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> I think Ethereum has some good leadership, but I think this is something that they really need to get a policy on now.

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.

Nothing.

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.

> who tinker with the rules of one big excel spreadsheet

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.

There was no hack. The contact executed as designed.

The "hack" was the scramble to figure out how to scuttle a valid transaction.

It certainly did not execute as intended.

It certainly did. The code was the terms of the contract.

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. """

I think the "hacker" is going to have a massive fraud lawsuit on their hands against the DAO. Combine that with bad faith arguments for punitive damages and they can probably wipe out the entire organization.

I think a real world judge would not need to take into account how smart contracts work at all (a contract without a hand-written signature???) and blame both sides:

@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.

"hacker": My transaction was valid and executed per the organization contract. Others then conspired to invalidate the transaction. Now, my transaction is dead.

"hacker", yes, I forgot the quotes.

The question remains whether the organization contract is acknowledged by a court.

This is my concern. There will forever be a giant asretisk after all crytocurrency rules now.

* Unless a significantly bad event happens to anyone with enough power to fork it.

As someone theoretically interested in investing in things governed by Ethereum "smart" contracts, what the rules of how the contracts are executed? Obviously it is no longer just computer code that rules. There is some, to my mind, ad hoc process involving politics. Sorry, but my money is not touching that system. No thank you.

The DAO was literally the "to big to fail" investment of Ethereum.

Not as anticipated, and, pretty much not as intended by those writing it,

But it was executed as it was agreed to, with an explicit agreement that the agreement would be understood as written, not as intended.

The DAO code was reviewed [1] by the best security audit company in the world [0] and was/is made from irrefutable computer code [0].

[0] https://slock.it/dao.html

[1] https://blog.slock.it/deja-vu-dao-smart-contracts-audit-resu...

I think the DAO experience was just one step towards adulthood. We are being very parsimonious thinking that a software application can't be changed as if it was governed by god. In this case it was pure negligence from the Slock and Ethereum people, but this is what happens when babies learn to walk. Probably the next time there will not be a bailout. If you don't like these rules you can move to another cryptocurrency and Ethereum pricing includes this kind of potential events.

"Fool me once shame on you. Fool me twice shame on me"

Vitalik himself said that it is possible this may be needed and done again in the future, so it could very well be "fool me twice shame on you, fool n-ice shame on you".

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.

I think one of the important things is that people have learned the need for backups in smart contracts. There will always be bugs, but if people build in failsafes to catch them then situations like the DAO draining can be avoided.

Here's a nice post about schemes for fault tolerance: https://medium.com/@peterborah/we-need-fault-tolerant-smart-...

Well, these are difficult questions, but I kind of like Vlad Zanfir's recent comments on this issue which is that it's best for everyone if the "out of the ordinary" nature of hard forks is maintained as much as possible: If there is a pre-established policy on how to handle these situations it could backfire in many ways- It may be better to just require the merit of any hard fork to be considered on a case-by-case basis.

> but I think this is something that they really need to get a policy on now.

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.

"... Ther are no rules except what groups of peple have agreed to enforce. This should not be surprising. If this is,well, welcome to the world..." Twitter : Emin Gun Sirer 2012 - 07 - 22

> What can be done here?

File a law suit in Switzerland? If there was a significant conflict of interest, all this does not seem legal to me.