Circle CEO: The DAO incident proves that blockchain still needs human trust

Rage Review : Circle co-founders Jeremy Allaire and Sean Neville participated in the discussion of the ongoing crisis of The DAO. They believe that this incident is a good example that all blockchain technologies are still in their infancy. Blockchain technology (even if it has achieved great automation of transactions and exchanges) still needs to rely on human intervention to succeed. The development community has begun to take action to protect users' remaining funds from being stolen. The DAO investors can seek legal assistance for their losses. If the court recognizes the legality of the smart contract, then the code will have legal effect and can well protect the security of the smart contract.

Translation: Nicole

Circle co-founders Jeremy Allaire and Sean Neville are among the most notable blockchain entrepreneurs to weigh in on the ongoing crisis surrounding The DAO, the Ethereum-based distributed autonomous organization that was defrauded of tens of millions of dollars in user funds last week.

In an interview, Allaire and Neville called the incident “excellent” and said the development community had already taken steps to protect users’ remaining funds from being stolen, and they saw the incident as a good example of how all blockchain technology is still in its infancy.

Notably, Neville said he believes the incident is a prime example of how blockchain technology — even if it automates transactions and exchanges — still relies on human intervention to succeed.

Sean Neville

Neville told CoinDesk:

“Encryption and software can replace controllers, but that doesn’t mean we don’t have to trust humans at all. We have to trust the software and the applications that make the difference.”

Both co-founders said they have been watching the situation closely and are excited about the potential of ethereum, but they warned that the incident proves that the platform is still in “production testing.”

Allaire also commented that Ethereum smart contracts will force a greater shift in the legal world, and he offered a suggestion: The DAO investors could seek legal assistance for their losses.

Jeremy Allaire

Allaire said:

“Are smart contracts contracts? Will courts recognize smart contracts? If courts say the terms and conditions in the code are contracts, then the code becomes law. This is very important, and we will see lawsuits testing these ideas.”

Circle, the industry's oldest and best-funded startup, has a social payments app that runs on the bitcoin blockchain and has raised $76 million in funding from Goldman Sachs Group Inc. and Accel.