DAOs Replace all people with smart contract. Organization running itself.

ex1) Ride service company Car decide when it needs a petroleum. Computer on blockchain decide which user is closest. No need human intervention. Even company fails the contract exists in blockchain so organization will run by iteslf.

ex2) Computational cloud service expand on its own. It can expand to another cloud.

DAO Attack 2016 On Ethereum create venture capital fund. DAO was statelss not belong to any other country. It was crowd funded by token sale. 1500억

There was error in code in smart contract. June 2016 500억. Hacker found flaw in code. DAO account to own account. Nobody could do anything. It was a valid transaction, contract is immutable.

Delemma: “Code is Law?”

  • We should not change what is immutable
  • We have to do hard fork of blockchain to change the rule. We will be able to change rules of the contract. (Hard fork is not always split but splitted this time) Due to hardfork ETH and ETC(this version hacker’s money stayed)

The problem was in DAO Code not Ethereum

Soft & Hard Fork (part1) Hard fork is new upgrade to blockchain software. Miners continued to mine old version which is Ethereum classic. ETC. They said changing a rule should not be accepted.2016 20 July

Soft fork. Segwit. Some thought segwit is only for investment not transaction. People said segwit is patch solution(temporary). Segwit is soft fork in 20July 2017.

Hard fork. Let’s increase to 8 MB. Most networks said we just want Segwit. People unhappy made 8MB. –> Bitcoin Cash. Bitcoin Cash is 8MB. 2017 August 2017 24 October. ASIC mining made people unhappy, so they wanted mining with GPU not ASIC. ASIC resistent, –> Bitcoin Gold.

Participants decide the future. They can split off to their own network.

HardFork - forking the software not blockchain. If you had 100 ether before, after hard fork you will have 100ETC and 100ETH. This is because history is shared.

(part2) Hard fork - loosen rules Soft fork - tighten rules

if mined block does not fit to original blockchain it does not continue. It is not backward compatible. As soon as something new is found in new blockchain it will not be accepted.

In soft fork all miners will upgrade soon. No split of the chain. Soft fork will only happen when majority agrees. Longer chain will be accepted so new rule will be accepted since majority use it.