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I last saw this story when the fork looked like it was going to succeed. Did enough people really dig in their heels for the immutable chain that they're going

I last saw this story when the fork looked like it was going to succeed. Did enough people really dig in their heels for the immutable chain that they're going to let the guy get away with robbery? Oh man. Ah, hardcore libertarians. You're all completely mad, but I won't deny you're consistent.

api 10y ago
The issue is more complex than that. The DAO was created and backed by people who are also Ethereum developers, and forking the entire block chain to save what many people consider to be a badly thought out and badly executed experiment is just as dubious as some of the things that were done to save mega-banks in 2008. It's a clear case of moral hazard among other issues. Many of the people who are backing Ethereum Classic (the non-fork) are doing so because they like the ideas of Ethereum but want it to be truly independent. If the fork succeeds many people take it as a sign that Ethereum is a "proprietary" coin rather than a more open "nobody owns it" system like Bitcoin. I have no dog in the fight but that's how I understand it.
- Analemma_ 10y ago
  > as dubious as some of the things that were done to save mega-banks in 2008. That's a good analogy, but not for the reason you're thinking. The expert consensus on the 2008 bank bailouts is that they had to be done, because letting them fail would've turned the recession into another Great Depression, and that much harder to recover from. Does that mean bailouts are good and proper? No, bailouts are terrible. It means the right way to avoid the moral hazard would have been to better regulate the banks and never have let them get "too big to fail" in the first place. I feel the same way about Ethereum. The DAO hack was a no-win situation, because these "smart contracts" should never have been created to begin with. They're always going to end up in situations like this, because they involve the affairs of messy, imperfect humans. The correct answer to the DAO mess was never to get into it in the first place.
  - grandalf 10y ago
    > The correct answer to the DAO mess was never to get into it in the first place. I don't think this is true at all. The DAO is (and was) a very cool idea. The only problem was that the code was complex enough that those who casually reviewed it failed to notice the vulnerability that the attacker noticed. As for the financial crisis, it was a combination of an unexpected event and entrenched interests scrambling to benefit as much as possible from it. By definition, entrenched interests want a continuation of the status quo, and that is what happened. We think about how bad it would have been if some homeowners would have foreclosed, but we fail to think about the people who would have been able to afford a home at a great price.
    - jessaustin 10y ago
      We also fail to imagine the future crises that were made inevitable by the bailouts. If we wanted bankers to learn, we shouldn't have shielded them from the consequences of their poor decisions.
  - EdHominem 10y ago
    > The expert consensus on the 2008 bank bailouts is that they had to be done Of a carefully curated set of worse choices, such as "A: Sit back and watch the banks keep going.", sure. There are a ton of ways the bailout could have been done that don't involve giving money to the same people who screwed up before. For instance, let those banks fail but insure the individual depositors (trickle-down to insuring individual holders of MBS-backed retirement funds, etc.) and recapitalize a new set of banks. > because letting them fail would've turned the recession into another Great Depression Yes, letting all banks fail would. But there's no need to throw the baby out with the bath water. > It means the right way to avoid the moral hazard would have been to better regulate the banks and never have let them get "too big to fail" in the first place. Yes, we should try to regulate, but there'll always be new loopholes so we need to stop rewarding the bad actors when, not if, they find a new scam. > [Smart contract]. They're always going to end up in situations like this, because they involve the affairs of messy, imperfect humans. And yet your solution is to add another layer of humans? > The correct answer to the DAO mess was never to get into it in the first place. Like buying Enron. But not all companies are scams and not all smart-contracts will be ineptly written.
- joosters 10y ago
  I think there is still a lot of dirt that has yet to be dug up regarding the creation of the DAO. For a decentralised system, it certainly had lots of websites quickly set up to promote itself, the ownership of them seemed (I think?) to lead back to the company Slock.it. The DAO was apparently also promoted on Facebook via paid adverts, yet no-one will admit to funding those. Meanwhile, slock.it were angling themselves to be the main recipients of DAO funds. Luckily, the stupid thing broke before they got their hands on the money.
valkea 10y ago
As well as a few digging their heels in, they have been joined by a lot of bitcoiners. Once the hacker or whitehats start selling, this could end up being a pretty significant transfer of wealth from BTC to ETH
- jessaustin 10y ago
  It's difficult to imagine why this episode would improve ETH's prospects as a store of value, so what could this statement possibly mean?
  - pYQAJ6Zm 10y ago
    I suppose it was a typo, and the parent meant exchanging BTC for ETC.
  - valkea 10y ago
    BTC holders have been buying into ETC, while a lot of people who are long on ETH have been selling their ETC and plowing that back into ETH. Once the DAO hacker or whitehats start selling the price of ETC is likely to fall off a cliff. Should bring the fork episode to a conclusion. Both of these factors improve ETH's prospects in the short term.
empath75 10y ago
If the code is the contract as they said, then what the guy did couldn't be robbery. If anything, the people who did the hard fork stole his rightfully earned ethereum.
crispyambulance 10y ago
There is a weird belief-system in the ethereum/DAO chatter that I can't quite place my finger on. Not even sure if "libertarian" covers it. I've heard it said that these folks are a form social-darwinists who have decreed (in their sandbox) that "code is law" and that, as such, any and all manipulation of the working code is perfectly acceptable without regard to external factors such as ethics, intent, and reasonable behavioral mores. Its like they've taken the WORST aspects of the real financial systems such as money begetting money, rampant speculation, intractably complex and arbitrary rules, etc and jacked it up to the Nth degree for their monopoly-money world and are now taking it dead seriously (and getting offended when people suggest that their "coins" aren't _really_ worth what they think they're worth-- because, yep, conversion to REAL money is a problem for them). I like the concept of a crypto currency as a way to exchange goods, services (and possibly contracts), but the players thus far leave me completely turned off.
- grandalf 10y ago
  I think you are missing the point. If the code isn't the law, then what is? The beauty of a "code is law" system is that its behavior is not subject to human interpretation and human biases... we can run a simulation on a test instance of the VM to test whatever scenario we choose, and we may review code and decide whether or not to trust it. Systems like this are inherently adversarial. The idea of a "code is law" sort of system is that code could be developed to deal with the myriad adversarial situations in far more efficient and predictable ways than the way humans have historically dealt with them. Legal uncertainty is a transaction cost and an existential risk in all contracts. In order for Ethereum to avoid this added cost, it would reduce the unpredictability of a contract's outcome. If a hard fork might happen to nullify a transaction, then anyone who is expecting to depend on it must add some uncertainty to his/her portfolio. There there would still be risk of code bugs in a code-is-law system, but over time contract code would be discovered to be trustworthy in the same way that apache's source code is considered largely to be devoid of major security holes.
  - dragonwriter 10y ago
    > If the code isn't the law, then what is? The law is the law. And, when effective steps have been taken to prevent real remedies under the law, then, in practice, the war of all against all is the law.
grandalf 10y ago
> Ah, hardcore libertarians. You're all completely mad, but I won't deny you're consistent. The key point is that while laws may be minimally, moderately, or highly flawed, the rule of law is the idea that we should have a proper way of changing them to prevent future events, not just decree one person an evil hacker and a group of other people victims. The hard fork is like if a no parking sign was installed on a street and tickets were issued to everyone who had parked there the previous year, before the sign was in place. Putting up the sign is not a problem, nor is enforcing the rule post-sign, the problem is making a decree that impacts what happened in the past. A ban on ex post facto law is such a core concept in Western civilization that it's pretty shocking anyone would actually think such a rule is a good idea. I suppose one thing that is a universal among humans is the strong desire to form corrupt groups to extract wealth from human systems.
- mthoms 10y ago
  >A ban on ex post facto law is such a core concept in Western civilization that it's pretty shocking anyone would actually think such a rule is a good idea. Not really a fair comment IMHO. Western Civilizations also have the core concept that intent matters and that not every potential conflict/problem can be foreseen. Thus, you have vaguely worded laws that are subject to human interpretation (courts). I understand that ETH billed itself as being above all that. So I can see why some are justifiably upset. I just think your comment about ex post facto law is a little misleading given that there is, in fact, a great deal of wiggle room afforded to the courts in the West.
  - grandalf 10y ago
    Fair point. While I think smart contracts are somewhat modeled after Western courts, the beauty of them is that they are predictable and deterministic. Doing various sorts of forks is quite messy, so perhaps the ideal smart contract system would have another layer between VM and forking.

api 10y ago

The issue is more complex than that. The DAO was created and backed by people who are also Ethereum developers, and forking the entire block chain to save what many people consider to be a badly thought out and badly executed experiment is just as dubious as some of the things that were done to save mega-banks in 2008. It's a clear case of moral hazard among other issues. Many of the people who are backing Ethereum Classic (the non-fork) are doing so because they like the ideas of Ethereum but want it to be truly independent. If the fork succeeds many people take it as a sign that Ethereum is a "proprietary" coin rather than a more open "nobody owns it" system like Bitcoin. I have no dog in the fight but that's how I understand it.

Analemma_ 10y ago
> as dubious as some of the things that were done to save mega-banks in 2008. That's a good analogy, but not for the reason you're thinking. The expert consensus on the 2008 bank bailouts is that they had to be done, because letting them fail would've turned the recession into another Great Depression, and that much harder to recover from. Does that mean bailouts are good and proper? No, bailouts are terrible. It means the right way to avoid the moral hazard would have been to better regulate the banks and never have let them get "too big to fail" in the first place. I feel the same way about Ethereum. The DAO hack was a no-win situation, because these "smart contracts" should never have been created to begin with. They're always going to end up in situations like this, because they involve the affairs of messy, imperfect humans. The correct answer to the DAO mess was never to get into it in the first place.
- grandalf 10y ago
  > The correct answer to the DAO mess was never to get into it in the first place. I don't think this is true at all. The DAO is (and was) a very cool idea. The only problem was that the code was complex enough that those who casually reviewed it failed to notice the vulnerability that the attacker noticed. As for the financial crisis, it was a combination of an unexpected event and entrenched interests scrambling to benefit as much as possible from it. By definition, entrenched interests want a continuation of the status quo, and that is what happened. We think about how bad it would have been if some homeowners would have foreclosed, but we fail to think about the people who would have been able to afford a home at a great price.
  - jessaustin 10y ago
    We also fail to imagine the future crises that were made inevitable by the bailouts. If we wanted bankers to learn, we shouldn't have shielded them from the consequences of their poor decisions.
- EdHominem 10y ago
  > The expert consensus on the 2008 bank bailouts is that they had to be done Of a carefully curated set of worse choices, such as "A: Sit back and watch the banks keep going.", sure. There are a ton of ways the bailout could have been done that don't involve giving money to the same people who screwed up before. For instance, let those banks fail but insure the individual depositors (trickle-down to insuring individual holders of MBS-backed retirement funds, etc.) and recapitalize a new set of banks. > because letting them fail would've turned the recession into another Great Depression Yes, letting all banks fail would. But there's no need to throw the baby out with the bath water. > It means the right way to avoid the moral hazard would have been to better regulate the banks and never have let them get "too big to fail" in the first place. Yes, we should try to regulate, but there'll always be new loopholes so we need to stop rewarding the bad actors when, not if, they find a new scam. > [Smart contract]. They're always going to end up in situations like this, because they involve the affairs of messy, imperfect humans. And yet your solution is to add another layer of humans? > The correct answer to the DAO mess was never to get into it in the first place. Like buying Enron. But not all companies are scams and not all smart-contracts will be ineptly written.
joosters 10y ago
I think there is still a lot of dirt that has yet to be dug up regarding the creation of the DAO. For a decentralised system, it certainly had lots of websites quickly set up to promote itself, the ownership of them seemed (I think?) to lead back to the company Slock.it. The DAO was apparently also promoted on Facebook via paid adverts, yet no-one will admit to funding those. Meanwhile, slock.it were angling themselves to be the main recipients of DAO funds. Luckily, the stupid thing broke before they got their hands on the money.

valkea 10y ago

As well as a few digging their heels in, they have been joined by a lot of bitcoiners. Once the hacker or whitehats start selling, this could end up being a pretty significant transfer of wealth from BTC to ETH

jessaustin 10y ago
It's difficult to imagine why this episode would improve ETH's prospects as a store of value, so what could this statement possibly mean?
- pYQAJ6Zm 10y ago
  I suppose it was a typo, and the parent meant exchanging BTC for ETC.
- valkea 10y ago
  BTC holders have been buying into ETC, while a lot of people who are long on ETH have been selling their ETC and plowing that back into ETH. Once the DAO hacker or whitehats start selling the price of ETC is likely to fall off a cliff. Should bring the fork episode to a conclusion. Both of these factors improve ETH's prospects in the short term.

empath75 10y ago

If the code is the contract as they said, then what the guy did couldn't be robbery. If anything, the people who did the hard fork stole his rightfully earned ethereum.

crispyambulance 10y ago

There is a weird belief-system in the ethereum/DAO chatter that I can't quite place my finger on. Not even sure if "libertarian" covers it. I've heard it said that these folks are a form social-darwinists who have decreed (in their sandbox) that "code is law" and that, as such, any and all manipulation of the working code is perfectly acceptable without regard to external factors such as ethics, intent, and reasonable behavioral mores. Its like they've taken the WORST aspects of the real financial systems such as money begetting money, rampant speculation, intractably complex and arbitrary rules, etc and jacked it up to the Nth degree for their monopoly-money world and are now taking it dead seriously (and getting offended when people suggest that their "coins" aren't _really_ worth what they think they're worth-- because, yep, conversion to REAL money is a problem for them). I like the concept of a crypto currency as a way to exchange goods, services (and possibly contracts), but the players thus far leave me completely turned off.

grandalf 10y ago
I think you are missing the point. If the code isn't the law, then what is? The beauty of a "code is law" system is that its behavior is not subject to human interpretation and human biases... we can run a simulation on a test instance of the VM to test whatever scenario we choose, and we may review code and decide whether or not to trust it. Systems like this are inherently adversarial. The idea of a "code is law" sort of system is that code could be developed to deal with the myriad adversarial situations in far more efficient and predictable ways than the way humans have historically dealt with them. Legal uncertainty is a transaction cost and an existential risk in all contracts. In order for Ethereum to avoid this added cost, it would reduce the unpredictability of a contract's outcome. If a hard fork might happen to nullify a transaction, then anyone who is expecting to depend on it must add some uncertainty to his/her portfolio. There there would still be risk of code bugs in a code-is-law system, but over time contract code would be discovered to be trustworthy in the same way that apache's source code is considered largely to be devoid of major security holes.
- dragonwriter 10y ago
  > If the code isn't the law, then what is? The law is the law. And, when effective steps have been taken to prevent real remedies under the law, then, in practice, the war of all against all is the law.

grandalf 10y ago

> Ah, hardcore libertarians. You're all completely mad, but I won't deny you're consistent. The key point is that while laws may be minimally, moderately, or highly flawed, the rule of law is the idea that we should have a proper way of changing them to prevent future events, not just decree one person an evil hacker and a group of other people victims. The hard fork is like if a no parking sign was installed on a street and tickets were issued to everyone who had parked there the previous year, before the sign was in place. Putting up the sign is not a problem, nor is enforcing the rule post-sign, the problem is making a decree that impacts what happened in the past. A ban on ex post facto law is such a core concept in Western civilization that it's pretty shocking anyone would actually think such a rule is a good idea. I suppose one thing that is a universal among humans is the strong desire to form corrupt groups to extract wealth from human systems.

mthoms 10y ago
>A ban on ex post facto law is such a core concept in Western civilization that it's pretty shocking anyone would actually think such a rule is a good idea. Not really a fair comment IMHO. Western Civilizations also have the core concept that intent matters and that not every potential conflict/problem can be foreseen. Thus, you have vaguely worded laws that are subject to human interpretation (courts). I understand that ETH billed itself as being above all that. So I can see why some are justifiably upset. I just think your comment about ex post facto law is a little misleading given that there is, in fact, a great deal of wiggle room afforded to the courts in the West.
- grandalf 10y ago
  Fair point. While I think smart contracts are somewhat modeled after Western courts, the beauty of them is that they are predictable and deterministic. Doing various sorts of forks is quite messy, so perhaps the ideal smart contract system would have another layer between VM and forking.