me :)

So let me begin !

For those of your that don't know what 'The DAO' was, it is a very novel concept one of which a company can operate free from a board of directors or the standard company structure we are used to, instead it is the idea that an organisation can operate entirely from code, where token / stake holders in the organisation hold voting power in proportion to the amount of stake that they hold, by using this power you can vote on proposals, contracts and even elect individuals or other real-world organisations to effectively operate a powerful company with real-world leverage and investment power.

Amazing right?, In principal I have no doubt this is the future and I am sure this is how the world will operate soon as it is a very fluid approach to the way we do things currently which will probably seem archaic in hindsight.

I have never invested in anything as I never had much money, but I know computers and I have a keen eye.

(Check me out)

I have been into cryptocurrency for years, I like to read and know about it as many others but when I read about The DAO specifically, I was sold, when that ICO kicked off, I started buying Bitcoin at about £400 each, I purchased Ethereum with it and I bought all of my DAO within the first three days of the ICO for maximum tokens at the cheapest price.

Ethereum is the parent currency for any token including the DAO and In case you aren't aware of how the Ethereum Wallet operates, see the screenshot below.

Tokens as well as the parent currency Ethereum are bound to an Ethereum wallet.
(Here is me in the process of moving a portion of those tokens over)

In total I had accumulated 29461.95347854 DAO over a period of time and had learned all there was to know about how to operate them once the service became useful.

This project was the most succesful crowdfund in the history of the internet. (operating word 'was')

As far as I could tell, I had doubled my portfolio just by being involved in an ICO, which was amazing, the plan was to stay up to date, stay in touch with the community and hold these tokens for as long as it would take for them to be valued well.

One week-day in June last year, I got out of the bath and sat at my computer, I was doing the rounds on poloniex, checking the price when all of a sudden this happened.

A hacker used a recursive piece of code in the DAO to withdraw $60 million dollars worth of Ethereum from the parent DAO in the space of 5 minutes, which is why it practically collapsed. At some of it lowest moments the panic was so great, many people were selling as fast as possible, including myself.

In the moment I realized that the currency had been compromised, it's being attacked and emptied at an astonishingly quick rate and so I sold up all my DAO as fast as possible to recovery as much of my bitcoin as possible (which wasn't much).

Fortunately for the DAO some weeks later, they hard-forked Ethereum (creating classic) and gave everybody a chance to redeem DAO at a 100:1 ratio as initially promised in effect bailing out the economy of which I hold no opinion.

I did not realize that any funding could or would be replenished or that it would be in my interest to retain those tokens in the event of a complete meltdown and collapse of a currency, each and every article at that time was laughing at all of us, how it was our fault, how we knew the risks and in some way probably deserved it for putting our trust in them.

I disagree with that, I think we have to take risks or else our lives would be very unproductive.

What eats me up is those tokens cost me about £1500 and had I have retained those tokens for just 12 months, they would have been worth £78,000 which would just about accelerate my life in every way right now, I have genuinely lost sleep over it. (Back to the grind I suppose!)

I hope you liked my story, it's my first post but I really wanted to share this, I suppose there is a moral to the story, somewhere!

If you enjoyed this, share this post! If you have any questions about it, bring them on and send me a message.

btc: 1AULY315WCCAmNfVWcfrzxhxoiSwNCoemi
eth: 0x00c5620ebe5ada76f88371d38fbfdfee74146ae4