Bid to Buy Constitution by a Blockchain-Backed Co-Op Loses to $43.2M Bid
KEY POINTS
- Thousands of cryptophiles quickly formed a group named ConstitutionDAO and raised $40 million in a week to try and buy an original draft of the U.S. Constitution.
- The crypto collective lost the Sotheby's auction last night to a phone bid from a private collector who bought the historical document for $43.2 million.
- A DAO is a blockchain-based structure where decisions are automated based on complex computer algorithms, removing human error, emotion, and corruption.
A group of 18,000 crypto investors chipped in to buy the document, using a blockchain-based construct called a decentralized autonomous organization (DAO) to come together.
In the 2004 blockbuster movie, National Treasure, the film's protagonist Benjamin Franklin Gates -- played by actor Nicholas Cage -- stole the U.S. Declaration of Independence to find an elusive treasure. In an ironic instance of life mimicking art, 17 years later a group of 18,000 cryptocurrency fans banded together under an elusive blockchain construct to buy an original draft of the U.S. Constitution -- only to have the artifact "stolen" out from under them by a winning bid of $43.2 million last night.
We the people decided to unify and buy the Constitution
What makes the real-life version fascinating is that the 18,000 strangers united around a single purpose -- to acquire one of only 13 original drafts of the Constitution -- using decentralized cryptocurrency technology to raise $40 million toward that goal in a week's time. The aforementioned investor collective called itself the ConstitutionDAO, which stands for decentralized autonomous organization (DAO).
Is a DAO a more perfect union?
A DAO -- rhymes with cow -- is built on a blockchain and all decisions are made through an automated system of complex computer algorithms to remove human error, emotion, and shifty shenanigans from decision making at a large scale. However, the automated DAO still requires oversight and monitoring. So its human participants would invest in the system to earn "governance tokens," which empower those vested members the right to contribute to the gestalt via crowdsourcing.
No one is in charge but all investors have a say
If ConstitutionDAO had won the auction, the thousands of contributors who chipped in crypto would not have bought a fractional share of the constitution, but rather the right to oversee how the asset is stored; where it might be displayed; how to make money from this asset; whether it would be sold at auction again; the types of buyers they might consider; presenting other proposals for consideration, and voting on those proposals. While no single individual would own the first edition of the Constitution -- the DAO would be the legal owner -- all DAO members would have a say.
It's a fascinating virtual arrangement that's paradoxal in its elusive existence and stunning ability to mobilize (and monetize) quickly toward a shared goal.
What's next for ConstitutionDAO?
Since the DAO lost the auction, the aggregated funds are assumedly still held by the ConstitutionDAO digital vault. It's not clear how or if those funds will be allocated back to the donors or whether the ConstitutionDAO will even continue to exist.
Our top crypto play isn't a token - Here’s why
We’ve found one company that’s positioned itself perfectly as a long-term picks-and-shovels solution for the broader crypto market — Bitcoin, Dogecoin, and all the others. In fact, you've probably used this company's technology in the past few days, even if you've never had an account or even heard of the company before. That's how prevalent it's become.
Sign up today for Stock Advisor and get access to our exclusive report where you can get the full scoop on this company and its upside as a long-term investment. Learn more and get started today with a special new member discount.
The only thing that's crystal clear, is if they had Nicholas Cage in the group, the outcome likely would have been much different.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
Related Articles
View All Articles