An Historic Day: Ethereum, The DAO, and Berkshire Hathaway Webcast

I’m sitting in my home office this morning, at my desktop computer, and on my right monitor I’m watching the first webcast in history of the Berkshire Hathaway Annual Shareholder Meeting. On my left monitor, I’ve got a full Ethereum node and Mist wallet running as The DAO crowdsale is currently plowing through it’s first day in the wild having already raised the equivalent of over $2.8 million dollars in its first few hours after launch.

I can’t help but think about the interesting similarities and differences between these two models of running a business and what they mean for how the world is changing — Berkshire, one of the largest business conglomerates in the history of man, and The DAO, a Distributed Autonomous Organization, a revolutionary business model that is a paradigm shift in how a collective group of accounts can cooperate democratically without trust by running on the Ethereum world computer.

The Similarities

Berkshire and The DAO are similar in many ways. They are both:

• Organizations with rules that govern thier operation, voting, input and output of revenue
• Have shareholders
• Are worth millions of dollars (and in the case of The DAO maybe even billions one day like Berksire)
• Have leaders or curators to ensure the principals of the organization are followed
• Invest in people and ideas in order to generate a profit
• And many other activities and goals you’d expect a for profit organization to exhibit

The Differences

However, there are many differences between these two organizations, and while I believe there’s a place in the world for both of them, over time it will be interesting to see where people vote with their dollars, ether, bitcoin, etc. Some of the differences between these two organizations are:

• The DAO is by definition: distributed and autonomous — it doesn’t live on the New York Stock Exchange, it isn’t registered with the SEC, it isn’t controlled by any one person, board, or government
• Berkshire is worth BILLIONS (approximately a market cap of 360 Billion today)
• The DAO has no concept of the U.S Dollar — it’s value today is almost entirely made up of Ether, a crypto currency and fuel for running smart contracts on the Ethereum network, and maybe a bit of goodwill and promise, too
• Berkshire has a long history of making winning bets, beating the S&P 500’s returns, and generating a significant return to shareholders
• The DAO has tokens and token holders that are will be used to submit and vote on proposals in a purely democratic fashion, but is still in its early phases and still unproven
• Berkshire has shareholders that have particular rights and classes depending on the rules of the company, SEC, and laws of governments
• The DAO has an immutable smart contract at its heart that is guaranteed to never change due to the architecture of Ethereum and the rules of mathematics, which also provides mechanisms for changes and oversight by token holders

April 30, 2016 — An Exciting Day in History

The lists above are by no means exhaustive, but today is an historic day: Berkshire Hathaway, one of the largest, oldest, and traditional organizations of people and capital has done its first webcast. And, The DAO, a totally new type of distributed autonomous organization has started a paradigm shift in how resources and people can work together without trust to build new things.

I don’t know how long it will take to feel and experience the impact of the today’s events, but I’m certain today is an important nexus that connects the traditional past to an amazing future.