“[Projects like the DAO] are an inelegant and wholly unconvincing way to commit securities fraud, speaking kindly,” Preston Byrnes said at the Blockchain Conference in New York. He compared the DAO and other blockchain crowdsales to “cargo cults.”
Such cults revolve around the belief that ritualistic acts like building an airplane runway will bring desirable goods – oftentimes Western goods – to the area. In the crypto-understanding, it is perhaps the belief that promise of future web development based on amount invested into a project will create a crypto useful project…in the future, of course.
“If you want to create an organization or financial instrument or something else,” he says, “these are creatures which exist…because the court recognizes them. They’re fictions. If you say we are going to have a decentralized computer program which replicates those functions, it doesn’t work. It’s mocking it up, but it’s not the same thing. We agree some of these functions you could automate what a corporation does on a private blockchain and it would be profoundly useful. Does that mean you have a new form of corporate governance somehow exempt from law and can issue tokens and coins? Absolutely not. That’s hugely against the law.”
Byrnes is known in the blockchain space for his belief that private and public blockchains must co-exist. His firm, Eris Industries, believes blockchains can exist without Bitcoin. Eris believes bitcoin should be viewed as a shared software database, not as a payment processor. Eris believes that what the blockchain has done for payment processing can be done for any other organizational process. In perhaps a more controversial suggestion, the firm has also suggested no token whatsoever is needed for a blockchain system.
“We work on problems of network level business process automation,” CEO Casey Kuhlman told CCN.com.
“Traditional data and process management tooling has automated many internal business processes within industry. However, business processes which need to operate on a network level (i.e., outside of the context of a single enterprises’ data silos) benefit from being operated using a distributed application paradigm. Eris greatly reduces the friction required in building, testing, and operating such applications.” Eris views its partnership with Ledger as bringing a missing piece to their project: a hardened key management solution.