7 ms·

The classic chain is still there, anyone can use it if they like. That's probably the best thing that happened, both groups had their own way and went their own

The classic chain is still there, anyone can use it if they like. That's probably the best thing that happened, both groups had their own way and went their own way. You can't satisfy everyone and keep them on the same chain. Technically, no transactions were undone, but the fork agreed to a new state set in the future. The users of the new version also had a choice if they wanted to support the fork or not, the majority went with the fork. It's not like anyone was forced to fork. Actually, you could even run both, and I did for a time until it was clear who was the winner. This is a screenshot of the choice everyone was asked when starting up their wallet: https://upload.wikimedia.org/wikipedia/commons/thumb/d/d7/Ethereum-Wallet_and_Mist_Beta_with_Hard_Fork_choice_0.8.1.png/1113px-Ethereum-Wallet_and_Mist_Beta_with_Hard_Fork_choice_0.8.1.png https://upload.wikimedia.org/wikipedia/commons/thumb/d/d7/Et...

JackC 9y ago
> The classic chain is still there, anyone can use it if they like. That's probably the best thing that happened, both groups had their own way and went their own way. Semantic games aside, this is a classic illegal maneuver in corporate law -- I think the term is "freezeout merger." It works like this: Alex, Beth, and Casey each own 1/3 of FooCo. So Alex and Beth get together and, by a 66% vote, agree to sell the assets of FooCo to BarCo for $1. BarCo just happens to be owned by Alex and Beth without Casey. It's a nice move for Alex and Beth, right? They just each increased their net worth by 50% with a simple legal formality. In fact, if you think about it, this maneuver is always a rational transaction for the majority shareholders in any corporation. Which is why it's illegal -- otherwise it breaks the game. So, what do you think Alex and Beth say in this scenario if they're called on it? They say exactly what you said here: Casey didn't lose anything! She still has 1/3 ownership of FooCo, plus she got her 1/3 of the $1 paid from BarCo, fair and square. No harm, no foul. (No kidding, I've actually had the lawyer for a company that did this to my client try to make this argument across a conference table. Then the lawyer tries to pretend no one has ever had that idea before. Like this wasn't thought of and dealt with about 5 minutes after the first minority shareholder existed.) A court, and the rest of the world, will find this argument ridiculous. The obvious intention and impact of Alex and Beth's action was to take net worth (in real world terms) from Casey and award it to themselves. They can't avoid that by playing clever games with the labels. Likewise, the obvious intention and impact of the Ethereum shareholders' actions was to take net worth (in real world terms) from the DAO hacker and award it to themselves. Play all the games you want with the words, that's what happened. And that's the takeaway: in the law, the minority has protection from the majority. In Ethereum, the majority shareholders rule, and if they decide you don't deserve to have ownership, they can vote to take it for themselves. It's potentially rational to decide you like your chances better with the majority-shareholder-vote-is-law system than the legal system in your jurisdiction. (If you live in the US or a similar jurisdiction then I disagree, but it's an interesting argument anyway.) But trying to pretend no one lost anything from the hard fork just doesn't fly.
- Ajedi32 9y ago
  If you're going to start taking US law and applying it to cryptocurrencies though, then couldn't you also argue that the DAO hacker(s) broke the law and that the funds _should_ be taken from them and returned to their rightful owners? It's rather inconsistent to on the one hand claim that "that's just how Ethereum contracts work; the hackers should be allowed to keep those funds" even though those hacks would clearly be illegal under US law, then on the other hand turn around and say "forking the currency like this is wrong because it'd be illegal if this was a company operating under US law".
  - nkrisc 9y ago
    If that's the case, then you can't even count on the ownership of your cryptocurrency, no? Your assets are subject to the whim of the majority. Decentralized tyranny of the majority? The "attacker" is seen as the "bad guy" so everyone decides to screw him?
    - Ajedi32 9y ago
      You're correct. That's a known property of most cryptocurrencies known as a 51% attack. It's up to you whether you consider that a deal breaker or not.
      - nkrisc 9y ago
        In the case of fork as well, a majority of nodes would need to comply, right? Is it fair to say in both cases it requires a majority participation?
        seveneightn9ne 9y ago
        Yeah, that's what a "hard fork" means - it requires the nodes to actively choose it.
  - holtalanm 9y ago
    Im failing to see how what the DAO exploiter did was actually illegal. The software IS law in the world of Etherium. There is a reason they are called "Smart Contracts", instead of "methods" or "functions". They are designed to be binding. The DAO having a faulty smart contract is akin to someone agreeing to a bad deal. They feel cheated, but there is nothing legally that they can do. Personally, I believe there should never have been a hard fork. The people that invested in the DAO were stupid to do so.

JackC 9y ago

> The classic chain is still there, anyone can use it if they like. That's probably the best thing that happened, both groups had their own way and went their own way. Semantic games aside, this is a classic illegal maneuver in corporate law -- I think the term is "freezeout merger." It works like this: Alex, Beth, and Casey each own 1/3 of FooCo. So Alex and Beth get together and, by a 66% vote, agree to sell the assets of FooCo to BarCo for $1. BarCo just happens to be owned by Alex and Beth without Casey. It's a nice move for Alex and Beth, right? They just each increased their net worth by 50% with a simple legal formality. In fact, if you think about it, this maneuver is always a rational transaction for the majority shareholders in any corporation. Which is why it's illegal -- otherwise it breaks the game. So, what do you think Alex and Beth say in this scenario if they're called on it? They say exactly what you said here: Casey didn't lose anything! She still has 1/3 ownership of FooCo, plus she got her 1/3 of the $1 paid from BarCo, fair and square. No harm, no foul. (No kidding, I've actually had the lawyer for a company that did this to my client try to make this argument across a conference table. Then the lawyer tries to pretend no one has ever had that idea before. Like this wasn't thought of and dealt with about 5 minutes after the first minority shareholder existed.) A court, and the rest of the world, will find this argument ridiculous. The obvious intention and impact of Alex and Beth's action was to take net worth (in real world terms) from Casey and award it to themselves. They can't avoid that by playing clever games with the labels. Likewise, the obvious intention and impact of the Ethereum shareholders' actions was to take net worth (in real world terms) from the DAO hacker and award it to themselves. Play all the games you want with the words, that's what happened. And that's the takeaway: in the law, the minority has protection from the majority. In Ethereum, the majority shareholders rule, and if they decide you don't deserve to have ownership, they can vote to take it for themselves. It's potentially rational to decide you like your chances better with the majority-shareholder-vote-is-law system than the legal system in your jurisdiction. (If you live in the US or a similar jurisdiction then I disagree, but it's an interesting argument anyway.) But trying to pretend no one lost anything from the hard fork just doesn't fly.

Ajedi32 9y ago
If you're going to start taking US law and applying it to cryptocurrencies though, then couldn't you also argue that the DAO hacker(s) broke the law and that the funds _should_ be taken from them and returned to their rightful owners? It's rather inconsistent to on the one hand claim that "that's just how Ethereum contracts work; the hackers should be allowed to keep those funds" even though those hacks would clearly be illegal under US law, then on the other hand turn around and say "forking the currency like this is wrong because it'd be illegal if this was a company operating under US law".
- nkrisc 9y ago
  If that's the case, then you can't even count on the ownership of your cryptocurrency, no? Your assets are subject to the whim of the majority. Decentralized tyranny of the majority? The "attacker" is seen as the "bad guy" so everyone decides to screw him?
  - Ajedi32 9y ago
    You're correct. That's a known property of most cryptocurrencies known as a 51% attack. It's up to you whether you consider that a deal breaker or not.
    - nkrisc 9y ago
      In the case of fork as well, a majority of nodes would need to comply, right? Is it fair to say in both cases it requires a majority participation?
      - seveneightn9ne 9y ago
        Yeah, that's what a "hard fork" means - it requires the nodes to actively choose it.
- holtalanm 9y ago
  Im failing to see how what the DAO exploiter did was actually illegal. The software IS law in the world of Etherium. There is a reason they are called "Smart Contracts", instead of "methods" or "functions". They are designed to be binding. The DAO having a faulty smart contract is akin to someone agreeing to a bad deal. They feel cheated, but there is nothing legally that they can do. Personally, I believe there should never have been a hard fork. The people that invested in the DAO were stupid to do so.