Hard Forks
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A fundamental problem with Etherium is contracts between anonymous parties. If the other party in the DAO hack was discoverable, the hack would not have been a major problem.
Executable, rather than declarative contracts, are probably a bad idea. Putting in a virtual machine is a cop-out - it means you don't know how to solve the problem of expressing contracts formally, and are pushing it off on someone else. That someone else will probably botch it, as the DAO did. I've previously suggested that decision tables [1] would be a better basis for a contract system. This decision table tutorial [2] is something of an ad for a tool, but it uses as an example the sort of things one would want in a contract.
[1] https://en.wikipedia.org/wiki/Decision_table [2] http://reqtest.com/requirements-blog/a-guide-to-using-decisi...
Here's a contract language from 2002.[2] The author expresses various common contracts, and some not so common, in it. This is reasonably readable. If you like logic formalism, there's this.[3]
Financial companies would like to have their contracts, especially derivatives, in a form suitable for running risk analyses and various scenarios. You'd like to be able to form queries like "Suppose X misses their payments for the next quarter? What does that trigger?" Some of the 2008 financial debacle came from the inability to ask questions like that.
[1] https://www.semanticscholar.org/paper/A-Survey-of-Formal-Lan... [2] http://szabo.best.vwh.net/contractlanguage.html [3] http://www.cse.chalmers.se/~gersch/slides-talks/slides-CL-Mo...
This case was a perfect storm of:
- very bad publicity with most people's first introduction to Ethereum, the DAO, being hacked
- Ethereum core team members and miners being affected by the hack
- a large hack, monetarily speaking, in relation to the ecosystem.
- the ecosystem still in its infancy so the system is much open to even considering a hard fork option at all
I mean you can't just outlaw programming mistakes. This is going to happen again
What happens next time when the hack is smaller, say 1 million, and doesn't affect anyone on the core Ethereum team or any miners, ie it just affects regular Ethereum investors.
Does everyone vote again with the expected outcome of the miners not worrying about hte little people?
Does it not even get a vote?
Or have they set the precedent that they always roll back hacks now?
I think Ethereum has some good leadership, but I think this is something that they really need to get a policy on now.
What can be done here?
Ethereum/DAO/blockchain's main differentiator is its purported immutability. Tired of traditional actors setting the rules of your financial system? Let some "smarter" more "neutral" hackers set those rules for you in stone cold code.
Discard the DAO and start anew from first principles, but make it clear and transparent that the code is written by humans that can also change that code, and that it's not a magic immutable "distributed autonomous organization" but a collection of dudes on their computers who tinker with the rules of one big excel spreadsheet.
Different dudes than the ones who currently control the markets. Tell me why I should trust these new dudes to have enough gravitas to run a more efficient market.
Thank you for that comparison.
The whole issue is much more palpable if you forget about the magic blockchain for a second and see Ethereum as what it is: A giant complex calculation that nobody comprehends to it's full extent.
Just like most computer-programs out there. And just like the financial market.
We engineers have learned that we can't rely on complex apparatuses always behaving according to our intentions.
So the way to go is to ensure they fail gracefully.
When it comes to law, the real world did this, not by trying to find the perfect, unambiguous, immutable language for contracts and law. (Ever heard about the 'Tower of Babel'? The idea of a common language is as old as humanity).
They did it by implementing safe-guards, namely the juridicial system.
When it comes to the financial market, we too have safeguards, but not that many. There is no judge who is able to rule that an individual was not supposed to make billions of dollars by destroying the environment and evading taxes.
A humanitarian society doesn't work out by just following a set of more and more complex rules. You always need humans to interpret and adapt them.
"Fool me once shame on you. Fool me twice shame on me"
Ethereum Foundation hasn't even set some foundational beliefs like a list or principles of what it is to be expected, fungability etc. It's too fluid, and it maybe it's not their fault but rather it's due to the Turing-complete nature of EVM/Solidity that they have to deal with.
The "hack" was the scramble to figure out how to scuttle a valid transaction.
From Slock.it:
""" The terms of The DAO Creation are set forth in the smart contract code existing on the Ethereum blockchain at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413. Nothing in this explanation of terms or in any other document or communication may modify or add any additional obligations or guarantees beyond those set forth in The DAO’s code. Any and all explanatory terms or descriptions are merely offered for educational purposes and do not supercede or modify the express terms of The DAO’s code set forth on the blockchain. """
@Organization: How could you promise people to handle their money without any audits?
@Hacker: You don't get to keep the money you managed to siphon out the hands of these irresponsible people.
The question remains whether the organization contract is acknowledged by a court.
* Unless a significantly bad event happens to anyone with enough power to fork it.
The DAO was literally the "to big to fail" investment of Ethereum.
But it was executed as it was agreed to, with an explicit agreement that the agreement would be understood as written, not as intended.
[1] https://blog.slock.it/deja-vu-dao-smart-contracts-audit-resu...
Do they? I see a brilliant 22-year old in Buterin, some respectable people like Gavin Wood and a massive crowd around them that has perverse incentives. An organization that has a massive amount of money (and people who want to make money) and with that the desire to reinvent everything (think I'm kidding, go read about dapps).
Hang around a cryptocurrency forum for awhile an you get an idea of how delusional and downright scammy the vast majority of those communities are. 18 year olds from Sweden scamming people and running pump and dump schemes and then getting doxed and threatened and people investing their life savings into stupid altcoins (yes, saw both of those, as well as much more). It's like the payday loan industry, and like that industry the people at the top have no reason to clean it up. Not only are they not cleaning it up, they are encouraging it. In the r/ethereum subreddit in the early days Youtube videos comparing Buterin and Jobs were getting voted up without even a second consideration that it might be premature.
It's easy to rant against the evil of the banks and the people in power when you don't have power, but when you have power, you do the same?
Something is wrong with Ethereum and scams like this have a chance of destroying cryptocurrency from a legal standpoint before it even gets started.
Here's a nice post about schemes for fault tolerance: https://medium.com/@peterborah/we-need-fault-tolerant-smart-...
Did you read the article? The main point was to be adaptive. Asking for a predefined fixed policy is preventing the ability to adapt.
You don't know what the future will bring. That's why the community needs to make up its rules as it goes along.
File a law suit in Switzerland? If there was a significant conflict of interest, all this does not seem legal to me.
> Build unstoppable applications
> Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.
One should add at the end: "...unless the developers are heavily invested in a contract, in which case they can perform an Ethereum hard fork to take back their investment in case it goes awry. You know, conflict of interest and all that."
Because that is exactly what happened here.
What is being suggested by Ethereum is that you can try an evolution path, see it's not actually working and then rollback - it seems like a good idea at first because you can supposedly iterate fast. But I think Ethereum would lose confidence of investors either way: 1) if you hardfork, you set a precedent and now no one is sure what can be rolled back, when and for what reason 2) if you don't fork - then money is stolen. I seriously see no way out of this. It probably was a good decision to fork, because that at least allowed to save the face and the investment short-term.
All forms of automation in our world go wrong sometimes: This is why we have car repair shops and appliance repair technicians, for instance.
Saying that ethereum is only useful if the automation holds 100% of the time is like saying cars are useless if you have to occasionally take them to the shop for a tune-up. I agree that having a car that never needs a repair would be AWESOME but it would probably be unrealistic to try and build one.
That said, ethereum is still extremely good for writing immutable computer code involving financial assets, it's just that there is now some philosophical (and practical) controversy as to whether it is 100% good or just 99.9999% good (depending on whether you view the code or the community as the ultimate arbiter of "good".)
Ethereum can guarantee that the sum total of the enforcement costs will always be a few pre-paid pennies (or fraction of a penny) and not the hundreds, thousands, or tens of thousands it costs to enforce a contract in a traditional legal system- Even if the community steps in, this will be the case.
(This ignores the fact that ethereum has applications that go well beyond legal contracts)
Unfortunately, it's still too early to say whether that will happen or not.
The issue is that ethereum isn't the only option here - standard legal contracts exist, and are by far more common. The only real advantage ethereum offers is the immutability aspect - that no one can go back and argue the contract is wrong or invalid. But now, without carrying an immutability guarantee (Or you could say, now that it is clear that it never had such a guarantee), is there really much of an advantage to holding your contracts at the whim of the few controlling ethereum vs. the legal system?
If the miners lose a bunch of money due to X, and your contract happens to also be based on X, what do you expect to happen? I can't imagine that it is out of the realm of possibility for such a situation to happen.
If the rest of the community doesn't agree, then they will take they economic power away from the miners, change to a different mining/staking strategy, and leave the miners to mine an abandoned fork with a greatly decreased market cap.
A court would not see it that way. Contract law would apply to these contracts if the parties to the contract sued each other.
The legal system applies to all contracts, whether on Ethereum or not. Ethereum does not get to exist in its own reality outside of the law.
Therefore, the immutability of an Ethereum contract won't matter very much, because a judge can still invalidate part of it, or all of it, if it contains unconscionable provisions, lack of disclosure, agreement to commit criminal acts, fraud or misrepresentation, simple mistakes, or any one of the many other reasons contracts can be rendered legally unenforceable.
So, I don't see how immutability offers any advantage over standard legal contracts. It won't prevent the courts from determining that a contract is wrong or invalid.
In common-law jurisdictions, contract law pertains only to agreements which are made with the intent to contract, i.e., with the intent that the agreement should be enforced by law. In the case of agreements made without that intent, and particularly when an agreement explicitly stipulates that legal enforcement should not apply, common-law tradition says (with some major caveats) that a judge should dismiss suits related to the enforcement of the provisions of the agreement.
Further, even in the case that a so-called "smart contract" is deemed to be subject to contract law (whether because the parties made that intention clear, or because their intention was vague and a judge consequently rules that to be the case), it is reasonable to argue that the intention of the parties was to be bound by the rules of the system in which they chose to express their agreement, e.g., within a system in which it is broadly understood that "the code is the contract", and that the execution of the code according to the parameters of the execution environment at the time of the agreement should dictate the outcome of the agreement. In other words, it is perfectly plausible from a legal point of view that a judge could find that the primary intent of the parties was to be governed by the rules of the system in which they chose to execute the agreement (e.g., Ethereum under its pre-fork consensus rules), rather than ruling on their intent at the lower level of the code expressing the contract itself. Such an interpretation would go little further than the already well established legal precedents of allowing contracting parties to bind themselves to the decision of an arbiter other than a court of law, or of one court acceding to the jurisdiction of another as stipulated by the contract itself.
A judge might therefore plausibly rule in a way that enhances rather than degrades the promise of immutability in a technically enforced consensus system. That is, a judge might reasonably find that changing the rules of the game halfway though (e.g., with an unanticipated hard fork that changes the system's state or execution parameters) is contrary to the intent of the contracting parties, and that therefore the agreement should be interpreted under the rules of the status quo ante (pre-fork).
One of the basic philosophical foundations of contract law, dating to Adam Smith, is that free people should have the power to bind themselves in enforceable agreements. There are many qualifications to this idea, but it an important justification for the existence of contract law and for the way it has evolved over the centuries: the whole point is that contract law should empower parties to make agreements and to be bound by those agreements, and (within some bounds) that includes the power to decide how disputes about the terms of those agreements are adjudicated. Choosing a mechanism of enforcement de machina rather than de jure fits into this philosophical framework just fine.
Yeah, that could happen. A judge could also invalidate an Ethereum contract. But if a judge makes a ruling on an Ethereum contract, no matter what that ruling might be, that would prove that Ethereum contracts are subject to the jurisdiction of a judge in the legal system, just like other contracts, which proves my point.
If that proves your point, I suppose we might just as well say that the legal system is pointless, because physics gets a say, and what physics says goes—nevermind that the law does not purport to overrule physics.
In the same way that physics does not make law irrelevant, the law does not necessarily make the blockchain irrelevant: the law could well recognize the authority of the blockchain. Call it the compatibilist argument.
That said, I think the main idea is that no matter what a judge argues, nobody can modify the original contract in the Ethereum blockchain (That's the theory at least, as we've seen that's not the case). That's not to say something else couldn't be done, but as far as Ethereum is concerned the judge saying it is invalid means squat because that has no ramifications on the blockchain.
You raise a good point though that in the end a judge could make any number of decisions outside of Ethereum, so Ethereum only provides so much "protection". Clearly, what a judge decides means much more then "squat" because it has actual ramifications on the people involved, even if it has no ramifications on the Ethereum blockchain itself.
There are tons of bitcoin addresses that we KNOW have been used to buy/sell drugs, for example, any address that has sent or received money from a silk road address.
I am sure that these judges would LOVE to confiscate all of this money that is being used for illegal things. But they can't do shit. Because bitcoin has proven to be pretty robustly immutable.
That is one such value of immutability.
Unfortunately for ethereum, it seems to now be much more vulnerable to the attack vector of a government court order, whether that court order is from the US trying to crack down on pot purchases or donations to wikileaks, or China trying to crack down on payments to journalists that are critical of it.
In the traditional system that isn't a requirement.
I guess you could play funny business by making it functionally impossible to return the coins (lock them up for years somehow? Hand the private key to a Russian friend?) but the the court will cheerfully seize your assets that it can.
And how in the world would the courts do that? This is crytocurrencies we are talking about. The contracts I am talking about would be done anonymously between two people who have never met before, and have no chance in a million years of finding out who the other person is, or where they are. Thats the whole point!
I'm sure courts would love to confiscate all of the bitcoin donated to wikileaks or that is used to buy drugs on the internet. They've made a few high profile arrests and confiscations, but nothing on the scale of mass arrests of silk road customers, even though they would if they could.
Tumblers? Or even just transfer between crytpo currencies.
I even pulled a quote from your sources:
"Bitcoin “laundry services” do exist: Bitcoinlaundry, Bitmix, and Bitlaundry are several examples. Once you pass your money through such a service, it is much harder and almost impossible for law enforcement personnel to establish their origin."
In the Silk Road case, hundreds of thousands of bitcoins were confiscated from multiple accounts: https://en.wikipedia.org/wiki/Silk_Road_(marketplace)#Arrest...
This May, the Australian government confiscated 24,518 bitcoins from someone who sold drugs online: http://www.bbc.com/news/technology-36412487
Last August, the Italian government confiscated 11,000 bitcoin wallets, which contained more than 1 million Euros worth of bitcoins: https://cointelegraph.com/news/police-confiscate-11000-bitco...
So, the judges were able to do something about it. So much for immutability. You can't escape the legal system just because you don't let people change the blockchain ledger.
Have THOSE people been arrested? We KNOW that they used money to pay for drugs. Doesn't mean the courts can do anything about it.
Sure, there have been a few high profile arrests. That tends to happen if you start mailing thousands of drugs to people using the postal system.
And just like in the real world, if someone finds your physical wallet, they can confiscate it.
But the amazing thing is that we are sending money over the internet, and there is nothing anyone can do to stop it. No bank account freezes. And no confiscations unless they physically find you in the real world (but at that point, they can do whatever they want to you, so you've already lost.).
It seems like it'd be easy to say "hur hur I'll tell the court to piss off, move to a country with no extradition, and live it up there," but really? That's your plan? That's the advice to give to people, "use bitcoin, if you get busted just skive off to somewhere with no extradition"?
Certainly it's doable, but is that the life you want, or want to encourage others to seek?
If you are support separation between church and state, and you are living in Turkey, you are ALREADY being targeted, being arrested, and being tracked down, eventually to be executed (They are trying to bring back the death penalty. Who do you think for?).
What do you tell those people? Just stop fighting for what they believe in? Turn yourself in to the government and hope for the best?
That said, the blockchain is always going to be consistent. The catch is that a judge can still force things to be fixed in various ways - either by requiring you to return the ether, or perhaps requiring another type of currency to be given back. So in that way it doesn't really matter what the state of affairs on the Ethereum blockchain is, because you can just settle it apart from the blockchain if you really have to.
And the reality is that you could make those coins impossible for you to access, but that doesn't do you much good, and while your ether is inaccessible the judge can seize your assets and require payment through other means.
Most of the legal contracts dispute isn't about blatant black and white issue, it's about whether this interpretation or that interpretation of the same wording is the intentional one. And it's obvious that we have enough issues with just turning requirements for CRUD websites into code, there is zero chance in hell there won't be "requirement bugs" in more complicated contracts. Unless you agree with the 100% "code === law", you will get every dispute from the old legal system, plus a whole new class of dispute from those aforementioned bugs.
It does raise the question of whether all intentions of legal contract could be turned into code at all. But if that's a no then ETH is dead even before it's started.
In other words, our legal system is already 99.9999% good, it's the last remaining 0.0001% that ETH seems to try to replace. And now it seems like it doesn't want to?
Again, ethereum is a tool for automation- Once we can have contracts that can be enforced using code instead of judges, we can create contracts that can work even if we can't afford more than a few pennies for enforcement. That sounds like 90% of potential contracts to me, not the 0.0001% you claim (but neither one of us has citations to know what the real number may be)
And there is one point where I thought about but didn't want to point out since it was a slight tangent: in ETH, you need someone to write the contract, then someone to vest it still, it's not free. Contract reuse? From what we've seen of CRUD reuse, it's kind of a pipe dream. People can read and copy a TOS, do you think they will trust a "contract TOS" and using it without hiring an "expert" ?
Well, in ethereum that's true if the contracts are in dispute, as well- Anyone that disagrees with what the terms of a smart contract are are welcome to submit a transaction to the contract and they'll immediately get the "judge" of the ethereum protocol to supply them with a ruling.
As for contract vetting and code reuse: I agree those can get expensive and have their own problems.
As mentioned before, unless we agree that the implementation is the contract (immutable code is law), it will be disputed that the implementation is not what the requirements want. A meat-space judge will be involved, and anything can happen from there.
As long as I'm not buying your house, where I'd need your judge to order you out, I don't particularly care what they'd say.
Ethereum contracts do not get to exist outside of the legal system. Courts have jurisdiction over all contracts, period.
Whatever is going to happen, monoculture won't be the solution.
Specifically, Ethereum was designed with the explicit purpose of running distributed applications that commit their applicaton state into the blockchain. If this state can be subject to a rollback, in the form of forking from a block in the past -- community consensus notwithstanding -- then then you can never rely on the blockchain as storage.
Now, of course, cryptocurrencies only have value if participants believe in them; and these supposed 'smart contracts' of 'state-in-the-blockchain' work the same way. Since we lack the technological means to prevent forks, we need human stewardship to avoid them, and that's clearly not what Ethereum has done.
Important for what? Is there adaptability without mutability?
Programmers know that if you implement something with the premise of immutability then if mutability occurs the state of your application changes arbitrarily.
Mutability is good for the ones who can rely on an existing provider of centralized governance to make decisions that benefit them. For everyone else it's just plain corruption.
Ethereum pivoted from decentralized governance to centralized governance across borders. They are now solving different problems and I hope they see it.
On USV's portfolio site I just found Blockstack Labs (2014), Coinbase (2013). Are there more or recently closed ones?
Oh well, guess I'll just keep trying to build useful stuff on top of ethereum and hope the opinions change (or that this thread is not representative :-)
Why waste time if we already have what erherum will become after the fork? There is a platform already and all the people are using it. It's called lawyers and banks.
In that case, the Ethereum hard fork doesn't sound very controversial - even if the devs decided to hard fork for bad reasons later on, no one would be forced to adopt it. They would be "voting with their feet" by sticking to the old chain.
It's relatively easy to make an independent client because there's an actual spec and a test suite.
I had some ETH stored on the "old" blockchain. I bought them during all the DAO publicity, but never actually bought any part of the DAO contract.
The client, if you are un-ware, is a massive disk space hog. Because of this, I stopped running it.
Now, because of the hardfork, in order to get my value back out of the old chain and into the new one, I have to attach an external disk to my computer, and use it to store the chain.
Can I transfer out of the old and into the new chain indefinitely? I have no idea (maybe I'm just bad at google). Can I even transfer now today (once the client finishes syncing [it has been going literally all day today])? Don't know.
I get the why of the hardfork, and I'm not saying that I'm going to stop supporting ethereum, just venting a little bit.
Turns out new technology is new! And sometimes corner cases like mine haven't been accounted for!
Besides there are light clients that don't require the entire chain to be stored on disk, there are even some that run entirely in your browser like https://www.myetherwallet.com
Now if you want to interact with the hardfork opposing chain things gets a bit more difficult because it doesn't have much dev support and as far as I know there are no light clients supporting it.
The big fallacy underlying the hard fork is the idea that bugs like this will only happen this one time and so the benefit of stealing the money back and giving it to community early adopters outweighs the costs to the institutional credibility of Ethereum.
In reality, there will be many, many more bugs in smart contracts where the intent of the coder does not completely match the behavior of the smart contract in the real world.
The Ethereum community, and notably its core team who wrote the code for the hard fork while claiming to be neutral in the matter, has sent a strong message that it will meddle in the outcome of contracts in which there was no VM bug.
Human institutions are relatively vulnerable to corruption. There is all sorts of graft, favoritism, etc., throughout most human institutions. Ethereum, because of the concentration of power among early adopters, is still vulnerable to this sort of corruption. We've seen it happen with the hard fork.
Is it a big deal? Well, the invisible hand should have awarded the spoils of the theft to the talented hacker who exploited the contract. Those who lost money in the DAO are people who followed a herd mentality and did not insist that the smart contract they trusted be vetted.
Formal verification will help somewhat, as will the improvement of coding practice. I saw some code written by someone involved in the DAO that was written in a way that made it hard to understand the side-effects of various calls. I'd highlight this if doing code review for a simple e-commerce cart, and it suggests that semantic clarity and readability were ranked low on the list of priorities, favoring a denser style that is much more demanding of the reader's understanding of the subtleties of the language.
What is missing is the simple idea of insurance. Suppose investors in the DAO had been allowed to buy insurance against the DAO malfunctioning... This could have been written as a simple smart contract "future" and could have been offered by anyone. So long as there was demand for both sides of the outcome, a price would have emerged to insure one's investment.
So I think we're on a slippery slope, most notably because of the silly idea that this was the last smart contract bug that will be highly significant or controversial.
Cryptocurrencies bootstrap by appealing to speculators who don't really care about the principle of how it's supposed to work, they just want to buy it early and wait for it to get big (as many did with BTC but many more wished they had). This is fine, but we saw the same sort of greed infect a lot more people, and a hard fork (bailout) occur soon after. You can call it adaptability, you can call it a bailout, it doesn't matter. The bottom line is that at present Ethereum is still vulnerable to it and will be for a while. Let's hope Ethereum grows to the point where a small cabal of people who made a bad investment (or hold a particular political view) can't undermine the system.
I'd like to learn some of these stuffs. Where should I start? What are some stuffs happening?
If "adaptability" comes down to a popularity contest, this probably isn't a viable/stable/ethical currency.
Gold has had a long history of success and it wasn't able to undergo a hard fork. The fiat currency that we live with now has legitimacy due to the fact that you can generally expect its value tomorrow to be the same as today. Imagine a fiat currency hard-fork and what that would do to the credibility of it?
Same old debate under new disguise.
We detached this comment from https://news.ycombinator.com/item?id=12151921 and marked it off-topic.