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>> In the serious crypto world, there is a maxim: Code is Law. Yeah, what's this thing of code is law. I was discussing with a friend today on how governments

>> In the serious crypto world, there is a maxim: Code is Law. Yeah, what's this thing of code is law. I was discussing with a friend today on how governments might have to come in to regulated some financial transactions with crypto based assets. And he vehemently kept repeating that no government can regulate crypto because "code is law". We went down to the physics level to see why it's not impossible to do. Only for me to come here again and start seeing code is law. High time someone explained it better.

puranjay 5y ago
It essentially means that the Code is the product. Everything is visible and public. Every smart contract can be publicly viewed and verified. If the code isn't up to scratch, you can review it. If it has an exploit, you can detect it. Whatever it is doing, is transparent. You can't say the same when you deposit money into, say, Robinhood. You don't know what the code is doing with that money.
- kaladin_1 5y ago
  >> You can't say the same when you deposit money into, say, Robinhood How do you know what the major exchanges are doing as well? By the way, how did the exchanges wind up becoming so powerful and rich. Becoming almost a parallel Wall Street, just a smaller one, in a system that was supposed to ultimately democratise power. Some people with resources managed to emerge at the top in decision making...
  - puranjay 5y ago
    You don’t have to use an exchange at all. Decentralized exchanges have been around for quite a while and have massive volume. And their governance is entirely controlled by DAOs
  - TimJRobinson 5y ago
    Centralized exchanges are a necessary evil for now. DeFi (Decentralized Finance) is where code is law. Services like Uniswap, Curve, Aave etc are all just code that you interact with on Ethereum. Once you've onboarded into the decentralized world you can use them at will and eventually you'll be able to live your life without having to use centralized services again.
    - Kbelicius 5y ago
      > Centralized exchanges are a necessary evil for now. DeFi (Decentralized Finance) is where code is law. Services like Uniswap, Curve, Aave etc are all just code that you interact with on Ethereum. Code is not law and I doubt it can ever be. IIRC ethereum even had that saying on their web page until that stance threatened to lose a lot of money to people with power within ethereum.
TimJRobinson 5y ago
When you put money in your bank account, where does it go? Who uses it? When you purchase shares, where do they come from? How many market makers were involved? How much profit did they make front-running your purchase? All these things are currently completely opaque to the average person. Decentralized Finance fixes this. Every transaction and system you interact with is completely open source, transparent, and fair for everyone involved. There are no rich and powerful people taking a cut of your money every time you use the system, as it is in traditional finance. You can see the exact code doing what you want done, and nobody can stop it doing that, or change the rules part way through (see: the Robinhood GME saga) Traditionally the government set the rules, but the government can be corrupted. Most people know that wall street regularly breaks the law if the profit they make will be greater than `fines they pay * risk of getting caught`. Until now there was nothing we could do about this. Code can't be corrupted in the same way.
- wespiser_2018 5y ago
  > All these things are currently completely opaque to the average person. Decentralized Finance fixes this Code is opaque to people as well, most SWEs struggle to understand distributed systems that are using consensus protocols much simpler than byzantine fault tolerance, or programming on environment are non-adversarial, unlike solidity. You can't just learn solidity and then trust smart contracts, it takes a lot of knowledge to avoid vulnerabilities. > Code can't be corrupted in the same way. If you think this, you might be in your a rude awakening. "Code" is being used in crypto-currencies for corruption all the time, and there is no inherent property of computers that protects you against malice, theft and vice. I personally don't want to live in a world where I need to audit the code for every financial transaction I'm party to, and fortunately I live in a country with a mostly working legal system that already handles this for me.
  - TimJRobinson 5y ago
    > Code is opaque to people as well, most SWEs struggle to understand distributed systems that are using consensus protocols much simpler than byzantine fault tolerance, or programming on environment are non-adversarial, unlike solidity. You can't just learn solidity and then trust smart contracts, it takes a lot of knowledge to avoid vulnerabilities. It's open source vs closed source arguments again. I have personally never looked at the Linux Kernel or Ubuntu source code, but I trust it more than I trust Windows because I know many thousands of people have looked at it before me and said it's secure. > "Code" is being used in crypto-currencies for corruption all the time, and there is no inherent property of computers that protects you against malice, theft and vice. I'm sure it is, code can also be used to create viruses and malware but that doesn't mean Linux is insecure. It's about the transparency of the code and systems you use. More transparency = more trust = better outcomes. I'd rather live in a transparent, fair world, than one where those with more power and money get to set the rules and hide the internal workings from everyone else.

puranjay 5y ago

It essentially means that the Code is the product. Everything is visible and public. Every smart contract can be publicly viewed and verified. If the code isn't up to scratch, you can review it. If it has an exploit, you can detect it. Whatever it is doing, is transparent. You can't say the same when you deposit money into, say, Robinhood. You don't know what the code is doing with that money.

kaladin_1 5y ago
>> You can't say the same when you deposit money into, say, Robinhood How do you know what the major exchanges are doing as well? By the way, how did the exchanges wind up becoming so powerful and rich. Becoming almost a parallel Wall Street, just a smaller one, in a system that was supposed to ultimately democratise power. Some people with resources managed to emerge at the top in decision making...
- puranjay 5y ago
  You don’t have to use an exchange at all. Decentralized exchanges have been around for quite a while and have massive volume. And their governance is entirely controlled by DAOs
- TimJRobinson 5y ago
  Centralized exchanges are a necessary evil for now. DeFi (Decentralized Finance) is where code is law. Services like Uniswap, Curve, Aave etc are all just code that you interact with on Ethereum. Once you've onboarded into the decentralized world you can use them at will and eventually you'll be able to live your life without having to use centralized services again.
  - Kbelicius 5y ago
    > Centralized exchanges are a necessary evil for now. DeFi (Decentralized Finance) is where code is law. Services like Uniswap, Curve, Aave etc are all just code that you interact with on Ethereum. Code is not law and I doubt it can ever be. IIRC ethereum even had that saying on their web page until that stance threatened to lose a lot of money to people with power within ethereum.

TimJRobinson 5y ago

When you put money in your bank account, where does it go? Who uses it? When you purchase shares, where do they come from? How many market makers were involved? How much profit did they make front-running your purchase? All these things are currently completely opaque to the average person. Decentralized Finance fixes this. Every transaction and system you interact with is completely open source, transparent, and fair for everyone involved. There are no rich and powerful people taking a cut of your money every time you use the system, as it is in traditional finance. You can see the exact code doing what you want done, and nobody can stop it doing that, or change the rules part way through (see: the Robinhood GME saga) Traditionally the government set the rules, but the government can be corrupted. Most people know that wall street regularly breaks the law if the profit they make will be greater than `fines they pay * risk of getting caught`. Until now there was nothing we could do about this. Code can't be corrupted in the same way.

wespiser_2018 5y ago
> All these things are currently completely opaque to the average person. Decentralized Finance fixes this Code is opaque to people as well, most SWEs struggle to understand distributed systems that are using consensus protocols much simpler than byzantine fault tolerance, or programming on environment are non-adversarial, unlike solidity. You can't just learn solidity and then trust smart contracts, it takes a lot of knowledge to avoid vulnerabilities. > Code can't be corrupted in the same way. If you think this, you might be in your a rude awakening. "Code" is being used in crypto-currencies for corruption all the time, and there is no inherent property of computers that protects you against malice, theft and vice. I personally don't want to live in a world where I need to audit the code for every financial transaction I'm party to, and fortunately I live in a country with a mostly working legal system that already handles this for me.
- TimJRobinson 5y ago
  > Code is opaque to people as well, most SWEs struggle to understand distributed systems that are using consensus protocols much simpler than byzantine fault tolerance, or programming on environment are non-adversarial, unlike solidity. You can't just learn solidity and then trust smart contracts, it takes a lot of knowledge to avoid vulnerabilities. It's open source vs closed source arguments again. I have personally never looked at the Linux Kernel or Ubuntu source code, but I trust it more than I trust Windows because I know many thousands of people have looked at it before me and said it's secure. > "Code" is being used in crypto-currencies for corruption all the time, and there is no inherent property of computers that protects you against malice, theft and vice. I'm sure it is, code can also be used to create viruses and malware but that doesn't mean Linux is insecure. It's about the transparency of the code and systems you use. More transparency = more trust = better outcomes. I'd rather live in a transparent, fair world, than one where those with more power and money get to set the rules and hide the internal workings from everyone else.