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When you willingly take financial action with a smart contract, you are agreeing to the smart contract. The smart contract is code. While code is not “law” lite

When you willingly take financial action with a smart contract, you are agreeing to the smart contract. The smart contract is code. While code is not “law” literally, in this case it is the lawful contract definition. How else can you possibly interpret this?

deleted 4y ago
[deleted]
jeroenhd 4y ago
A "smart contract" is merely a program. Manipulating a program or abusing it for your personal gains at the expense of others is often illegal. If you're not into the cryptocurrency mess, this reads like regular old hacking. "If code is law and your code allows me to execute arbitrary SQL queries, then this SQL injection is perfectly legal" doesn't hold up in court. The FBI will not let you go because technically you only asked the remote server to execute your request. It does invalidate the "code is law" concept, but in the real world, code isn't law.
- logifail 4y ago
  > Manipulating a program or abusing it for your personal gains at the expense of others is often illegal "Manipulating" doesn't seem like the right word here. This is more like a billionaire buying up a popular social media platform and then once he owns the majority of it, deciding how it should operate.
  - cma 4y ago
    It would be buyung up majoruty, then voting to transfer all assets to self. In non-crypto world there are minority shareholder protections that cover even someone with a 1% stake against the other at 99%.
  - _aavaa_ 4y ago
    This feels more like embezzlement
    - bilbo0s 4y ago
      Not even embezzlement. Everyone put skin in the game only on the condition that the stipulations laid out in the contracts were followed. One of the stipulations was that people with more money get the most say on what to do with all the money. This was an explicit stipulation, and I can't for the life of me understand why anyone would agree to put in their resources in under such conditions, but they did. Looking at the Terms and Conditions as well as the contract, this goes under "A fool and her money". There was no embezzlement at all, this contract literally said people with more money can potentially vote to take all the money. Which is madness, but people agreed to it.
  - lokar 4y ago
    With a written contract actions allowed in the contract can still be considered as fraud. Making the contract a program does not change that.
  - vkou 4y ago
    No, this is more like someone buying up 51% of the voting shares of a public company, and then using his voting power to transfer all of the company's assets into a shell corporation that he controls, screwing the minority shareholders. Which is illegal, and will get you sued if you try it.
    - deleted 4y ago
      [deleted]
    - kybernetikos 4y ago
      Isn't that because management of a company are required to act in the interests of all share holders? It seems like this kind of structure needs similar safeguards but I doubt that it actually does in any relevant jurisdictions at the moment.
- oneoff786 4y ago
  Yeah but this case doesn’t involve any malicious code vulnerabilities. Code is not law, but this “attack” isn’t abusing the code so much as the basic premise of what the code is designed to do. This is the intended agreement
- teawrecks 4y ago
  > Manipulating a program or abusing it for your personal gains at the expense of others is often illegal. Here's the challenge, though: it is impossible to definitively say whether the functionality of a program is intended behavior or not. For a classical server that gets "hacked", the code is running on a server that someone owns and access to that server is defined by the owner. Similarly, the maintainer of the code decides whether the behavior of the code was intentional or not. On a blockchain, there is no single server, the code is being executed on many machines. And you can't trust any individual, the author of the contract got their chance to clearly describe the intention of the code when they wrote it. There is literally no way to determine whether the contract was used as intended, or exploited. You can't go ask the author because they can just lie. The code is all you have. But that doesn't mean "code is law". Consensus is law. The blockchain can be forked, the transaction reversed, and the contract amended. > in the real world, code isn't law. That hardly matters here.
  - NovemberWhiskey 4y ago
    >Consensus is law No; the law is the law. What exactly do you intend the content of the statement 'consensus is law' to be? The world 'law' has a meaning, and it's distinct from the meaning of 'consensus'. The whole idea that you'll replace the existing legal structures with some consensus of transaction miners is some apocalyptic nerdvana with no basis in the real world.
mypastself 4y ago
If a payment gateway’s API accidentally exposes a vulnerability that can be exploited without obtaining any credentials illicitly, does the same thing apply? Under your proposed definition, the vulnerability is “legal” to execute until it’s patched.
- postalrat 4y ago
  No, the same doesn't apply because the payment gateway probably has terms of service and specific laws protecting it. It's protected by those laws. Cryptocurrencies claim to be something else. Something that isn't government by terms of service, laws, etc. How else could you create a worldwide decentralized currency without adopting a rule that code is law.
  - exdsq 4y ago
    Plus how do local laws even have a chance against a global decentralized system - which country gets jurisdiction, etc
  - mypastself 4y ago
    I think we’re actually in agreement here, then: a program deployed on a decentralized network has too many shortcomings to be used in lieu of a legal system, and also, its exploited vulnerabilities can’t be subject to existing laws. My main objection is calling it law: if you’re scammed while purchasing illicit substances on a darknet marketplace, you have no legal recourse, but the marketplace’s rules can’t be called “law”, either.
dragonwriter 4y ago
> While code is not “law” literally, in this case it is the lawful contract definition. No, it's not. At best, there is some kind of implied-in-fact legal contract related to to the code in the “smart contract”. “Code is law” is an aspirational slogan repeated by people who fetishize the former and oppose the latter, usually without understanding it (or either.)
NovemberWhiskey 4y ago
>While code is not “law” literally, in this case it is the lawful contract definition. How else can you possibly interpret this? You can have a contract that both parties thinks says one thing, but they each have something different in mind. That's a failure of mutual assent. You can have contracts where the thing which is contracted on becomes impossible. One party can misrepresent the contract, either deliberately or innocently. The contract can be agreed to under duress; or be so uneven in its obligations that is manifestly unconscionable. To a greater or lesser extent, all these scenarios can give rise to rescission of contracts or their avoidance in courts of law. The idea that code is an unambiguous statement of the contract and therefore definitively legal and perfectly binding is nonsense.
- teawrecks 4y ago
  You're talking about dumb contracts and off-chain legislative systems of a random country. That's not what we're talking about. The question isn't, "once we get these people in a room, how do we (as a legislative body) decide who owns what and compel the parties into cooperating?" The question is, "these parties are assumed to retain perfect anonymity, and they operated according to the design of the consensus-based system that we (as miners) agree to; are we ok with the outcome? Should we come to a consensus on an adjustment to the design?" Smart contracts are unambiguous by definition. What you're describing is PEBKAC at best.
  - NovemberWhiskey 4y ago
    How is it good public policy for contracts executed at gunpoint (for example, considering the duress case) to be considered good? Such contracts are not, to my knowledge, consider valid anywhere in the world and for obvious reason and need to be undone. It doesn't matter whether the contract is unambiguously written if you sign it with a gun in your mouth. There's no way to do this in code. You need a judicial system to make determinations on them based on facts. There is no "adjustment to the design" other than incorporating some kind of arbitrary undoing capability into smart contracts that defers to a legal oracle that consumes decisions of courts and applies them into the chain.
  - 4y ago

deleted 4y ago

[deleted]

jeroenhd 4y ago

A "smart contract" is merely a program. Manipulating a program or abusing it for your personal gains at the expense of others is often illegal. If you're not into the cryptocurrency mess, this reads like regular old hacking. "If code is law and your code allows me to execute arbitrary SQL queries, then this SQL injection is perfectly legal" doesn't hold up in court. The FBI will not let you go because technically you only asked the remote server to execute your request. It does invalidate the "code is law" concept, but in the real world, code isn't law.

logifail 4y ago
> Manipulating a program or abusing it for your personal gains at the expense of others is often illegal "Manipulating" doesn't seem like the right word here. This is more like a billionaire buying up a popular social media platform and then once he owns the majority of it, deciding how it should operate.
- cma 4y ago
  It would be buyung up majoruty, then voting to transfer all assets to self. In non-crypto world there are minority shareholder protections that cover even someone with a 1% stake against the other at 99%.
- _aavaa_ 4y ago
  This feels more like embezzlement
  - bilbo0s 4y ago
    Not even embezzlement. Everyone put skin in the game only on the condition that the stipulations laid out in the contracts were followed. One of the stipulations was that people with more money get the most say on what to do with all the money. This was an explicit stipulation, and I can't for the life of me understand why anyone would agree to put in their resources in under such conditions, but they did. Looking at the Terms and Conditions as well as the contract, this goes under "A fool and her money". There was no embezzlement at all, this contract literally said people with more money can potentially vote to take all the money. Which is madness, but people agreed to it.
- lokar 4y ago
  With a written contract actions allowed in the contract can still be considered as fraud. Making the contract a program does not change that.
- vkou 4y ago
  No, this is more like someone buying up 51% of the voting shares of a public company, and then using his voting power to transfer all of the company's assets into a shell corporation that he controls, screwing the minority shareholders. Which is illegal, and will get you sued if you try it.
  - deleted 4y ago
    [deleted]
  - kybernetikos 4y ago
    Isn't that because management of a company are required to act in the interests of all share holders? It seems like this kind of structure needs similar safeguards but I doubt that it actually does in any relevant jurisdictions at the moment.
oneoff786 4y ago
Yeah but this case doesn’t involve any malicious code vulnerabilities. Code is not law, but this “attack” isn’t abusing the code so much as the basic premise of what the code is designed to do. This is the intended agreement
teawrecks 4y ago
> Manipulating a program or abusing it for your personal gains at the expense of others is often illegal. Here's the challenge, though: it is impossible to definitively say whether the functionality of a program is intended behavior or not. For a classical server that gets "hacked", the code is running on a server that someone owns and access to that server is defined by the owner. Similarly, the maintainer of the code decides whether the behavior of the code was intentional or not. On a blockchain, there is no single server, the code is being executed on many machines. And you can't trust any individual, the author of the contract got their chance to clearly describe the intention of the code when they wrote it. There is literally no way to determine whether the contract was used as intended, or exploited. You can't go ask the author because they can just lie. The code is all you have. But that doesn't mean "code is law". Consensus is law. The blockchain can be forked, the transaction reversed, and the contract amended. > in the real world, code isn't law. That hardly matters here.
- NovemberWhiskey 4y ago
  >Consensus is law No; the law is the law. What exactly do you intend the content of the statement 'consensus is law' to be? The world 'law' has a meaning, and it's distinct from the meaning of 'consensus'. The whole idea that you'll replace the existing legal structures with some consensus of transaction miners is some apocalyptic nerdvana with no basis in the real world.

mypastself 4y ago

If a payment gateway’s API accidentally exposes a vulnerability that can be exploited without obtaining any credentials illicitly, does the same thing apply? Under your proposed definition, the vulnerability is “legal” to execute until it’s patched.

postalrat 4y ago
No, the same doesn't apply because the payment gateway probably has terms of service and specific laws protecting it. It's protected by those laws. Cryptocurrencies claim to be something else. Something that isn't government by terms of service, laws, etc. How else could you create a worldwide decentralized currency without adopting a rule that code is law.
- exdsq 4y ago
  Plus how do local laws even have a chance against a global decentralized system - which country gets jurisdiction, etc
- mypastself 4y ago
  I think we’re actually in agreement here, then: a program deployed on a decentralized network has too many shortcomings to be used in lieu of a legal system, and also, its exploited vulnerabilities can’t be subject to existing laws. My main objection is calling it law: if you’re scammed while purchasing illicit substances on a darknet marketplace, you have no legal recourse, but the marketplace’s rules can’t be called “law”, either.

dragonwriter 4y ago

> While code is not “law” literally, in this case it is the lawful contract definition. No, it's not. At best, there is some kind of implied-in-fact legal contract related to to the code in the “smart contract”. “Code is law” is an aspirational slogan repeated by people who fetishize the former and oppose the latter, usually without understanding it (or either.)

NovemberWhiskey 4y ago

>While code is not “law” literally, in this case it is the lawful contract definition. How else can you possibly interpret this? You can have a contract that both parties thinks says one thing, but they each have something different in mind. That's a failure of mutual assent. You can have contracts where the thing which is contracted on becomes impossible. One party can misrepresent the contract, either deliberately or innocently. The contract can be agreed to under duress; or be so uneven in its obligations that is manifestly unconscionable. To a greater or lesser extent, all these scenarios can give rise to rescission of contracts or their avoidance in courts of law. The idea that code is an unambiguous statement of the contract and therefore definitively legal and perfectly binding is nonsense.

teawrecks 4y ago
You're talking about dumb contracts and off-chain legislative systems of a random country. That's not what we're talking about. The question isn't, "once we get these people in a room, how do we (as a legislative body) decide who owns what and compel the parties into cooperating?" The question is, "these parties are assumed to retain perfect anonymity, and they operated according to the design of the consensus-based system that we (as miners) agree to; are we ok with the outcome? Should we come to a consensus on an adjustment to the design?" Smart contracts are unambiguous by definition. What you're describing is PEBKAC at best.
- NovemberWhiskey 4y ago
  How is it good public policy for contracts executed at gunpoint (for example, considering the duress case) to be considered good? Such contracts are not, to my knowledge, consider valid anywhere in the world and for obvious reason and need to be undone. It doesn't matter whether the contract is unambiguously written if you sign it with a gun in your mouth. There's no way to do this in code. You need a judicial system to make determinations on them based on facts. There is no "adjustment to the design" other than incorporating some kind of arbitrary undoing capability into smart contracts that defers to a legal oracle that consumes decisions of courts and applies them into the chain.
- 4y ago