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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

by 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.

by api 10y ago

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.