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The eth classic fork was because of the first high profile hack of a smart contract leading to massive loss of funds (way way back in 2016 - https://en.wikipedi

by zer01 5y ago

The eth classic fork was because of the first high profile hack of a smart contract leading to massive loss of funds (way way back in 2016 - https://en.wikipedia.org/wiki/The_DAO_(organization) https://en.wikipedia.org/wiki/The_DAO_(organization)). The Ethereum community back then was a fraction of a fraction of a percent of what it is compared to the size today, and that early on in the network I don't think it was a detrimental thing to do like it would be today. > No one can save you from your own deadly mistakes. Alternatively, "You really really have to give a shit about your own security". Imagine if banks had some skin in the game in terms of their security story. Why was I able to have 2 factor on my world of warcraft account many years before my bank account? You're right in that crypto is a cold world of immutability, but in the same way that exposing servers and data to the internet (along with all the hacks, identity theft, etc that came with it) ultimately led to better security protections like ASLR, DEP, Yubikeys, etc, I posit we'll see rise of new technologies to help combat these issues as well to help offset the risks as much as possible. Hardware wallets, multi-sig contracts, and now multi-party computation are promising new tools to help make the blockchain space more operationally safe, which enables the whole thing to scale.

acdha 5y ago
> Alternatively, "You really really have to give a shit about your own security". Imagine if banks had some skin in the game in terms of their security story. Why was I able to have 2 factor on my world of warcraft account many years before my bank account? It’s telling that you don’t know how wrong this is, but feel qualified to redesign a mature industry anyway. Banks are highly regulated and spend billions on security — that’s why the major breaches which are routine in the cryptocurrency world don’t have an analog in the real financial system. They know that there would be significant penalties if they lose customer resources or grant access to your account improperly, but they don’t spend it on the same things. For example, MFA doesn’t solve every problem — if I phish you or compromise your device, your cryptocurrency life savings are gone but trying to send a wire transfer from your bank for an amount that large will require out of band confirmation, especially if it’s to a random third party or out of the country. That irrecoverable failure mode is one of the core design flaws of cryptocurrency which makes it unappealing to most people. Most people do not want the risk or constant maintenance work of being their own bank, and mitigating that by reinventing the banking sector except more expensive is a tough sell.
- tata71 5y ago
  > the major breaches which are routine in the cryptocurrency world don’t have an analog in the real financial system. You're either ignorant or joking. Just because FDIC has taken care of the blunders that couldn't be sorted out internally between the banks does not mean there haven't been huge privacy and security hacks on these systems since the 90s.
  - acdha 5y ago
    > Just because FDIC has taken care of the blunders that couldn't be sorted out internally between the banks does not mean there haven't been huge privacy and security hacks on these systems since the 90s. Yes, that's the point: banks have not lost that much money because they have layers of process built around preventing large amounts from moving quickly without lots of layers of approval, things like the SWIFT hacks (which were smaller than the cryptocurrency losses even before you consider how many orders of magnitude larger the banking system is), and as a customer your risk of a permanent loss is extremely low. This is a stark contrast to what happens when cryptocurrency attacks are successful and the community says “you should have been more careful, nothing we can do”.
- mattwilsonn888 5y ago
  > That irrecoverable failure mode is one of the core design flaws of cryptocurrency No reason it has to stay that way in all cases. There are many solutions such as layered approaches, semi-custodial services, community forgiveness.
  - acdha 5y ago
    It’s designed in at the base level — that immutability is a feature for most proponents: if you don’t have it, you’ve just paid a lot more for a very slow database.
    - mattwilsonn888 5y ago
      You're operating under a binary understanding. Forks are the very obvious proof that what you say is wrong - they are a primitive way of settling disputes but a good starting point none the less. Token governance is the next step from forking that isn't so arduous. With proper governance, the community around a token can come to a consensus that a mistake led to irrecoverable funds (for example) for one user and if the amount is worth the time issue a proposal and vote on minting replacement tokens for that user. Token holders are the share holders of their protocol, no reason all the normal operations that make a business safer for users can't be implemented in token contracts. Try not to confuse the current state with what's possible.

by zer01 5y ago

acdha 5y ago

> Alternatively, "You really really have to give a shit about your own security". Imagine if banks had some skin in the game in terms of their security story. Why was I able to have 2 factor on my world of warcraft account many years before my bank account? It’s telling that you don’t know how wrong this is, but feel qualified to redesign a mature industry anyway. Banks are highly regulated and spend billions on security — that’s why the major breaches which are routine in the cryptocurrency world don’t have an analog in the real financial system. They know that there would be significant penalties if they lose customer resources or grant access to your account improperly, but they don’t spend it on the same things. For example, MFA doesn’t solve every problem — if I phish you or compromise your device, your cryptocurrency life savings are gone but trying to send a wire transfer from your bank for an amount that large will require out of band confirmation, especially if it’s to a random third party or out of the country. That irrecoverable failure mode is one of the core design flaws of cryptocurrency which makes it unappealing to most people. Most people do not want the risk or constant maintenance work of being their own bank, and mitigating that by reinventing the banking sector except more expensive is a tough sell.

tata71 5y ago
> the major breaches which are routine in the cryptocurrency world don’t have an analog in the real financial system. You're either ignorant or joking. Just because FDIC has taken care of the blunders that couldn't be sorted out internally between the banks does not mean there haven't been huge privacy and security hacks on these systems since the 90s.
- acdha 5y ago
  > Just because FDIC has taken care of the blunders that couldn't be sorted out internally between the banks does not mean there haven't been huge privacy and security hacks on these systems since the 90s. Yes, that's the point: banks have not lost that much money because they have layers of process built around preventing large amounts from moving quickly without lots of layers of approval, things like the SWIFT hacks (which were smaller than the cryptocurrency losses even before you consider how many orders of magnitude larger the banking system is), and as a customer your risk of a permanent loss is extremely low. This is a stark contrast to what happens when cryptocurrency attacks are successful and the community says “you should have been more careful, nothing we can do”.
mattwilsonn888 5y ago
> That irrecoverable failure mode is one of the core design flaws of cryptocurrency No reason it has to stay that way in all cases. There are many solutions such as layered approaches, semi-custodial services, community forgiveness.
- acdha 5y ago
  It’s designed in at the base level — that immutability is a feature for most proponents: if you don’t have it, you’ve just paid a lot more for a very slow database.
  - mattwilsonn888 5y ago
    You're operating under a binary understanding. Forks are the very obvious proof that what you say is wrong - they are a primitive way of settling disputes but a good starting point none the less. Token governance is the next step from forking that isn't so arduous. With proper governance, the community around a token can come to a consensus that a mistake led to irrecoverable funds (for example) for one user and if the amount is worth the time issue a proposal and vote on minting replacement tokens for that user. Token holders are the share holders of their protocol, no reason all the normal operations that make a business safer for users can't be implemented in token contracts. Try not to confuse the current state with what's possible.