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Here are just two thought experiments I'd love to hear Colony/elena_di explain: Hypothetical 1: You and a growing team of incredibly engaged Colony members bui

Here are just two thought experiments I'd love to hear Colony/elena_di explain: Hypothetical 1: You and a growing team of incredibly engaged Colony members build out a $10M/yr revenue stream. Edge case leaks 87% of tokens to a dedicated hacker. Sorry? Hypothetical 2: I like/hate your successful Colony. So I locate and bribe/extort your main influencer/s to push your project into the ground (block work, object to everything, whatever) or in my preferred direction. Code is law. Obey? There are so many other fun problems with code-as-immutable-law for human institutions, it's concerning that none of these are even remotely addressed in the Colony literature (not to mention that the full, binding, self-regulating dispute mechanism fails horribly in both the above scenarios).

gedrap 9y ago
> I locate and bribe/extort your main influencer/s to push your project into the ground (block work, object to everything, whatever) or in my preferred direction How's that any different from the current state? Execs of current companies are humans with power to run the company into the ground. You can extort/bribe them like that as well. How does it change anything?
- DRAOBE 9y ago
  Well, there is actual law against it? https://www.nytimes.com/2015/12/02/nyregion/ex-citigroup-construction-executive-admits-taking-500000-in-bribes.html https://www.nytimes.com/2015/12/02/nyregion/ex-citigroup-con...
- popcorncowboy 9y ago
  fab13n made a similar comment on this line. So thanks to both of you for illustrating the point (genuinely): > "How does it change anything?" The action itself may appear the same, but in code-as-law systems the consequences of this action change everything. The system of governance is immutable. If I can coerce your primary influencer to destroy your Colony _there is nothing you can do about it_, because the system is still _working exactly as designed_. Like an AI auto-pilot flying you into a mountain at high speed because it got a correctly formed override instruction to do so. In the real world we have multiple interpretive, negotiated, social conventions to deal with bad actors, agents and outcomes that violate the spirit or intention of underlying agreements. The lack of these are EXACTLY the problem in a "code as law" system - and worryingly it shows that most of our intuitive responses to bad agency in these type systems is still "but it's the same in the real world". Except of course for the existential threat posed by immutability of consequence and recourse. You cannot remove trust from collective human agency, you can only put it somewhere else and pretend like it doesn't matter anymore. Right up until it does. > Execs of current companies are humans with power to run the company into the ground. I get what you mean, but in practice you can't wilfully do this without serious consequence. To destroy value is to take it from someone. Fiduciary duty is a legal reality.
  - digikata 9y ago
    I think it's good to press hard on how newly proposed code-as-law systems work, but at the same time, how are gaps between code-as-law larger or different from say an executive that skims money out of a company, transferring it to other bank accounts. The banking system isn't enforcing any legal contracts in that transaction, and if the malfeasance is discovered then some legal recovery action would order or capture assets to be transferred back. Couldn't a court of law order assets be transferred to a wronged party in a code-as-law system? Edit: I do think a good "control test" of many of the code-as-law systems is to compare against cases about how it would be different than a ledger managed by a person & the existing legal framework around it, and then a centralized database with security around certain operations.
- mtnygard 9y ago
  It happens, but when it does happen, people have recourse to a totally different system: the courts. I think of it like raising the issue up out of the system Corporate Management and into the system Legal Enforcement. It is patently not a perfect system, but the failures are notable because they are not common. Most shareholder lawsuits against management are resolved before anyone ends up in headlines.
fab13n 9y ago
> 1. Edge case leaks 87% of tokens to a dedicated hacker. Sorry? The level of code safety in smart contracts is abysmally bad today, Ethereum didn't further the state of the art with EVM/Solidity (quite the opposite), and this needs to be fixed before any serious business can rely on a DApp. Smart contracts are like aerospace engineering, not like iStore apps development; delivering slightly buggy code, written as fast as possible, by easily interchangeable developers, doesn't cut it. It's worse than for aerospace actually: when you design a plane, your opponents are the laws of physics, which merely don't care about you. When designing a smart contract, hackers are specifically after you, and statistically, some of them are smarter than you and your code. > 2. I locate and bribe/extort your main influencer/s How is it different from the current practices of bribing executives and misleading shareholders (naively supposing that shareholders need to be mislead in order to pass bad, narrow-sighted judgements)? > There are so many other fun problems with code-as-immutable-law for human institutions. Indeed! > It's concerning that none of these are even remotely addressed in the Colony literature I take Colony as an experiment. As hinted above, I think you'd be a fool to bet your livelihood on some Solidity code. I don't think we're able to foresee which of those problems matter, nor the compromises which best mitigate them. Like in code optimisation, you need to measure before acting; Colony will meet those issues, will try to address them, and may or may not survive the process. Whether the lessons learned benefit Colony 2.0 or another project raised from its ashes, it's hard to say, but in the great scheme of things, it doesn't matter much.
- DRAOBE 9y ago
  With actual people you can informally convince either colleagues or the state that an exec is acting in bad faith of outside the policy framework of the company. And this can trigger formally defined actions. A sort of protection against deceit is built in by the fact that regulations are merely social conventions and not physically binding. How do you informally convince code to stop trusting a certain influencer? You'd have to put in code paths managing this first, because code is a physically binding regulation.
- popcorncowboy 9y ago
  Precisely. > ...bribing executives and misleading shareholders You raise an interesting point - in a Colony there is presumably no concept of enforceable fiduciary duty to shareholders (because there are none - we're not trading securities, we're trading plastic house chips on a blockchain). There are no legislated considerations for other members/colonists/dappsters/etc. I can vote/act with impunity, regardless of value creation/destruction potential. Welcome to the legal grey zone. > I take Colony as an experiment. As do I, and one I hope succeeds. But I'm not sure THEY do, which means early adopters are riding a bet that Colony gets it right the first time.
thiagodelgado 9y ago
Hypothetical 1: Contract security is taken very, very seriously, and discussed in section 2.2 of the whitepaper. The short answer is that colonies will have a 'recovery mode' whereby whitelisted addresses have the ability to alter some state of the colony contract directly. This should, in principle, prevent the circumstances enabling such an exploit from ever happening. In that sense, the hypothetical is moot. The situation you really are getting at is one in which the Common Colony is mature enough that the 'recovery mode' features have been disabled and the contract is in full community control (a reasonable assumption if the Common Colony is pulling down $10M a year as you suggested). In this case, it also seems reasonable that some of that $10M a year will be spent by the Common Colony on bug bounties and internal security, paid to experts who have the highest reputation scores. If somehow there was still some brilliant exploit by a hacker who was both skilled enough to outsmart many, many world-class developers all working together, malicious enough to forgo the generous bounty awarded for disclosing the exploit to the Common Colony security domain, and downright detestable enough to willingly crash an enormously successful DAO... well, the answer is simply ¯\_(ツ)_/¯ Hypothetical 2: This is where the reputation system gets interesting. If you really wanted to try to gum up a colony's inner workings by 'objecting to everything' or somehow interfering with the normal day-to-day workflows, you yourself would need some reputation score to do that. With each objection, you would be required to stake your own tokens and reputation on the outcome of the dispute. If the other members of the colony don't approve of what you're doing (I don't see why they would if you're trying to push the colony into the ground), they will vote against you and you will lose tokens and reputation. So with each unsuccessful attempt to interfere with the colony you hate, your own ability to influence that colony will diminish substantially. Section 9 in the whitepaper describes these mechanisms in detail.
- stefano 9y ago
  > well, the answer is simply ¯\_(ツ)_/¯ That's not a great answer to a very realistic case.
  - mgkabar 9y ago
    I think the many sentences that come before the shrug emoji illustrate that the case is not very realistic. You're taking the final, sarcastic closing comment out of context.
denisnazarov 9y ago
For 1: The colony fixes the bug and creates a fork of the contract state (balances, etc) before the hack, so everyone has the same balance but there is no longer a bug. There should be consensus on using this fork going forward because everyone that has created value or invested is incentivized to do so.

gedrap 9y ago

> I locate and bribe/extort your main influencer/s to push your project into the ground (block work, object to everything, whatever) or in my preferred direction How's that any different from the current state? Execs of current companies are humans with power to run the company into the ground. You can extort/bribe them like that as well. How does it change anything?

DRAOBE 9y ago
Well, there is actual law against it? https://www.nytimes.com/2015/12/02/nyregion/ex-citigroup-construction-executive-admits-taking-500000-in-bribes.html https://www.nytimes.com/2015/12/02/nyregion/ex-citigroup-con...
popcorncowboy 9y ago
fab13n made a similar comment on this line. So thanks to both of you for illustrating the point (genuinely): > "How does it change anything?" The action itself may appear the same, but in code-as-law systems the consequences of this action change everything. The system of governance is immutable. If I can coerce your primary influencer to destroy your Colony _there is nothing you can do about it_, because the system is still _working exactly as designed_. Like an AI auto-pilot flying you into a mountain at high speed because it got a correctly formed override instruction to do so. In the real world we have multiple interpretive, negotiated, social conventions to deal with bad actors, agents and outcomes that violate the spirit or intention of underlying agreements. The lack of these are EXACTLY the problem in a "code as law" system - and worryingly it shows that most of our intuitive responses to bad agency in these type systems is still "but it's the same in the real world". Except of course for the existential threat posed by immutability of consequence and recourse. You cannot remove trust from collective human agency, you can only put it somewhere else and pretend like it doesn't matter anymore. Right up until it does. > Execs of current companies are humans with power to run the company into the ground. I get what you mean, but in practice you can't wilfully do this without serious consequence. To destroy value is to take it from someone. Fiduciary duty is a legal reality.
- digikata 9y ago
  I think it's good to press hard on how newly proposed code-as-law systems work, but at the same time, how are gaps between code-as-law larger or different from say an executive that skims money out of a company, transferring it to other bank accounts. The banking system isn't enforcing any legal contracts in that transaction, and if the malfeasance is discovered then some legal recovery action would order or capture assets to be transferred back. Couldn't a court of law order assets be transferred to a wronged party in a code-as-law system? Edit: I do think a good "control test" of many of the code-as-law systems is to compare against cases about how it would be different than a ledger managed by a person & the existing legal framework around it, and then a centralized database with security around certain operations.
mtnygard 9y ago
It happens, but when it does happen, people have recourse to a totally different system: the courts. I think of it like raising the issue up out of the system Corporate Management and into the system Legal Enforcement. It is patently not a perfect system, but the failures are notable because they are not common. Most shareholder lawsuits against management are resolved before anyone ends up in headlines.

fab13n 9y ago

> 1. Edge case leaks 87% of tokens to a dedicated hacker. Sorry? The level of code safety in smart contracts is abysmally bad today, Ethereum didn't further the state of the art with EVM/Solidity (quite the opposite), and this needs to be fixed before any serious business can rely on a DApp. Smart contracts are like aerospace engineering, not like iStore apps development; delivering slightly buggy code, written as fast as possible, by easily interchangeable developers, doesn't cut it. It's worse than for aerospace actually: when you design a plane, your opponents are the laws of physics, which merely don't care about you. When designing a smart contract, hackers are specifically after you, and statistically, some of them are smarter than you and your code. > 2. I locate and bribe/extort your main influencer/s How is it different from the current practices of bribing executives and misleading shareholders (naively supposing that shareholders need to be mislead in order to pass bad, narrow-sighted judgements)? > There are so many other fun problems with code-as-immutable-law for human institutions. Indeed! > It's concerning that none of these are even remotely addressed in the Colony literature I take Colony as an experiment. As hinted above, I think you'd be a fool to bet your livelihood on some Solidity code. I don't think we're able to foresee which of those problems matter, nor the compromises which best mitigate them. Like in code optimisation, you need to measure before acting; Colony will meet those issues, will try to address them, and may or may not survive the process. Whether the lessons learned benefit Colony 2.0 or another project raised from its ashes, it's hard to say, but in the great scheme of things, it doesn't matter much.

DRAOBE 9y ago
With actual people you can informally convince either colleagues or the state that an exec is acting in bad faith of outside the policy framework of the company. And this can trigger formally defined actions. A sort of protection against deceit is built in by the fact that regulations are merely social conventions and not physically binding. How do you informally convince code to stop trusting a certain influencer? You'd have to put in code paths managing this first, because code is a physically binding regulation.
popcorncowboy 9y ago
Precisely. > ...bribing executives and misleading shareholders You raise an interesting point - in a Colony there is presumably no concept of enforceable fiduciary duty to shareholders (because there are none - we're not trading securities, we're trading plastic house chips on a blockchain). There are no legislated considerations for other members/colonists/dappsters/etc. I can vote/act with impunity, regardless of value creation/destruction potential. Welcome to the legal grey zone. > I take Colony as an experiment. As do I, and one I hope succeeds. But I'm not sure THEY do, which means early adopters are riding a bet that Colony gets it right the first time.

thiagodelgado 9y ago

Hypothetical 1: Contract security is taken very, very seriously, and discussed in section 2.2 of the whitepaper. The short answer is that colonies will have a 'recovery mode' whereby whitelisted addresses have the ability to alter some state of the colony contract directly. This should, in principle, prevent the circumstances enabling such an exploit from ever happening. In that sense, the hypothetical is moot. The situation you really are getting at is one in which the Common Colony is mature enough that the 'recovery mode' features have been disabled and the contract is in full community control (a reasonable assumption if the Common Colony is pulling down $10M a year as you suggested). In this case, it also seems reasonable that some of that $10M a year will be spent by the Common Colony on bug bounties and internal security, paid to experts who have the highest reputation scores. If somehow there was still some brilliant exploit by a hacker who was both skilled enough to outsmart many, many world-class developers all working together, malicious enough to forgo the generous bounty awarded for disclosing the exploit to the Common Colony security domain, and downright detestable enough to willingly crash an enormously successful DAO... well, the answer is simply ¯\_(ツ)_/¯ Hypothetical 2: This is where the reputation system gets interesting. If you really wanted to try to gum up a colony's inner workings by 'objecting to everything' or somehow interfering with the normal day-to-day workflows, you yourself would need some reputation score to do that. With each objection, you would be required to stake your own tokens and reputation on the outcome of the dispute. If the other members of the colony don't approve of what you're doing (I don't see why they would if you're trying to push the colony into the ground), they will vote against you and you will lose tokens and reputation. So with each unsuccessful attempt to interfere with the colony you hate, your own ability to influence that colony will diminish substantially. Section 9 in the whitepaper describes these mechanisms in detail.

stefano 9y ago
> well, the answer is simply ¯\_(ツ)_/¯ That's not a great answer to a very realistic case.
- mgkabar 9y ago
  I think the many sentences that come before the shrug emoji illustrate that the case is not very realistic. You're taking the final, sarcastic closing comment out of context.

denisnazarov 9y ago

For 1: The colony fixes the bug and creates a fork of the contract state (balances, etc) before the hack, so everyone has the same balance but there is no longer a bug. There should be consensus on using this fork going forward because everyone that has created value or invested is incentivized to do so.