Editing DAO (section)

=== Pseudonymity ===
Pseudonymity means a member may participate with one or more fabricated<ref>Pseudonym technically means false identity, which has a negative connotation. It would be preferable to have a more neutral term meaning fabricated name, such as technonym, synthenym, artinomen, or fabrinomen, since the identities we are discussing are not necessarily inherently false. However, the term pseudonym is firmly established in the field.</ref> identities. An example is when you invent a fake username on an internet message board. It is preferable that a DAO allow members to join pseudonymously for three major reasons.

First, privacy is essential for protecting the individual. Since all transactions must be openly monitored by anyone in the decentralized network, every behavior in the DAO is recorded eternally and broadcast globally. In addition to the fear of social censure decades after any particular behavior, keeping a record of a citizen’s minute behaviors is a powerful tool which encourages governmental repression of its citizens at all levels. Pseudonymity is the closest one can achieve to anonymity on a transparent platform that remembers transactions and gives its members power and rewards.

Second, this protection of individuals’ privacy encourages more members to join. Again, the network effect gives larger groups more than a quadratic advantage in the many sub-dimensions of power, capital, and knowledge.

Finally, pseudonymity encourages a culture of forgiveness. Mistakes are inevitable. Forgiveness is essential to promote the network effect. Regardless of the intention behind the mistake, if it is possible to forgive members without eroding group cohesion, a culture supporting redemption should be promoted. Though it should be recognized that, unfortunately, pseudonymity makes apologies unnecessary, since they can simply quit and start fresh with a new identity. Conscious of this fact, a culture of redemption can still be encouraged if the DAO sets up protocols giving greater power to someone who has atoned for a mistake than to new members.

However, pseudonymity is a major security threat in an open DAO as it opens the group to sock puppet attacks, which we discuss below.