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On the actual contract, it's possible a court would find that the contract was between parties x and y, and therefore party z inserting themselves into it is no

On the actual contract, it's possible a court would find that the contract was between parties x and y, and therefore party z inserting themselves into it is not valid. Often law comes down to intent, so the hacker could well find themselves in trouble, even if technically all they did was play by the rules allowed by the contract. There is another interesting point here, which I think applies to Bitcoin too - if the blockchain/smart contract is the distributed source of truth and lets you deal with untrusted third parties without a middleman, it shouldn't require external arbitration. If you need external arbitration in the event of problems, which requires verifying identity, intent, etc, why not have a central system with strong identities and regulatory bodies in the first place and forget the distributed system (which is slower and another point of failure), since the centralised system is what you fall back to anyway when the distributed trust fails.

stale2002 9y ago
Courts will absolutely use intent to judge contracts. The interesting thing with the DAO though, was the explicit INTENT of the contract, was for it to be entirely governed by the code. As in, the announcement website, and all the marketing for the DAO included a whole lot of lines like "None of the information here is binding. The only thing that it binding is the code. The contract is the code". So, it is arguable, that allowing people to exploit "bugs" in the code was actually intended. Of course, they didn't think there were going to be any bugs, but I bet that if you asked the DAO people ahead of time, before the bugs were found, something like "Hey, if I find a bug and exploit it, is that within the contract?", then i bet that the DAO people would have said yes.
- detaro 9y ago
  This article is not about the DAO hack.
  - eridius 9y ago
    Not specifically, no, but the topic of the article applies equally well to the DAO hack as it does to the more recent one.
- grey-area 9y ago
  While this isn't about DAO, its true that recourse to courts undermines a central tenet of smart contracts, hence as you say DAO people would probably insist the code is the contract, until a problem occurs. In fact the DAO fork brings up another problem which applies to Bitcoin too - the developers (and miners if a POW coin) are de facto arbiters of the fate of millions, and if this sort of system were to gain widespread use, would have enormous power, in fact they already do even if you think the coins are overvalued. They decide if a fork is justified, a change will be adopted, or a tweak to algorithms to discourage certain behaviour. They become in some ways a parallel system of government/law without accountability. For all the pretence that people can just fork the project or choose another client, we've seen how hard that is to pull off, and how much influence is retained by the central developers of such a project with the recent Bitcoin Cash fracas.
  - IIAOPSW 9y ago
    this is the original sin of bitcoin. Either the protocol can't be updated even for legitimate technical reasons or there exists a group of people who can change bitcoin arbitrarily thus defeating the purpose. Right now the answer seems to be that a bitcoin politic exists but it is an extremely conservative politics. The miners know that if they are seen to be a centralized body in control then the value of bitcoin (and thus their own wealth) vanishes. Thus the miner cabal must pretend it doesn't exist. As more "normie" users join the miners might get more embolden and Satoshi's vision lost. What is to stop miners from creating a fork where the block reward never goes down?
    - grey-area 9y ago
      Agreed. This cuts to the heart of my objections to bitcoin.
- tylersmith 9y ago
  The intent of all smart contracts is to be exactly what the code says. That is why they exist. For any case where you want to consider intent you should not use smart contracts. People using smart contracts when that's not what they really want are going to cause damage to the ecosystem that will take years to undo.
  - msbarnett 9y ago
    The question becomes, under what circumstances would you EVER want to use a smart contract for a non-trivial amount of money? Since smart contracts are software, and all software has bugs, and to a first approximation nobody is interested in having a significant amount of their money, time, or goods erased by a software bug, of what use are these things other than as a curiosity?
    - devrandomguy 9y ago
      They would be useful for making agreements across a large imbalance of power. For example, if I am a one-person operation selling on Amazon, and they screw me over in a clever way, I could not afford to fight them in court. Even if they would have lost, I might simply be incapable of pursuing the case to the end. I personally would much rather use smart contracts for making deals with employers, the overlords of the marketplaces, foreign clients, etc. Maybe it's just because I'm a programmer, but I would rather fail because of my own bug, than get screwed over and Nelson-laughed at by a bunch of powerful people. I can improve my contract-coding methodology, but I can't do much about other people's shadiness.
      - msbarnett 9y ago
        Employers, "overlords", etc with considerably more power than you are practically by definition going to be able to spend more money finding exploitable bugs in your code than you would be able to put into bug-proofing it. The odds that you can improve your contract-coding methodology to such a degree that you write no bugs is most likely nil. You haven't been able to do that in your non-contract code, and the stakes there are much lower. Besides, how many mistakes will you be able to afford to learn from while avoiding complete financial ruin? Edit: you've also got the threat model wrong. With a traditional contract, your only concern is the other party (your employer, say). With a "smart" contract, you also have to worry about any 3rd party who can wander by, notice a bug in your contract, and use it to avail themselves to your income. You've got all the same second-party worries (my employer will use their resources to find a way to screw me) plus a whole new 3rd party attack surface.
ollieshmollie 9y ago
I agree. I took the crux of the article to be, "What's the point of smart contracts?", not "The hacker in this case didn't do anything wrong."
deleted 9y ago
[deleted]
coretx 9y ago
Intent as the premise for judgement is typical for Western rights philosophy, but it's not for large other parts of the world , and that is a fact. Furthermore, the acts of Z could be part of X or Y operandi, but this is probably unfalsifiable.

stale2002 9y ago

Courts will absolutely use intent to judge contracts. The interesting thing with the DAO though, was the explicit INTENT of the contract, was for it to be entirely governed by the code. As in, the announcement website, and all the marketing for the DAO included a whole lot of lines like "None of the information here is binding. The only thing that it binding is the code. The contract is the code". So, it is arguable, that allowing people to exploit "bugs" in the code was actually intended. Of course, they didn't think there were going to be any bugs, but I bet that if you asked the DAO people ahead of time, before the bugs were found, something like "Hey, if I find a bug and exploit it, is that within the contract?", then i bet that the DAO people would have said yes.

detaro 9y ago
This article is not about the DAO hack.
- eridius 9y ago
  Not specifically, no, but the topic of the article applies equally well to the DAO hack as it does to the more recent one.
grey-area 9y ago
While this isn't about DAO, its true that recourse to courts undermines a central tenet of smart contracts, hence as you say DAO people would probably insist the code is the contract, until a problem occurs. In fact the DAO fork brings up another problem which applies to Bitcoin too - the developers (and miners if a POW coin) are de facto arbiters of the fate of millions, and if this sort of system were to gain widespread use, would have enormous power, in fact they already do even if you think the coins are overvalued. They decide if a fork is justified, a change will be adopted, or a tweak to algorithms to discourage certain behaviour. They become in some ways a parallel system of government/law without accountability. For all the pretence that people can just fork the project or choose another client, we've seen how hard that is to pull off, and how much influence is retained by the central developers of such a project with the recent Bitcoin Cash fracas.
- IIAOPSW 9y ago
  this is the original sin of bitcoin. Either the protocol can't be updated even for legitimate technical reasons or there exists a group of people who can change bitcoin arbitrarily thus defeating the purpose. Right now the answer seems to be that a bitcoin politic exists but it is an extremely conservative politics. The miners know that if they are seen to be a centralized body in control then the value of bitcoin (and thus their own wealth) vanishes. Thus the miner cabal must pretend it doesn't exist. As more "normie" users join the miners might get more embolden and Satoshi's vision lost. What is to stop miners from creating a fork where the block reward never goes down?
  - grey-area 9y ago
    Agreed. This cuts to the heart of my objections to bitcoin.
tylersmith 9y ago
The intent of all smart contracts is to be exactly what the code says. That is why they exist. For any case where you want to consider intent you should not use smart contracts. People using smart contracts when that's not what they really want are going to cause damage to the ecosystem that will take years to undo.
- msbarnett 9y ago
  The question becomes, under what circumstances would you EVER want to use a smart contract for a non-trivial amount of money? Since smart contracts are software, and all software has bugs, and to a first approximation nobody is interested in having a significant amount of their money, time, or goods erased by a software bug, of what use are these things other than as a curiosity?
  - devrandomguy 9y ago
    They would be useful for making agreements across a large imbalance of power. For example, if I am a one-person operation selling on Amazon, and they screw me over in a clever way, I could not afford to fight them in court. Even if they would have lost, I might simply be incapable of pursuing the case to the end. I personally would much rather use smart contracts for making deals with employers, the overlords of the marketplaces, foreign clients, etc. Maybe it's just because I'm a programmer, but I would rather fail because of my own bug, than get screwed over and Nelson-laughed at by a bunch of powerful people. I can improve my contract-coding methodology, but I can't do much about other people's shadiness.
    - msbarnett 9y ago
      Employers, "overlords", etc with considerably more power than you are practically by definition going to be able to spend more money finding exploitable bugs in your code than you would be able to put into bug-proofing it. The odds that you can improve your contract-coding methodology to such a degree that you write no bugs is most likely nil. You haven't been able to do that in your non-contract code, and the stakes there are much lower. Besides, how many mistakes will you be able to afford to learn from while avoiding complete financial ruin? Edit: you've also got the threat model wrong. With a traditional contract, your only concern is the other party (your employer, say). With a "smart" contract, you also have to worry about any 3rd party who can wander by, notice a bug in your contract, and use it to avail themselves to your income. You've got all the same second-party worries (my employer will use their resources to find a way to screw me) plus a whole new 3rd party attack surface.

ollieshmollie 9y ago

I agree. I took the crux of the article to be, "What's the point of smart contracts?", not "The hacker in this case didn't do anything wrong."

deleted 9y ago

[deleted]

coretx 9y ago

Intent as the premise for judgement is typical for Western rights philosophy, but it's not for large other parts of the world , and that is a fact. Furthermore, the acts of Z could be part of X or Y operandi, but this is probably unfalsifiable.