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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 th

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.
- flashmob 9y ago
  tbf, the bug was triggered not only because of theDao's code, but because of a combination of other conditions, including the way the virtual machine executed the code. The meat of the exploit was executed in the attacker's contract, as explained here https://medium.com/@MyPaoG/explaining-the-dao-exploit-for-beginners-in-solidity-80ee84f0d470 https://medium.com/@MyPaoG/explaining-the-dao-exploit-for-be... The token holders of theDao did not approve running of the attacker's contract, since they did not agree to the attacker's contract. At least that's how I interpret it. Also, the word "contract" is not the same as a contract in law, it's more of a buzzword. They are just programs. So I don't think a program can have legal meaning by itself because it also depends of the semantics of the machine & how it interprets the programs. What happens if the code is correct, but something in the machine is broken? The rules of the Ethereum virtual machine were altered later. I think the 'fallback function' now has a limit of 23k gas, correct me if I'm wrong, so attacks like these are more difficult, if even possible.
JackC 9y ago
> "forking the currency like this is wrong because it'd be illegal if this was a company operating under US law" That's not my argument. My argument is that there's a reason it's illegal under US law (and presumably in other functioning legal systems): because it has to be illegal for the game theory of vote-per-share corporations to work. Otherwise entering a corporation as a minority shareholder is irrational. If you abandon the legal system's protection for minority shareholders, you're assuming that you don't need those protections -- that somehow cryptocurrency game theory works differently than the game theory of legal corporations. I suspect that's wrong. But either way, we have to at least be clear about the practical impact of Ethereum's hard fork in order to have the debate.

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.

flashmob 9y ago
tbf, the bug was triggered not only because of theDao's code, but because of a combination of other conditions, including the way the virtual machine executed the code. The meat of the exploit was executed in the attacker's contract, as explained here https://medium.com/@MyPaoG/explaining-the-dao-exploit-for-beginners-in-solidity-80ee84f0d470 https://medium.com/@MyPaoG/explaining-the-dao-exploit-for-be... The token holders of theDao did not approve running of the attacker's contract, since they did not agree to the attacker's contract. At least that's how I interpret it. Also, the word "contract" is not the same as a contract in law, it's more of a buzzword. They are just programs. So I don't think a program can have legal meaning by itself because it also depends of the semantics of the machine & how it interprets the programs. What happens if the code is correct, but something in the machine is broken? The rules of the Ethereum virtual machine were altered later. I think the 'fallback function' now has a limit of 23k gas, correct me if I'm wrong, so attacks like these are more difficult, if even possible.

JackC 9y ago

> "forking the currency like this is wrong because it'd be illegal if this was a company operating under US law" That's not my argument. My argument is that there's a reason it's illegal under US law (and presumably in other functioning legal systems): because it has to be illegal for the game theory of vote-per-share corporations to work. Otherwise entering a corporation as a minority shareholder is irrational. If you abandon the legal system's protection for minority shareholders, you're assuming that you don't need those protections -- that somehow cryptocurrency game theory works differently than the game theory of legal corporations. I suspect that's wrong. But either way, we have to at least be clear about the practical impact of Ethereum's hard fork in order to have the debate.