6 ms·

Yes, it would be theft because the usage was clearly outside of the intended use of the system. This sort of thing has been tested in the courts before and like

Yes, it would be theft because the usage was clearly outside of the intended use of the system. This sort of thing has been tested in the courts before and likely falls under the realm of any bug exploit. For another example, let’s say you were an employee of a retailer with the power to set a discount on certain items. You suddenly set a 100% discount on every item in the store and then buy all the inventory for $0. Try explaining to the police that you were actually fully within your legal right to do that.

colinmhayes 4y ago
But isn’t code law? I thought the intended usage was to faithfully execute the contract.
- charcircuit 4y ago
  The same could be said about other vulnerabilities like mysql injections. The difference in this case is that there was a government proposal that was legitimately passed, but it was unpopular with the community as votes are not 1 per person but rather based off how much you have financially invented into buying voting rights. In real life this would be the equivalent of buying enough shares of a company to make unpopular changes. Hostile takeovers aren't illegal AFAIK.
  - ALittleLight 4y ago
    If someone had a website that said "My server's code is law. You can do whatever it lets you do." And you found an sql injection vulnerability I would think you'd be allowed to mess with it.
IgorPartola 4y ago
Which analogous cases are you talking about specifically? And as much as your example would likely result in some kind of conversation with the police, it also highly depends on whether you discounted items fraudulently or if you did it because you specifically were in the position to do so. Your example describes it as though you had full legitimate power to discount certain items up to 100% off. At that point, at worst you would have violated company policy and not the law. You might get fired for it but when a retailer you work for offers a discount you are eligible to participate in it.
mtnGoat 4y ago
Code is law in crypto. You can’t hate the law/regulation then call it in when you need it. Also I don’t think your retailer comparison works, in this case the power to give the user the rights and ability to create 100% discounts was designed into the system and although the outcome is unintended, it is not a flaw because the system allowed it and everyone using the system was allowed to audit it before putting value in.
- willbw 4y ago
  >You can’t hate the law/regulation then call it in when you need it. Why not?
  - cowtools 4y ago
    When you use or own a cryptocurrency, some of your wealth is transferred to miners in exchange for securing the network (block reward, fees -> mining, development). When you use or own a fiat currency, some of your wealth is transferred to governments in exchange for securing the economy (inflation, fees -> regulation, protection). I think it is generally unfair to make the taxpayer to front the bill of the government protecting cryptocurrency institutions (via the justice system), especially when the cryptocurrency networks are supposed to be trustless and self-securing. That's basically a net transfer of wealth from the public to a special interest group of cryptocurrency users, and furthermore a rival financial system.
  - mtnGoat 4y ago
    No real reason why not, aside from hypocrisy. It’s just “the code” of lawlessness, if you live outside the law you gotta stay that way.
- jvanderbot 4y ago
  > Code is law in crypto The courts have not really tested that, have they? I figure HN would alert me if they had. A wounded party will claim an exploit. Most bugs / security flaws are, in fact, code that is working perfectly as written, but not as intended.
charcircuit 4y ago
The intended usage in my opinion is up to the governance to decide. They can vote on things related to how things should work. The project can be taken any way the governance decides and if the governance decides that it wants to send all of the funds to a single person I don't see how that is outside the indented usage. The exact same action could benefit all the users in case the smart contract had a vulnerability and he wanted to save everyone else's funds from being stolen. In regards to your example if the employee truly does have the power to do that and the intention for that power is not stated. I think it's fine for them to take actions which cause the store to lose money. Edit: As a sibling comment mentioned it's more like if a owner of the business decided to add these discounts.
- kryptiskt 4y ago
  A majority shareholder in a company isn't allowed to take all the assets even though they have the votes. The minority does have rights. Like, this is what the eternally misunderstood fiduciary duty is about: the company isn't your personal piggie bank just because you're at the wheel.
  - charcircuit 4y ago
    I think that's where the metaphor breaks down. A company is intended to make profit where a protocol's purpose is whatever the owners want it to be.
vmception 4y ago
> For another example, let’s say you were an employee of a retailer with the power to set a discount on certain items. You suddenly set a 100% discount on every item in the store and then buy all the inventory for $0. Try explaining to the police that you were actually fully within your legal right to do that. But if you were the board, or the majority shareholder, it would be fine. Which is what happened here. They borrowed money, bought a majority of the BEAN, used that BEAN to vote on their proposal to take all the money, and it passed. They kept the money, sold the BEAN, and returned the borrowed money.
- ac29 4y ago
  > But if you were the board, or the majority shareholder, it would be fine. Which is what happened here. I am fairly sure a majority shareholder could not just vote to give themselves all of a companies assets.
  - vmception 4y ago
    You wouldn’t want to be an investor in one that did or looked like it was doing that But yes there are other deterrents like not optimizing share price or returns for the other shareholders, by laws, state laws, rules from the exchange you trade on and mayyybe a regulator
    - cinquemb 4y ago
      When i heard beanstalk was exploited, i was thinking this was some like some instant leveraged buy out, like in tradi where a investment fund borrows a bunch of money (with the other companies assets as collateral), buys a company and sells there most profitable assets while the company lingers own death door for years (with some kind inflated asset valuation with the rest of their collateral leftover) before bankruptcy. Just much faster in crypto because they allowed for their governance to be vulnerable to flashloans.
      - vmception 4y ago
        Yes like that
FatalLogic 4y ago
>let’s say you were an employee of a retailer with the power to set a discount on certain items ... No, not the employee, but the owner. Isn't that a more accurate metaphor for this situation?

colinmhayes 4y ago

But isn’t code law? I thought the intended usage was to faithfully execute the contract.

charcircuit 4y ago
The same could be said about other vulnerabilities like mysql injections. The difference in this case is that there was a government proposal that was legitimately passed, but it was unpopular with the community as votes are not 1 per person but rather based off how much you have financially invented into buying voting rights. In real life this would be the equivalent of buying enough shares of a company to make unpopular changes. Hostile takeovers aren't illegal AFAIK.
- ALittleLight 4y ago
  If someone had a website that said "My server's code is law. You can do whatever it lets you do." And you found an sql injection vulnerability I would think you'd be allowed to mess with it.

IgorPartola 4y ago

Which analogous cases are you talking about specifically? And as much as your example would likely result in some kind of conversation with the police, it also highly depends on whether you discounted items fraudulently or if you did it because you specifically were in the position to do so. Your example describes it as though you had full legitimate power to discount certain items up to 100% off. At that point, at worst you would have violated company policy and not the law. You might get fired for it but when a retailer you work for offers a discount you are eligible to participate in it.

mtnGoat 4y ago

Code is law in crypto. You can’t hate the law/regulation then call it in when you need it. Also I don’t think your retailer comparison works, in this case the power to give the user the rights and ability to create 100% discounts was designed into the system and although the outcome is unintended, it is not a flaw because the system allowed it and everyone using the system was allowed to audit it before putting value in.

willbw 4y ago
>You can’t hate the law/regulation then call it in when you need it. Why not?
- cowtools 4y ago
  When you use or own a cryptocurrency, some of your wealth is transferred to miners in exchange for securing the network (block reward, fees -> mining, development). When you use or own a fiat currency, some of your wealth is transferred to governments in exchange for securing the economy (inflation, fees -> regulation, protection). I think it is generally unfair to make the taxpayer to front the bill of the government protecting cryptocurrency institutions (via the justice system), especially when the cryptocurrency networks are supposed to be trustless and self-securing. That's basically a net transfer of wealth from the public to a special interest group of cryptocurrency users, and furthermore a rival financial system.
- mtnGoat 4y ago
  No real reason why not, aside from hypocrisy. It’s just “the code” of lawlessness, if you live outside the law you gotta stay that way.
jvanderbot 4y ago
> Code is law in crypto The courts have not really tested that, have they? I figure HN would alert me if they had. A wounded party will claim an exploit. Most bugs / security flaws are, in fact, code that is working perfectly as written, but not as intended.

charcircuit 4y ago

The intended usage in my opinion is up to the governance to decide. They can vote on things related to how things should work. The project can be taken any way the governance decides and if the governance decides that it wants to send all of the funds to a single person I don't see how that is outside the indented usage. The exact same action could benefit all the users in case the smart contract had a vulnerability and he wanted to save everyone else's funds from being stolen. In regards to your example if the employee truly does have the power to do that and the intention for that power is not stated. I think it's fine for them to take actions which cause the store to lose money. Edit: As a sibling comment mentioned it's more like if a owner of the business decided to add these discounts.

kryptiskt 4y ago
A majority shareholder in a company isn't allowed to take all the assets even though they have the votes. The minority does have rights. Like, this is what the eternally misunderstood fiduciary duty is about: the company isn't your personal piggie bank just because you're at the wheel.
- charcircuit 4y ago
  I think that's where the metaphor breaks down. A company is intended to make profit where a protocol's purpose is whatever the owners want it to be.

vmception 4y ago

> For another example, let’s say you were an employee of a retailer with the power to set a discount on certain items. You suddenly set a 100% discount on every item in the store and then buy all the inventory for $0. Try explaining to the police that you were actually fully within your legal right to do that. But if you were the board, or the majority shareholder, it would be fine. Which is what happened here. They borrowed money, bought a majority of the BEAN, used that BEAN to vote on their proposal to take all the money, and it passed. They kept the money, sold the BEAN, and returned the borrowed money.

ac29 4y ago
> But if you were the board, or the majority shareholder, it would be fine. Which is what happened here. I am fairly sure a majority shareholder could not just vote to give themselves all of a companies assets.
- vmception 4y ago
  You wouldn’t want to be an investor in one that did or looked like it was doing that But yes there are other deterrents like not optimizing share price or returns for the other shareholders, by laws, state laws, rules from the exchange you trade on and mayyybe a regulator
  - cinquemb 4y ago
    When i heard beanstalk was exploited, i was thinking this was some like some instant leveraged buy out, like in tradi where a investment fund borrows a bunch of money (with the other companies assets as collateral), buys a company and sells there most profitable assets while the company lingers own death door for years (with some kind inflated asset valuation with the rest of their collateral leftover) before bankruptcy. Just much faster in crypto because they allowed for their governance to be vulnerable to flashloans.
    - vmception 4y ago
      Yes like that

FatalLogic 4y ago

>let’s say you were an employee of a retailer with the power to set a discount on certain items ... No, not the employee, but the owner. Isn't that a more accurate metaphor for this situation?