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Comment by bpicolo | Hacker News Reader

> Ask whether the blockchain is open and public, whether the code has been published, and whether there has been an independent cybersecurity audit.

That's an entirely prescient statement that suggests the SEC has done a serious bit of homework and has put careful thought into the subject.

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Not prescient, real. There have been ICOs where the blockchain wasn't running yet. That's just a "send us your money" scam.

The vast majority are garbage regardless, and are nothing other than bad microtransaction mechanisms (even if you accept that cryptocurrency has fundamental merit, most of it is garbage). I just think it's good that they highlighted open/secure here for future contexts.

Annoyingly enough, that's not sufficient to make those ICOs scam.

The easiest counterexample would be Ethereum itself, who had a teenager as its public face, and raised large amounts of funds on top of mostly just a whitepaper, yet turned out to actually deliver all the crazy stuff they promised.

> deliver all the crazy stuff they promised.

I dunno; I'm still trying to figure out whether it's a great idea or the worst idea. I don't want to have to do a code review on my investments; at large enough scale, lawyers are way cheaper than losing money.

Lawyers perform code review on contracts. Sadly, they don't have debuggers or reference compilers, just written language definitions and consultable output collections.

> Sadly, they don't have debuggers or reference compilers, just written language definitions and consultable output collections.

Why on earth would you want this? That's tantamount to replacing the court system itself, and I definitely prefer juries and judges to compilers and debuggers.

Whoosh

... This is exactly what you are supposed to do. In the ICO world, this is part of your due diligence if you're thinking of investing / speculating.

> Ethereum .. turned out to actually deliver all the crazy stuff they promised

I'm just a bystander in all this but I distinctly remember the phrase the code is law bandied about, followed by a hard fork.

The exception proves the rule here. The only way to override the "code is law" model was to create a new coin, using the fact that a majority of miners voting for a particular new model means that becomes the new model - the creators just used their community weight to keep the old name. They most explicitly were not able to change the values in the old blockchain without the fork.

An interesting side note of that is if the majority of miners voting decided to zap the wallets of all known nazis and white supremacists, they could do that too.

It's interesting to note that existing financial institutions can do this too. And in fact they do, if they suspect you are involved in a variety of criminal activity they can freeze your accounts and alert law enforcement.

However, those institutions are subject to the rule of law, and if you are wrongly treated you can expect restitution.

From my perspective, cryptocurrencies are a sort of wild wild west at the moment where the standard appears to be: if you are wrongly treated good luck!.

The exception shows there was no rule. The "rule" was "code is law, up until 51% of the network decides it isn't". If your transactions can be wiped out by a fork leaving you on a dwindling/minority version of the transaction history, you fundamentally cannot trust the system. "We only did it once" doesn't work, either, because if they'll do it once they'll do it again, and no amount of bombast will convince me (since, after all, they made bombastic assurances before they decided to make the first exception).

Also, "the exception proves the rule" is a misinterpretation of the phrase. "Proves" here means "puts to the test", and the saying means that you can tell whether a rule holds up by seeing what happens when it is tested. Ethereum demonstrated that the rule does not hold up.

i agree with you but in ethereum's case they had several beta versions before the raise

...followed by a few alpha versions after the raise.

Have there been serious contracts without major flaws? Not just basic token contracts, which would be better served with something other than a Turing-complete half-broken language.

We were considering implementing some of our blockchain IPO and corporate governance via a smart contract, but decided to punt on it. It's flashy, it'd help us raise more money, but it just does not seem like a smart idea at the moment. We'll use a basic ERC20 contract to account for who owns shares (and pay dividends) but nothing more involved than that for now.

The fact that they've grammatically classified the noun "blockchain" correctly makes me agree. There is more than one blockchain! I don't know why the copy editors as news orgs believe otherwise. Someone smarter than, please let me know if I'm wrong!

Both the SEC and DoJ have done really remarkable jobs of keeping up with and publishing documentation related to cryptocurrencies and blockchains in general IMO. I remember thinking the same around the time the DoJ was auctioning off bitcoins seized from Silk Road - their site explaining what the auction was, what bitoins where, and why / how the auction would work suggested they really did understand what they were dealing with and was extremely clear technical writing.

The IRS has kept up on it too. My mother (a CPA) is aware of bitcoin through that.

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