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>But this incident has set a precedent, at least within Ethereum, that the project leadership will intervene to enforce the spirit of a smart contract. It is t

>But this incident has set a precedent, at least within Ethereum, that the project leadership will intervene to enforce the spirit of a smart contract. It is the beginning of a precedent but precedent is fairly weak because Ethereum in its early stages and very experimental (many hard forks are in Ethereum future). Bitcoin rolled back the blockchain at one point as well but it wouldn't happen today. >So what now are the benefits of Ethereum smart contracts over the traditional legal system? My view is that smart contracts can most useful for low value contracts that you would never want to take to court. No judge wants to listen to two people arguing over 18 dollars.

infodroid 10y ago
Even if we agree that Ethereum is still in its early stages we have to ask whether this response is setting a good or bad precedent going forward. Will the project leadership offer a soft- and/or hard-fork every time a poorly-implemented smart contract is exploited in a manner that is not intended by the contract creators? If every smart contract is going to be "guaranteed" in this way, then this introduces significant overheads for the project and can also create moral hazard. Alternatively, if only some contracts are "guaranteed" but not others, this can introduce opportunities for favouritism or discrimination... Are cases only considered when they affect the ether price or where there is personal involvement with the contract? Is that fair? Interventions and their resolution can also quickly get politicized just like the bank bailouts from the financial crisis. It is not clear this is setting a good precedent. Edit: reworded for clarity
- semi-extrinsic 10y ago
  Not to mention: you can use the mere claim of yourself knowing a bug in a smart contract to force the other side to do as you say. If it's sufficiently hard to check for bugs, the other party might accept the cost of doing as you say as cheaper than the cost of checking for bugs again. This was a plot mechanism in some SciFi story I read a few years back. Edit: one of the in-universe early Revelation Space books.
  - deleted 10y ago
    [deleted]
- DennisP 10y ago
  In this particular case the contract holds 15% of all ether. The fork won't be enacted unless a majority of the community agrees to run its code. That's not likely to happen except in extreme cases, like this one.
  - infodroid 10y ago
    I don't think such a scenario is entirely neutral. Because it implies that some contracts will have a greater probability of being "bailed out" if they are backed by more ether. It may turn out to be a bad thing because it will establish the idea that not all Ethereum contracts are created equal. And this can lead the system to be more centralized.
  - riprowan 10y ago
    Exactly. This is being pitched as a negative, when really, consensus-based changes are probably always for the best.
  - arghnoname 10y ago
    In other words, this contract is too big to fail?
    - lazaroclapp 10y ago
      Perhaps, but: a) It is being bailed out by referendum, not mandate. Everyone gets a vote, if you don't want to install the patch, don't do it. b) The funds to bail it out are those stolen by the attacker. Nobody is asking people without DAO tokens to suddenly contribute their ether to restoring the DAO or take debt.
      - CoryG89 10y ago
        I disagree in part with (b). A hard fork could split the community and cause the price of ether to crash further. While miners who fork may not actually lose ether in the process, they may actively cause it to lose whatever value it has left. Of course, miners not associated with the DAO would never normally consider risking such a thing, but the rapidly falling price of their ether may convince them that it's the safest move.

infodroid 10y ago

Even if we agree that Ethereum is still in its early stages we have to ask whether this response is setting a good or bad precedent going forward. Will the project leadership offer a soft- and/or hard-fork every time a poorly-implemented smart contract is exploited in a manner that is not intended by the contract creators? If every smart contract is going to be "guaranteed" in this way, then this introduces significant overheads for the project and can also create moral hazard. Alternatively, if only some contracts are "guaranteed" but not others, this can introduce opportunities for favouritism or discrimination... Are cases only considered when they affect the ether price or where there is personal involvement with the contract? Is that fair? Interventions and their resolution can also quickly get politicized just like the bank bailouts from the financial crisis. It is not clear this is setting a good precedent. Edit: reworded for clarity

semi-extrinsic 10y ago
Not to mention: you can use the mere claim of yourself knowing a bug in a smart contract to force the other side to do as you say. If it's sufficiently hard to check for bugs, the other party might accept the cost of doing as you say as cheaper than the cost of checking for bugs again. This was a plot mechanism in some SciFi story I read a few years back. Edit: one of the in-universe early Revelation Space books.
- deleted 10y ago
  [deleted]
DennisP 10y ago
In this particular case the contract holds 15% of all ether. The fork won't be enacted unless a majority of the community agrees to run its code. That's not likely to happen except in extreme cases, like this one.
- infodroid 10y ago
  I don't think such a scenario is entirely neutral. Because it implies that some contracts will have a greater probability of being "bailed out" if they are backed by more ether. It may turn out to be a bad thing because it will establish the idea that not all Ethereum contracts are created equal. And this can lead the system to be more centralized.
- riprowan 10y ago
  Exactly. This is being pitched as a negative, when really, consensus-based changes are probably always for the best.
- arghnoname 10y ago
  In other words, this contract is too big to fail?
  - lazaroclapp 10y ago
    Perhaps, but: a) It is being bailed out by referendum, not mandate. Everyone gets a vote, if you don't want to install the patch, don't do it. b) The funds to bail it out are those stolen by the attacker. Nobody is asking people without DAO tokens to suddenly contribute their ether to restoring the DAO or take debt.
    - CoryG89 10y ago
      I disagree in part with (b). A hard fork could split the community and cause the price of ether to crash further. While miners who fork may not actually lose ether in the process, they may actively cause it to lose whatever value it has left. Of course, miners not associated with the DAO would never normally consider risking such a thing, but the rapidly falling price of their ether may convince them that it's the safest move.