Circle Execs: The DAO Proves Blockchains Require Trust

Circle founders Jeremy Allaire and Sean Neville weigh in on The DAO, the decentralized autonomous organization that was exploited this week.

AccessTimeIconJun 22, 2016 at 2:09 a.m. UTC
Updated Sep 11, 2021 at 12:20 p.m. UTC
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UPDATE (22nd June, 2016 17:45 GMT): Circle co-founder Sean Neville has now expanded on these thoughts in a Medium post.

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Circle co-founders Jeremy Allaire and Sean Neville are the latest high-profile blockchain entrepreneurs to weigh in on the ongoing crisis with The DAO, the ethereum-based distributed autonomous organization that saw millions in customer funds compromised last week.

In interview, Allaire and Neville called the ongoing event, which has found the development community taking action to protect remaining funds from losses, "fascinating", citing it as an example of how all blockchain technologies remain in the earlier stages of development.

Notably, Neville said that the situation provided an example of why he believes that blockchain tech, despite its strong emphasis on automating transactions and exchange, will still need to rely on the actions and abilities of people to succeed.

Neville told CoinDesk:

"Cryptography and software could replace the gatekeepers, but that doesn’t mean we don’t have trust in human beings at all. We have to trust how changes to the software and the apps are rolled out."

Both co-founders said they have been watching the situation closely and that they are excited about ethereum’s capabilities, though they cautioned the event proves the platform is in "production beta".

Allaire also commented on how ethereum smart contracts could come to force a larger transition in the legal world, one that he suggested would actually be advanced should investors in The DAO seek legal recourse for any losses.

“Is a smart contract a contract and will a court uphold it? If the court says the terms and conditions in the code are a contract, the code becomes the law," Allaire said. "That’s really significant and we’re going to see court cases that test those ideas."

One of the oldest and best-funded startups in the industry, Circle is a social payments app running on the bitcoin blockchain that has raised $76m to date, with funding from Goldman Sachs and Accel.

Image via Consensus


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