Hacker News Reader

Comment by trothamel | Hacker News Reader

One nice thing about SEC-regulated markets - unlike the various cryptocurrency markets - is that it's possible for trades to be rolled back if they are "clearly erroneous". That isn't perfect - if the data is only a little off, it might not be possible to get a trade rolled back - but it tends to limit how much havoc is called.

https://www.sec.gov/news/press/2009/2009-215.htm

(My understanding is that trades can also be rolled back in the case of security breaches, at least at the exchange and broker levels.)

View on HN

Not second order effects. Like if I have a stock affected in my portfolio, my broker may close a position to reduce my leverage or execute a stop loss order. They can't sell that stock because the US is closed, so they will sell the other positions outside of the US, which are unaffected by this bug.

These transactions have been induced by an error but are not clearly erroneous and will not be cancelled.

It happened in 2014 when the NYSE did a similar fuckup. Their reaction was "who cares, US markets are closed". There was a lot of livid comments from canadian investors on forums.

Cryptocurrency trading usually happens on an exchange and the exchange almost certainly won't make any on chain transactions every single time a trade occurs, they will just swap the balances around inside their own internal systems. The on chain transactions will only happen when a user withdraws their currancy from the exchange. So trades certainly can be very easily rolled back by exchanges up until the point that one party withdraws from the exchange.

And during major instability and crashes it's not unusual to hear that the exchanges disabled withdrawals temporarily. I assume this is at leaat partly until they have chance to asses if any action is necessary.

The flip side of this is that no providers of pricing data are expected to stand behind their prices. It's basically arbitrary and at the whim of some people who very easily may not care about your situation.

It's not a property of a regulated market, it's a property of a specific centralized system. Nothing prevents SEC from "regulating" a system where such rollback is impossible, and nothing prevents centralized cryptocurrency exchanges from rolling back transactions that haven't made it into blockchain. There can even be non-immutable blockchains, which rollback mistakes, such as Ethereum.

Does that SEC possibility apply to Google Finance stock data? It's not like they're a proper broker or official provider if data (i.e. most of the affected financial sites have ample "price inaccuacy" disclosures).

I don't think the OP was trying to say it applies here, just that IF there had been some kind of hack or security problem, then the SEC has some tools for dealing with it.

In this case, if it was only the data going to out to third party stock tickers, then it probably doesn't apply. Services like Google and Yahoo finance make it really clear on their sites that the data isn't necessarily accurate, can be delayed, and isn't for trading purposes, so nobody should have been making trading decisions based solely on this data anyway.

Why can't majority participants in a crypto currency agree to roll back?

Anyone could roll forward all the transactions again, so you need to do more than just roll back. You need to declare the transactions invalid somehow.

And unless every participant is in on it, you will end up with two cryptocurrencies afterwards. Holdings won't match on both chains. Find an exchange that is not running the same chain as you and spend a transaction that is valid on his chain but not the other, and by transferring out other cryptos you could empty their wallet.

The majority of participants do not in a crypto-currency.

Only the majority of the hashing power.

If a majority of participants rejected blocks that were on a chain that did not rollback the erroneous transaction, then the hash power would be forced to follow.

I believe the term for who decides is the "economic majority".

Hashing power can not roll back transactions. Hashing power alone can not change rules embedded in the software.

Proof of work is used to order transactions in the global ledger to avoid the double spending problem.

They did in Ethereum after the DAO got hacked.

Reply on news.ycombinator.com