Did I just lose half a million dollars?
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He sent ETH to the WETH contract, received WETH as expected.
Then he wanted to do the reverse and sent WETH, but will not receive anything, because you're supposed to swap your WETH to ETH in exchanges like Uniswap, or call the "withdraw" function in the contract.
For contracts that want to only work with ERC-20 tokens, you use WETH, which comes from a contract that takes 1 eth and gives you 1 WETH.
A known problem with ERC-20 tokens is that transferring them to a contract that isn't made to access them is equivalent to burning them. You should almost never transfer ERC-20 to a smart contract. You instead use approve to give the smart contract permission to withdraw, then call the function you want to receive and tell it to make the withdraw (the contract will internally call transferFrom).
"Gas" is one of those concepts where I have to relearn what it is every time I read about it but never can retain it for very long. (See also Big O notation.)
Say what you will about the primitiveness of Bitcoin and other early coins but at least they're quite a bit more comprehensible.
Isn‘t that just the fee for transfering cryptocoins from one wallet to another?
And you can decide on how much it is for your transfers, but if it‘s too low, your transfer will take a long time, up to „infinity/never“.
With 500k$ this smart contract will be able to run for a while.
if your gas doesnt cover the runtime of the contract, the process rolls back all transactions and eats the fee. so you have to overshoot and get refunded the difference.
always seemed like a nonstarter to me, that the computer cant tell me how much gas it needs (see: halting problem)
Also at least with european banking, if you wringly send money to another account, it is also gone forever. A lot of scams regarding old people build up on this. We do not need to buy google play store vouchers like the americans tonget scammed.
Not true. The money is still legally yours if you can prove that it's a mistake or you were deceived, and can be recovered via the legal system if the recipient does not refund it voluntarily. Scammers just move the money away via other, less traceable channels before that can happen.
As you say, scammers move money quickly, and they do so to avoid the money being refunded.
Aren't European bank accounts tied to real world identities?
It's not though? The money is still legally yours and can be recovered via the legal system. Only if it is moved out of Europe into less well regulated areas it becomes a problem.
This happens in every case though. If I give you cash and you take it to god knows where it can't be recovered either. If I give you money and let you leave with it then there is only so much any system can do.
Or am I wrongly informed? Because that's the knowledge I have from central european laws.
> Wer durch die Leistung eines anderen oder in sonstiger Weise auf dessen Kosten etwas ohne rechtlichen Grund erlangt, ist ihm zur Herausgabe verpflichtet. Diese Verpflichtung besteht auch dann, wenn der rechtliche Grund später wegfällt oder der mit einer Leistung nach dem Inhalt des Rechtsgeschäfts bezweckte Erfolg nicht eintritt.
> A person who obtains something as a result of the performance of another person or otherwise at his expense without legal grounds for doing so is under a duty to make restitution to him. This duty also exists if the legal grounds later lapse or if the result intended to be achieved by those efforts in accordance with the contents of the legal transaction does not occur.
Basically there is law that says for every money send should be a cause, reason that justifies sending. If there is no such reason, reciever is entitled to send them back.
Heh, funny you say that, because there was the submission about the danger of the 30-year fixed mortgage, and how the typical borrower is in fact, making an effective bet on interest rate derivatives!
See this thread that quotes that part: https://news.ycombinator.com/item?id=29774806
You can even retrospectively apply reasonable person type arguments no?
> You can even retrospectively apply reasonable person type arguments no?
Yeah. A significant part of a traditional contract revolves around defining the entities and behaviors you're actually talking about, and another part is about specifying requirements and boundaries for these entities and behaviors. However, it is entirely possible that during a conflict, the parties of the contract disagree about the meanings of the words on paper.
In such a case, you'd bring in a judge by bringing this to court, and a judge has the right to interpret the words and act in the spirit of the contract clauses, not just the words, and to deliberate about the feasibility of clauses. And that's a good thing, because this is a strong defense against scam and fraud.
Like, if something really strongly looks like a contract to buy a car, but technically doesn't say you buy the car, but also doesn't say you don't buy the car. If you get sued for not paying rent or stealing the car in such a case, you could argue you thought you owned it.
That's another, huge, topic.
Smart contracts are code and there is no fallback mechanism in case of mistakes.
They probably have to be way more complicated than non-smart contracts?
The equivalent in code is pre-existing libraries, and miles of them. But the law has highly developed ways of ridding itself of cruft and tech debt over time, in a way that lib dependencies really don't.
The key factor is: human judgment
Well, there is, but it's hard to pull off -- you can get the entire network to hard-fork to reverse it, like in the DAO hack response.
https://www.cryptocompare.com/coins/guides/the-dao-the-hack-...
Surely, that problem will just scale with time, adoption and law suits.
This is all such an unbelievable waste of intellectual resources to re-invent the wheel
Maybe a bit like enterprise software, just add another abstraction layer...
This kind of fuckup could not happen with regular banking and if you somehow did mess up you can almost always have your money recovered. There is no way to just black hole it never to be seen again.
If it bothers you, you could probably also go through some service that insures your transactions and gives you a degree of reversibility.
The classic is for a trade, and the receiver has to confirm they received the stuff before the money is released.
Afaik "traditional" companies like ebay also struggle with that kind of thing.
That part we kind of figured out, maybe it's ok, albeit super slow and power intensive, but let's put that aside for a while.
But is there a solid mathematical and cryptographical basis for everything else layered on top? I don't get that impression, it just looks like they're just plugging gaping holes because there's a gold rush to be continued!
If they're just rebuilding a crappier version of the global financial system, there's no point in the rest of us following them.
Just to say, it really doesn't make sense to judge "crypto" by the state of Ethereum. There are different philosophies, different approaches, different people.
Maybe they'll find solutions. Cool, let them put those solutions in practice in 2040 when all the bugs have been worked out.
It was never a solution in search of a problem.
In 1999 the tech wasn't there but everyone could see where it was going, like all investments, it was a matter of timing.
Crypto is still at the fundamental research phase and we don't even have consensus that it does more good than bad, yet.
And yes, I know about the supposed use for people in countries with unstable regimes but I'm not convinced at the moment. Plus that use case, being that of people generally having low disposable incomes (barring China) absolutely doesn't justify the market value of crypto at the moment.
That's your best argument against regular currencies? That they're being manipulated, too? :-)
Of course you can burn your crypto and send it so some random contract. You can also take traditional money, go to the woods and burn it.
Could.
So far you've been using the present tense, "the [dumb] contract replaces the solicitor", or such.
Obviously it doesn't. Or could you tell me in which countries in the world you won't, at present, have to pay the government to register real estate ownership changes in its ledger just because you paid the seller in a crypto-"currency"?
It's not obvious at all that it could be replaced by crypto.
So all this complexity to get around regulations but you are going to run into the reasons this regulation came about at some scale.
There are a few stories on the ThisIsMoney (UK's Daily Mail's money rag) front page right now about relatively convincing and sophisticated scams where people were robbed of thousands.
The average person isn't ready for the risk of crypto.
https://www.thisismoney.co.uk/money/beatthescammers/article-...
https://www.thisismoney.co.uk/money/beatthescammers/article-...
It also shows how many of these scams can be defeated with a few simple precautions. Most of them would be defeated by calling the bank back… in other words don’t answer your phone, make all your calls outgoing. Others are defeated by simply not doing anything hastily and under duress (like urgently wiring all your money to an external account for “safekeeping”).
Yeah, but in today's traditional banking system people don't have to contend with currency-changing ATMs that change dollars to euros, and when you feed euros into them by mistake they just shred your money in stead of spitting it back out.
That's not the user being gullible (or OK, maybe that too, but mainly), it's the system being moronic. Or perhaps rather, evil.
This was an early adopter that just got around to experimenting and didnt even try to keep up with how things work now.
But yeah who has the time...
Not entirely sure what point you're trying to make here.
Or, in other words: the exact same thing happens to my 80 year old grandmother when I explain about my android phone.
Doesn't make the device any less useful.
* there's a smart contract to which you can send ETH (directly), it sends WETH back
* however the inverse operation (WETH -> ETH) is not done by sending the WETH, you're supposed to call a special conversion function of the contract
I guess the smart contract only looks for ETH in its wallet (at its address), it ignores the WETH entirely, and thus the WETH become inaccessible.
So the contract is a deposit ATM where you can deposit cash and it spits out a bank check, but if you deposit a bank check it just shreds the check.
Or a currency conversion machine where you can shove USDs in the slot to get EURs, but if you shove EURs in, to the shredder they go,
>Or a currency conversion machine where you can shove USDs in the slot to get EURs, but if you shove EURs in, to the shredder they go,
Very good explanation, thanks, though the machine you describe would not probably be called a "smart" ATM.
This example is kinda funny. If your bank notes were accidentally damaged in germany, you could send them to the federal bank and have them replaced as long as more than half of the bank note can be reconstructed. This is a service intended especially for victims of fire or flood catastrophes, though dog related accidents aren't unheard of either.
Why would you ever want to “shred the check”? Is this the intended functionality or a bug?
You don't, and it's not what technically happens, but it's the closest I could find as the actual behaviour can not be replicated in the real world.
The actual behaviour, at least in my understanding, is that the bank check goes in a box to which only the ATM has access, but the ATM was never coded to look for bank checks in the box, and it's not possible to update it, so it's not possible to get the bank checks out of the box.
In the real world you could take the box out and force it open, but in "the blockchain" the contract has sole control of the wallet, an updated version of the contract would be a different contract with a different address.
> Is this the intended functionality or a bug?
It is, in the broadest sense, a bug: the contract was not coded to handle anything other than ETH inputs, so it ignores everything else, but the other things were still moved into the box.
Which I think drives the point of all this crypto talk in acronyms contributes to it being incomprehensible.
It it a way of storing the same kind of thing that JSON can store.
Though, unlike JSON, it supports comments, uses a python-like significant indentation, and has a few uh, things not in quotes sometimes being taken as strings, but if it is `NO` then instead, if there are no quotes, it will be interpreted as the constant false .
Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss. They can also automate a workflow, triggering the next action when conditions are met.
contract WETH9 {
string public name = "Wrapped Ether";
string public symbol = "WETH";
uint8 public decimals = 18;
event Approval(address indexed src, address indexed guy, uint wad);
event Transfer(address indexed src, address indexed dst, uint wad);
event Deposit(address indexed dst, uint wad);
event Withdrawal(address indexed src, uint wad);
mapping (address => uint) public balanceOf;
mapping (address => mapping (address => uint)) public allowance;
function() public payable {
deposit();
}
function deposit() public payable {
balanceOf[msg.sender] += msg.value;
Deposit(msg.sender, msg.value);
}
function withdraw(uint wad) public {
require(balanceOf[msg.sender] >= wad);
balanceOf[msg.sender] -= wad;
msg.sender.transfer(wad);
Withdrawal(msg.sender, wad);
}
function totalSupply() public view returns (uint) {
return this.balance;
}
function approve(address guy, uint wad) public returns (bool) {
allowance[msg.sender][guy] = wad;
Approval(msg.sender, guy, wad);
return true;
}
function transfer(address dst, uint wad) public returns (bool) {
return transferFrom(msg.sender, dst, wad);
}
function transferFrom(address src, address dst, uint wad)
public
returns (bool)
{
require(balanceOf[src] >= wad);
if (src != msg.sender && allowance[src][msg.sender] != uint(-1)) {
require(allowance[src][msg.sender] >= wad);
allowance[src][msg.sender] -= wad;
}
balanceOf[src] -= wad;
balanceOf[dst] += wad;
Transfer(src, dst, wad);
return true;
}
}Knowing nothing about it, this is the question that remains unanswered to me after reading through dozens of comments on this debacle. What was the person who lost half a million trying to accomplish? For what benefit?
I assume that if you just want to use ETH to buy and sell stuff, you don't have to get involved with any of these smart contracts.
I'm still kind of confused how ypu go from one ERC-20 chain to another. I know there's wrapped Ether on other chains but I'm not clear on how it got there or whether it's a good idea to hold that. Seems like a "not my keys" situation in a way.
Correct. If you want to send someone money unconditionally, you can just send it without a smart contract.
> What was the person who lost half a million trying to accomplish?
Why/when to use WETH? From the beginning:
Like Bitcoin, ETH is a crypto currency that has it's own token called ETH (or Ether), you can hold it, send it from one address to another address and earn it by mining. Providing a basic finance and value excahnge platform.
In addition to ETH, Ethereum supports (via Smart Contracts) things called tokens, that are effectively alternative cryptocurrencies. Pre-Ethereum, people needed to create a new chain for each new token, for example you have "NameCoin" and "LiteCoin" and "DogeCoin" and so on. Each has it's own network, initial block, wallet client, mining pools, etc. It's a copy and paste and edit of Bitcoin each time.
With Ethereum, you can create a new token with it's own separate initial supply, precision, allocations etc. on the same blockchain (Ethereum) using a Smart Contract. People can use these tokens on the same network, using the same tools. However there are limits on how different they can be - you can only do what the Ethereum tech allows.
Now as time went on, there were a lot of tokens, and so they developed a standard, ERC20, which is like a C# or Java interface that defines a standard token. With this in place people can write code that interacts with "any token".
I could create a stock exchange contract where people list, place orders etc. to swap tokens. Even once this stock exchange is written and deployed, people can create brand new ERC20 tokens, and because those new tokens meet the interface, the stock exchange will work with it.
This all hots up and of course people naturally want to use these stock exchange, and other contracts (be it gambling, lending, escrow or whatever...) with the original ETH token, since everyone playing has ETH (you need ETH to pay network fees), and it's value is going up and wotnot.
But ETH is not a smart contract. It's hard coded into Ethereum. It was written before ERC20 was standardized. So you can't use Ethereum as one of the tokens in your stock exchange.
WETH offers a way to wrap Ethereum in an ERC20 token and solve that problem!
Since smart contracts can define rules about deposits, withdrawals, etc, and smart contracts can own their own Ethereum. This wrapping can be done purely in code. No need to trust "WETH Inc"*.
WETH is basically an "adaptor" from the gang of 4 design patterns.
* Other wrapped coins usually require trust. For example "Tether" wraps USD, but it requires a company to manage the bank accounts. People may decide they don't believe that company really has the funds, or the parent company could be put out of business by a government. WETH on the other hand is wrapping something on the blockchain in a code-automated way.
You can make mistakes (like the OP) but unless there is a big security hole no one has discovered, you can't have the money stolen or confiscated unless your private keys are compromised.*
1. Buy ETH
2. Convert to WETH
3. Swap for TOKEN
4. Hold TOKEN
5. Swap token back for WETH (hopefully made a profit there)
6. Convert WETH back for ETH
I did this using Metamask / Uniswap so it is all done for you. So I had no need to understand how the contract works. Also didn't have anywhere near $500k!
function() public payable {
deposit();
}
Cryptocurrency is designed for general use. Kubernetes is designed to abstract specific problems away for specialists.
We shouldn’t shill any technology, and anytime we do talk about it’s virtues we should discuss its shortcomings and why people should be hesitant to use it.
I mean unless you decide to use Amazon EKS for a side project of course...
He did test but using the wrong mental model.
The supporters here are saying "yeah, it shreds dollars, he should have known that". And yeah, if you have a machine that shreds dollars, you better know what it does. That's a good reason for not having such a machine.
Anyway, ETH seems to be full of those features where it shreds money on places that are really not obvious and sometimes gets every single person by surprise.
Fuck knows. No legit reason that I can see; because cryptards are idiots, is the only thing that comes to mind.
> Who anywhere is interested in a dollar shredding feature?
Nobody with the least bit of sense. (But, see above...) That's why he was complaining about it.
I don't go to a geneticist and go "the problem with genetics is I have no idea what any of it means".
What the redditor did was analogous to ignoring the exposed UI elements on a web page and instead opening up the console and calling the JavaScript functions directly. The average user doesn’t try to do that, and so any such failure is not an issue of the website “needing an advanced understanding”; simply following its UI elements is enough.
So it’s unfair to equate the understanding needed for the top explanation with the understanding needed to use a cryptocurrency app.
That user could have used it how other people use it.
There are a lot of things here that have nothing to do with “crypto needs to be simpler” copypasta. This particular thing was not simple and never will be unless everyone stops using it. Focus on that one thing: How to design a better smart contract? How to design a better UI for the end user? Thats a great discussion for a programming forum actually.
There is an absolute need for cleaner UX on top of this with assurance/insurance to avoid this scenario (both of which exist and are being improved regularly). In the same way you don't directly interface with SWIFT APIs when doing bank transfers, you should not interface directly with ERC20 approve/transferFrom APIs in Ethereum, unless you really know what you are doing.
If you are seriously comparing your monetary system to something that evolved by chance there is a problem with your monetary system.
>> Wow why didn't the contract creators think this through and block requests to the contract
> Because adding that check would increase the cost of every user transaction. All AMM swaps would be done with WETH so it’s the right call to not have it in there
A design which actively discourages robust programming and error handling in financial software. Wow.
Want validation? Other people don't want to pay for stuff they're not validating... so it's on you to be careful.
Accidentally fuck up? Not our problem, that's on you for not calling the right API.
Want your money back? We're not paying money to cover for other people's mistakes. You're on your own bud.
Idk why people conflate libertarianism with this hyper-individualist stuff. It really isn’t the case.
Of course a lot of people noticed. The problem is that cryptocurrencies are currently primarily functioning as investment object rather than an actual secure financial ledger, which is why the interest of investors will trump purity.
The half million was a fair and just transfer. Whoever is the recipient is fully deserving both morally and ethically of their new-found wealth.
If I was on the receiving end of this transaction, I’d thank the sender for the money and move on with my life. Of course I’d never be in the position to receive the funds because I’m not stupid enough to play this game—odds are very good I would be the one who sent half a million dollars by mistake!
I mean, I think I’m joking but not really. If you want to practice “code is law” and really mean it, this is the kinds of stuff that will happen.
It ought to be possible to craft an insurance policy that would pay out the $500k (or equivalent WETH/ETH) in cases like the one in this article, where the transparency of the ledger clearly shows that the tokens are unrecoverable.
As insurance companies are notorious for declining to pay out, the clear evidence trail would be helpful to allow the insuree to take the claim to a regular court for a human decision on its validity.
An insurer that knows when it doesn't have a case and will be forced to pay (plus costs) when there's clear evidence of coverage and loss will almost always pay without a fight.
However if there are high-value decisions which are not so clear cut, then having the option to go to court or some other mediation system to settle is quite useful. One of the critisms of "code is law" is the lack of mechanism for nuanced, human intervention when something unexpected happens due to a bug, design flaw or unexpected consequence that turns out to be unreasonable.
Ahahahahahha. Ahahahahahahahahahha. Ahahahahahhahahahahahahahah.
--- several minutes of laughter later ---
Markets don't care and they will not fix these issues, because suckers losing money is a much better market proposition than losing money on customer support.
Fo go ahead and learn some history, will you? Almost every single regulation we have in place is precisely because markets never ever fix things.
And no amount of mocking faux laughter will change that.
BTW I never had success trying to chargeback VISA for services that were not delivered. Scammers do it without problem though.
Crypto combines the worst properties of cash and wire payment into a package that has no customer protection and is almost tailor made for scammers.
You are indeed renting a machine to run some code, and if you want many people to use your code you want to make it cheap. There's a trade off.
You can fuck up things on the BTC blockchain too, "burning" crypto by sending it to a dead address has been a thing for a long time.
It always seemed stupid to me that it was possible, compared to sending money to an invalid IBAN, but I'm not a crypto enthusiast so I may be biased.
Of course you can do both things, which is why catastrophic financial ruin is a daily fear when dealing with cryptocurrencies.
https://www.quora.com/How-can-I-find-my-Bitcoin-cash-that-I-...
Giving a person control over the funds allocated to their smart contract probably opens holes where they can steal the smart contract's money, though obviously creating software that handles money and can't be updated is its own kettle of fish.
We can point and laugh at this one person, but according to the reddit thread they're the 265th person to make this mistake, and more than half of the money in the inaccessible account is not theirs.
No one gets everything right the first time, but with a lot of testing, you can actually write software that does exactly what you think it will do, and you can achieve pretty cool stuff. Remember that humans wrote the software that took humanity to the moon!
What you describe are dry runs.
Just like the people writing the computer that took us to the moon, I'm pretty sure they tried it before in small-scale simulations before hooking it up to the rocket and letting it go to the moon.
The incentive was robust code that would work well, get it done, go to the moon.
Here, machine time is expensive, puts emphasis on code that works, but just barely...
Let's just say NASA would check for the "yup, you are gonna burn some money" case, and reject it.
I think that people are so unlikely to fuck this up that such a check would be rather pointless.
Money matters a lot. Should this mess endure, people will forever be saying a little bit of gas would have been worth it.
And we've people with six figure arguments as to why such a check makes sense.
The idea of minimal code, focused on speed coupled with financials leads me FAR away from all this.
I will watch with great interest and entertainment.
Yeah, because NASA has been utterly fucked by the congress. Because of politics it's better for NASA to spend 5x the money on 1 reliable spacecraft than to build 5 slightly less reliable spacecraft out of which only 1 fails.
Even if the economics of it don't make sense, NASA can't afford to be seen failing because because politicians will not want to fund them.
I guess my point is that NASA is an exceptionally badly managed entity, not something you'd want to aspire to. (Of course the people working at NASA are not the ones to blame for this.)
>Money matters a lot. Should this mess endure, people will forever be saying a little bit of gas would have been worth it.
That gas would probably add up to more money than has been lost here.
>And we've people with six figure arguments as to why such a check makes sense.
The gas fees of such a check would probably be higher than the losses averted, especially in the long run. And any "losses" are essentially distributed among all ETH holders anyway.
This is also how high toxicity systems get made.
It would be stupid to put these checks in the contract, they would be very expensive and only help people using unsuitable client software.
You feel all client software will be suitable?
I don't. There is NO WAY. Lots of people will do ANYTHING for a bit of margin, hoping for volume.
Of course not. There will be more advanced software for expert users that allows them to manually create potentially riskier transactions. That's perfectly fine.
Client software targeting end-users should have such checks.
You only one need one wallet software to be the official WETH-approved client, sucks for anyone else risking their money with unsupported software.
We shall see. And for me, safely and at a distance.
Frankly, the small cost of robustness in contracts should have been factored in from the beginning. It just does not need to be so damn lean and rickety.
The incentives are wrong here.
My prediction is the current state of affairs all gets ripped up and replaced after a time. And until that happens, we are likely to see activity largely limited to people who have a healthy appetite for risk.
Perhaps it all is as it should be too. Had the reverse been done, emphasis on slightly more expensive contracts that are robust and able to deny the costly errors, I would imagine others clamoring for people to adopt the rock bottom lean stacks...
What it won't all be is dull, will it?
>Frankly, the small cost of robustness in contracts should have been factored in from the beginning. It just does not need to be so damn lean and rickety.
It really doesn't seem necessary, more complicated contracts require custom frontends to interact with anyway.
How come such a check is so damn expensive?
It should not be.
Clearly Ethereum is far from a ready product, but I think we can expect to see massive improvements when proof of stake goes live this year.
The user was not doing a normal transfer (at least, they didn't want to, but they ended up doing). They didn't know what they were doing at all, a simply Google search would have showed them the way. Using UIs instead of interacting with the contract directly would have prevented them from making the mistake they did. Doing a small test transfer before doing the big one would have revealed what was wrong as well.
It's not that I'm comparing writing software for moon missions with making cryptocurrency transactions. I was directly replying to mox1 implying that writing 100% correct code is impossible and shouldn't be attempted.
That is how high toxicity systems get made.
https://www.forbes.com/sites/lanceeliot/2019/07/16/apollo-11...
There are 0 do-overs on smart contracts in production. No stopping the network for a minute to triage, no rolling back a minute, no circuit breakers. No "Error 1202, do you want to continue?" pop-up messages.
Try sending cryptocurrency to an invalid address and you'll see that the wallet will reject sending it, just like email bouncing.
A “valid” address locking up funds sent to it without recourse is /dev/null.
Simply said: you cannot send funds to invalid addresses on Ethereum.
A protocol could conceivably require the recipient to verify they're holding the private key for the address before the transaction can take place.
Yet here we are.
The user in the submission did not send funds to a invalid address. The address is valid, as otherwise funds wouldn't be able to be sent to it (the wallet would not allow you, nor the protocol, nor the miner/validators). The address happens to belong to a contract, that can also hold funds, similarly to accounts.
Now, every address/account/contract has a private-key behind it, that allows the owner of the private-key to transfer out of the address/account/contract, but it's impossible to know if the owner actually still has the private-key.
Similarly to how you can't know if john@example.com actually has access to his email account (maybe he forgot his password?), you can't know if an address actually has the possibility of moving the funds out of the address, as the private-key can have been thrown/forgotten/lost.
The stakes are a little bit higher when you’re sending money instead of emails.
Why doesn't it count and why does it matter how Gmail works behind the scenes?
Obviously the person you replied to meant invalid in the sense of “not intended to receive funds”
It would have been a competent design decision for a system to require some type of initial registration of intent to receive funds for an address in order for a transaction to post.
The same thing was done on the bitcoin chain, e.g. counterparty[0] was relying on a "proof of burn" which was basically "Send BTC to a black hole".
There's a reason some contracts (in the regular legal world) are illegal.
Wait... so the tokens are really still there, just inaccessible? In what way do the tokens still exist? What makes them inaccessible? Is there really no possibility of restoring the tokens? No possibility of cleverly hacking them out with the assumed myriad of unpublished security flaws?
... Reminds me of another financial infrastructure I know.
... Lest anyone ever think Blockchain tech is somehow immune to network effects and social considerations.
But, yes, blockchain stuff is fundamentally based on consensus about what the rules are, and people/organizations with more social influence can [...] .
This is just a dumbass user doing dumbass things. This is basic-level stuff right here. Don't interact with contracts directly unless you 100% know what you're doing.
We can even see this with the criticism of wire fraud. Wire fraud is a huge fucking mess that occasionally costs people their life savings. The entire setup is rightly criticized (heck, even by the crypto community) for having users interact with a highly error-prone system with huge consequences.
This is qualitatively different from crypto that allows you to burn your money on accident, while the people who build the infrastructure for this tell you is a smart, safe place to put your money.
But also, wiring money is a thing that laypeople almost never do. It’s nerve wracking to wire money. But the equivalent in cryptocurrency is just how it’s done. Every transaction is just a fuckup with no recourse waiting to happen.
You can dump money into a pit just as easy with the classic banking system. Where I live (EU), wiring money is the primary way of payments and money transfers. People don't use anything else.
Seems like it essentially was. He exchanged ETH for WETH in exactly the same way. Assuming that the reverse would work (as opposed to destroying the money) was not an unreasonable step. He still screwed up, but a design that allows this is user hostile and stupid.
> You can dump money into a pit just as easy with the classic banking system. Where I live (EU), wiring money…
In the US at least, you can get your money back through the legal system. Accidentally dropping your money into someone else’s account does not give them a right to it and for substantial amounts of money people can and do get their money back.
For this amount of money I’d consider pursuing legal avenues against the developers of Etherium. This design seems borderline negligent and Etherium has modified the code at least once already to force a refund.
> In the US at least, you can get your money back through the legal system. Accidentally dropping your money into someone else’s account does not give them a right to it and for substantial amounts of money people can and do get their money back.
I doubt this is true in the case of uncooperative out-of-country second party - yeah they have no right to the money, but they don't care and the legal system won't do much for you.
I still find the wire transfer comparison lacking, mostly because one shitty design does not justify another.
Of course one shitty design doesn't justify another, but the point is not justification but a reply to all the people saying "this is way worse than and would never happen with the traditional banking" that they are wrong. I agree that better UX is needed.
Regarding your point about legal action against Ethereum designers, well... That'd be like pursuing legal action against the designers of your web browser because it allows you to open phishing sites. Nonsense IMHO.
I tend to agree. Dumbasses clearly designed this system if it allows money to be accidentally destroyed. Dumbasses doing dumbass things indeed.
But if you use any of the exchanges you described, you have to trust that they 100% know what they're doing.
It seems safer to avoid smart contracts and cryptocurrencies altogether.
The fact that you have to get 10 digits right and that a typo can result in sending the money off somewhere unknown, disturbs me a lot. It's amazing how cryptocurrencies mimicked that part about existing digital money to perfection.
Give me a QR code, or wire my wallet up with an address book.
An „off by one“ typo cannot occur.
Especially in the tech age where they seem to think they're beyond physical keyboard typos and OCR errors.
You can optionally register your email with the central system for autodeposit.
Despite the protestations of advocates, this kind of thing is a major hurdle to adoption.
There is nothing magical here. It's a bit like avoiding the checksums that IBAN has, and then complaining that IBAN is broken. Most people interact with WETH via UIs, but for some reason this user chose not to, and got severely burned because of it.
Things that require expertise usually requires one to know acronyms and how things works underneath, the cryptocurrency space is no different.
Now I don't know what you do for a living, but it certainly isn't cryptocurrencies. I'm sure there are more industries you don't work with on a day-to-day basis, and when people who are in those industries talk with each other on a technical level, you'll see the same amount of jargon. That's just part of expertise in a subject.
For example, two of my friends are chemists, and sometimes they talk chemistry stuff when we're having dinners and stuff. Of course I don't understand most of the stuff they are saying, but I'm not gonna claim "chemistry" is "magical knowledge" just because I don't understand it, so I'm not sure why you would about cryptocurrencies.
And yes I'm aware the lady in the case suffered and it's terrible. I'm just being facetious
In general, giving someone money does not require intimate knowledge of what's happening behind the scenes, that's true. But the submission is not about a normal transfer, the user is explicitly avoiding the safe-guards in place, and got burned by it. It's no surprise really.
Why, is there a way to send currency directly and irrecoverably into a paper shredder on the inside?
No one sent any currencies into a "shredder", so not sure why you're asking this question?
This is basically the style of argumentation being used here. Frequent equivocation over the terms "valid" and "black hole" to avoid addressing anyone's actual point.
But yeah the ability to send the directly to the address is stupid. There are no real world and crypto world use cases do it. I think the most glaring thing is that person has 500k in ETH but no idea how smart contract work or how to use the functions...
It could apparently only swap from one kind of crypto-"currency" to other stuff.
> But yeah the ability to send the directly to the address is stupid.
Isn't the problem raher the ability to send the wrong "currency" to the address?
If it can only change from one kind to others, then the correct behaviour is obviously to accept only that kind, and reject any others. This is basically an online version of a physical currency-changing ATM, where you feed in dollars to get euros (or other currencies?) in stead. If you feed in euros or pounds or yen by mistake, the ATM should obviously spit it back out. This online version just swallowed the wrong currency. You don't have to know how ATMs actually work internally in order to determine that this is invalid behaviour not only on the user's part, but definitely on the ATM's too. If the ATM can only change from dollars to other currencies, then it should only accept dollars.
You'd expect that invalid actions lead to idempotent errors, not glitch states where you lose everything.
Indeed, and that's exactly how most cryptocurrencies work today. You try to send funds to an invalid address, the wallet will present you with an error that you cannot do that.
The user in the submission did not perform an invalid action, because they wouldn't be able to perform an invalid action.
They clearly didn't want to burn £500k, and that is now irrecoverable, alongside 260 other people who made the same mistake, on a smart contract that forgoes validation for gas fees.
How is this not invalid?
Yes, this is indeed the definition for "valid", that the protocol allows them to do it.
It was a valid action, but not the action the user actually wanted to perform. There are two ways of avoiding these scenarios: A) use UIs and don't interact with the protocol without safeguards, as the UI will prevent you from making mistakes (this user interacted directly with the contract, not via a UI) and B) when doing something involving a lot of money, do it once first with a small percentage, so you can verify it's correct (this user didn't do this either).
For example, I know that IBAN has checksum built into the "address" and that the bank could revert transfers, but if I make transfers above a certain sum, I always send a small amount first, make the recipient confirm how much they received (I send a small random sum) and only then do I perform the larger transfer.
As I mentioned elsewhere in the comments on this submission (https://news.ycombinator.com/item?id=30136941), it's impossible to know if someone actually has access to an address or not, so why would the wallet stop them from sending it?
The point I see made instead is that the smart contract should not be coded to behave as it does. If a financial product at a retail bank set a pile of cash on fire when you used it incorrectly, regulators would swoop in and make the industry add some safety features, even if that safety came at the cost of convenience.
Some sort of analogy could be margin calls/puts. Imagine someone who doesn't know how margin trading works used it, and lost half a million dollars. Who's at fault here? The bank for allowing it, the financial system for having the feature or the user for not educating themselves enough to understand how it works?
That is not a comparable situation. The ETH/WETH trader misused a negotiable instrument, and 500K disappeared forever. Someone who loses 500K gambling on margin was gambling and lost. If they somehow mistakenly placed an order on margin, there's probably a process to reverse the transaction and get your funds returned within a specific time window (that's just a guess on my part, though, and it probably depends on the brokerage used).
> It's very hard to draw parallels from cryptocurrencies to other things as it's not like other things we have today.
I don't think this is true; cryptocurrency in this situation is very similar to cash. You can get mugged while holding 500K in a briefcase, and the funds are unrecoverable absent legal restitution. But that's why banks make you sign a waiver of liability when you withdraw large sums in cash.
It's an action noone ever has ever wanted or ever will want to perform.
In the same way putting your finger inside a power socket is an invalid action, and people who designed sockets were smart enough to make it impossible.
This transfer was a transfer from one address to another. No one has ever wanted to do that? It's the entire point of cryptocurrencies!
The fact that said protocol is incapable of addressing real needs is a failure state, and historically this has been addressed by building better tooling on top of the protocol, or replacing it wholesale.
The arguments here are odd. The blockchain isn't built to handle this kind of operation by a non-expert user. Yes, mistakes are expensive. Is that okay? In the same way that a nuclear power plant isn't designed for a rando to go in and operate it.
Yes, raw blockchain stuff is hard and non-experts should not interact directly.
The key question is, is the payoff worth building an entire system around? For nuclear power, yes, because it provides electricity for people to just plug into. For blockchain, maybe, maybe not.
It's the "right" address for certain transactions--like turning ETH into WETH--but the "wrong" address for other transactions, which makes the whole thing a garbage design. You can say "that's just the way Ethereum/crypto/smart contracts work" all day, but it doesn't matter.
Most people don't care why the design is bad, they just care that it is bad, and that there are better theoretical (or real) alternatives to this tech.
Sure, the user sent stuff to the wrong address... Or did he? Seems, rather, that he sent the wrong kind of stuff. Had he sent, whateveritwas, WETF in stead of WETH or vice versa, then it would have gone right.
So then it seems the receiving thingamajig was at least as much at fault: It accepted (and just swallowed) a kind of stuff it shouldn't receive. It's like, say, a one-way currency-changing ATM that takes dollars and returns euros. If you feed in euros by mistake, it fucking obviously should just spit them back out (and preferably display or print an error message, "Wrong currency: Gimme dollars to get euros.") You're saying just swallowing your euros would be a "valid" behaviour for that machine.
That's so obviously bullshit that the only remaining mystery here is whether you're actively trying to defend what you know is indefensible, or actually so deluded that you've somehow convinced yourself this bullshit is true. Well, no, not the only one: The other mystery is, which is worse?
Listen, in this case, there already is circuit breakers, ground fault circuit interrupters and more to prevent problems to happen in the first place. The wallet is the first guard against this, the UIs the various services provide is another, and so on.
But when the user bypasses those and interact directly with the chain, which is not recommended for people who don't know what they are doing, problems can happen.
The same as if someone bypasses all those checks you wrote about, and then complains that they got a ton of electricity zapped into them. Why doesn't the grid just know that it was a human and not something else and stopped sending electricity?!
Reality is not that simple.
This is not the case of a non-intuitive system screwing the user. This is the user purposefully avoiding using the intuitive systems setup for them, and interacting with something directly even though no one does that unless you're a developer. This person has half a million dollars worth of X, while not understanding X.
> (after there's so much prior, "return to sender" art in the world)
That's awesome that you have come up with a solution for this, while the ecosystem hasn't been able to. Could you share your solution?
It's a hard problem to solve in a system that has to A) be decentralized, B) work when less than half the network is trying to screw you and C) prevent double-spending
"return to sender" sounds easy to implement in a centralized system, but it's not that simple for a decentralized one. At least not until you release your solution.
Of course using the intuitive systems setup for the means that one has to trust some random people or companies, instead of going directly to the blockchain. What happened to trustless?
This is something the developer of the contract should explicitly opt into. As others pointed out, if everything a contract did was via explicit methods, rather than transfers, this type of defect would never have been created.
That's not entirely true. Just look at one of the many burn addresses that people willingly send money to all the time, for example: https://etherscan.io/address/0x00000000000000000000000000000...
For example, some holder (maybe a founder) of a certain coin can burn a certain amount of their tokens, making it more rare. This is a quite common practice. If I were to burn a certain amount of tokens, I think the most natural thing to use as a burn address would be the contract address itself.
I believe that this, right here, is the core disagreement surrounding the utility of cryptocurrencies. There are two orientations to think about software. One is the software orientation and one is the human or problem orientation. "It did what the software says" is a defense often used by crypto advocates who point out, rightly, that there are very strong guarantees that cryptocurrencies provide and other things that they completely do not guarantee. Other people point to the mismatch between the guarantees that cryptocurrencies provide and the actual failure modes that are very common in the real world and complain that advocates seem to be completely ignoring these issues.
I think a relevant comparison is security vulnerabilities in traditional software. If you've got a program that is exploitable through a buffer overrun that enables arbitrary code execution, the program is behaving precisely as programmed. From the perspective of the program and the computer, there is no difference between ordinary operation and the exploit. But from a human perspective one of these behaviors is expected and one is both unexpected and undesirable. And the "well, just don't fuck up your C program" argument is basically failed at this point, for good reason. I would expect to see the same in the crypto space.
Most likely your bank will reject the transaction and not even defund your account - as you mentioned, the IBAN itself is already designed to prevent human error.
If by chance you “crafted” a technically MOD-97 valid but not existing IBAN and the money goes out to the other bank (PACS.008), the other bank cannot book it (as the account doesn’t exist) and should automatically return it to you (PACS.004).
If by chance the other bank is incompliant and does not return the money, you can have your bank send a recall message (CAMT.056) to try and retrieve the funds. The other bank is then compelled to either refund the money (PACS.004 again) or at the least officially communicate they’re keeping your money (CAMT.029).
At that point, there’s still law and legal avenues to pursue.
One thing that does not and can not happen though, is for the money to vanish into a black hole and be removed from the economy. That is what a stable, standardized and reasonably regulated industry with some centralization does for you.
What happened here is more like you used IBAN to send to the correct account, the correct bank and everything was correct, but no one actually has access to the account but the bank doesn't know this.
Nothing has vanished or been removed.
If you sent a IBAN transfer someone will get the money. You transfer to someone else that gets the money and you could try to go to court.
The money just doesn’t disappear like in crypto.
The e-mail is a great example, the e-mail can be lost, thats why no bank ever made transfer over email! You loose the e-mail text, not 500.000$!
> You know what happens when you send Ether to a incorrect Ethereum address? The wallet will reject sending it. If you bypass the wallet and rewrite your own wallet to send it anyways, the validators reading from the mempool will reject it. If you rewrite your own validator to accept it anyways, no other validator will accept it and the transfer will never go through.
> What happened here is more like you used IBAN to send to the correct account, the correct bank and everything was correct, but no one actually has access to the account but the bank doesn't know this.
Let's talk about putting safety rails around large drops.
They should never be necessary with careful use.
And they can't prevent everyone from falling to their death.
But they still prevent some harms, so we generally require them to be present.
Design to do everything with contracts through methods instead of transfers to contract addresses would make this particular type of failure impossible. There would still be other ways to screw up and lose money on accident, of course. But any way that can be reasonably eliminated and isn't, is a design flaw.
This guy was pretty far over on the right side of the bell curve when it comes to Ethereum knowledge.
It's still obviously a giant design gotcha that losing money this way is possible. They fact that it happened to a guy who knew probably 95% of the esoterica he needed to know to complete the transaction successfully and still got completely burned is an issue.
You'd think so, but you'd be surprised.
> This guy was pretty far over on the right side of the bell curve when it comes to Ethereum knowledge.
No, that's not true. Even people at the beginning of the bell curve know that you don't send half a million worth of anything around without verifying first that what you're about to do, is correct. You first do that by reading through everything and double-checking. And after that, you do the thing you want to do, but with 1% of the value or less, and verify/double-check again. After that, you do what you actually wanted to do.
The ecosystem is very new, has bunch of sharp edges everywhere and there is no recourse if you do anything wrong, so going through this process is something you learn very early on.
> They fact that it happened to a guy who knew probably 95% of the esoterica he needed to know to complete the transaction successfully
This is obviously not true, as the person seems to not even have search for "How to convert X to Y" before performing something they know they might not be able to undo.
Thankfully we have banks to deal with that - and legal framework that can help us undo problems.
"But you can use an exchange with ETH!"
Like banks? Making such networks ostensibly not 'decentralized'?
The entire point of Crypto/Blockchain is that is decentralized and is accessible to everyone.
If it requires that we trust 'quasi-centralized nodes' like CoinBase (i.e. banks) then it mostly defeats the purpose. Just use a bank.
At absolute minimum, the purveyors of such tech should be providing 'off the shelf' free wallet software that solves all of these problems of magical knowledge.
All of these arguments are fading quickly and the people doing this are risking a lot of credibility.
We talk about people wasting their time on AdTech, but at least there is actually some value in AdTech. We are facing an entire generation of people doing 'NoTech'. Let's turn this into something useful.
The user basically guessed that this is how you turn ETH into WETH and vice-versa, without actually reading anything about it.
If the user searched for "How do I turn ETH into WETH?" and read the first few links, they would have avoided this problem. If they made a mistake of entering an invalid address in a wallet for a transfer, the wallet wouldn't allow the transfer in the first place.
> The entire point of Crypto/Blockchain is that is decentralized and is accessible to everyone
Yes, indeed. That also implies that you're responsible enough to have a basic understanding of what you're doing. Or at least recognize that you don't have a basic understanding, and seek to attain one when needed.
People will always press the Magic Red Button without knowing what it does with some, if rare, consistency. That's human nature, ergo, our systems must accommodate.
The fact it's possible to lose $500K whereupon 'nothing can be done about it' is a 'dealbreaker' for this tech.
The truth is, when one goes down the rabbit hole, one discovers that ETH doesn't really solve any problems and creates a bunch of problematic side-effects. When you solve those side-effects you end up with something that looks like a regulated banking system.
There needs to be a new angle/twist or use case that we haven't thought of yet, in order for any of this to make sense. We risk getting into accidents when we drive a car, because the 'upside' of fast travel is worth the risk. There's just no real upside with Crypto yet. NFT was a neat idea, but that's not it either.
Are you also frustrated that you can run `rm -rf --no-preserve-root` on your computer and it's not possible to get back your data unless you had backups since before? Clearly, this is a dealbreaker for UNIX because it allows you to delete your root partition. Why would you ever need that?
> NFT was a neat idea, but that's not it either.
Yeah, no, NFTs were and remain a disgusting idea, but thanks for revealing your opinion on that, makes it easier to understand where the falsehoods in the rest of your message comes from.
Oh, yes, I'm one of those 'normies' or 'MBA Suits' (!) who can't possibly understand the genius and vision of Crypto and Blockchain.
We see it is a 'Pyramid Scheme Scam' at worst, and completely useless distraction at best, because we're just not enlightened.
You got me.
Its not like going to a shell and putting a random command. It was one of the most used GUIs for crypto!
Isn't it the "contract" that is supposed to be the "smart" thing here?
> effectively bypassing the safe-guards that are already in place (even without exchanges) to prevent issues.
YTF aren't these "safe-guards" built into the "contract", if it's supposed to be so "smart"?
Even the most stupid ordinary non-"smart" conversion program has the "smarts" to reject invalid input, not confiscate it.
This whole Crypto/Blockchain business is so obviously bullshit all the way down.
> At absolute minimum, the purveyors of such tech should be providing 'off the shelf' free wallet software that solves all of these problems of magical knowledge.
UI is continually improving and is already much better than in the early days. But the “purveyors of this tech” don’t owe you anything. If you’re not satisfied with the current wallet offerings, you can go build your own, or you can simply choose not to use cryptocurrencies.
"But the “purveyors of this tech” don’t owe you anything"
You're right.
And it's why nobody in world uses crypto, blockchain or any of this nonsense for doing anything productive and use it solely for trading magic numbers.
but yes, I find myself thinking the same with many things. especially when the disciples seem irritatingly proud of their "knowledge" which actually is just a collection of arbitrary and anti intuitive rules.
"Any sufficiently advanced smart contract system is indistinguishable from Magic the Gathering (tm)."
I think it would be like writing "applications" in the early 90s in Visual Basic and then reading something about web applications and saying "I was involved in applications and none of this makes sense to me". That's because it's a different domain, with some similarities but many differences.
Edit: Changed "crypto" to "cryptocurrency" to differentiate from a different general problem with how the shorthand already had a different meaning.
Or those of us who immediately think of AES, RSA, and Diffie–Hellman.
Anyone around tech in the 1990s may also remember:
I actually think this one leads to less confusion though, because the people who are familiar with "crypto" vis cryptography universally have enough expertise to differentiate it from "crypto" vis cryptocurrency. Whereas I would estimate that at least 99% of people who have heard of both Bitcoin and Ethereum have no idea that there are important differences in their capabilities and technology.
All the smart but non-technical people I know or read commentary from talk about cryptocurrency as a single thing, where that thing is just different flavors of Bitcoin.
It's still to much specialized to follow what's going on from a higher viewpoint.
This seems like saying that Chef terminology is standard. It might be internally consistent with its talk of recipes and ingredients and whatnot for imaging machines. But this terminology is not standard because it’s meaningless to someone who had experience with a different imaging platform.
Ignoring that, it's nuts that the best practice is "send a little money, and see if it works". Apparently they don't even have a working transaction simulator that just runs the relevant logic on your laptop so you can see what it will do.
We need to re-write this in Rust before there can be universal acceptance!
I haven‘t tried it, because I don‘t do much crypto stuff at all, but I thought this specific functionality, to dry-run any scenario, from any account, was very intriguing.
The contract is going to be at a different address, all the accounts involved are entirely different, the state of the contract is different. Even proving a contract at one address is the same as the contract at another address is non-trivial.
Pretending the existence of a test net proves anything is a lot like pretending the availability of source for your OS, compiler and dependency stack proves something. Maybe possibly for a professional with unlimited time, but that's it.
That's what I did the first time I did a bank transfer between two of my banks accounts. Maybe that's just me being paranoid but when sending money I like to test it first.
This passes the "does it sound like email?, it might be decentralized!" smell test, anyway.
several of these projects will set up a local chain with presets to test exactly this. probably worth doing before sending large amounts to random contracts.
If you're going to slush a cool half mil around, you should really have absolutely basic litteracy of how this stuff works -- just how you should have the same litteracy about the banking system if you're going to half a mil there too. Or hire people who do.
"Just as trying to think up startup ideas tends to produce bad ones, working on things that could be dismissed as "toys" often produces good ones. When something is described as a toy, that means it has everything an idea needs except being important. It's cool; users love it; it just doesn't matter."
It's hard to reconcile my experiences with trying to get users to understand and use relatively simple things with the inscrutable nature of the crypto space. Crypto is overflowing with unwieldy acronyms and punishing rakes to step on. And yet, people are putting massive amounts of money into this?
https://protos.com/crypto-airdrop-tries-cover-ethereum-gas-f... Did you know about the token beforehand and made a sarcastic post on it, or was it just a pure coincidence.
I mean, Java class naming wouldn’t be any better but “WETH” is just extending a base class with an interface.
As ERC-20 runs on top of ETH, it requires gas (paid in ETH) to execute the contract. But ETH itself is not ERC-20 compatible (after all, it's just the base layer; there's no "ETH contract"), so some folks came up with the idea of wrapping ETH into an ERC-20-compatible contract, thus giving birth to WETH.
The advantage is that now ETH (in the form of WETH) can now provide interoperability with the rest of the standardized tokens, including staking, lending, or anything else implemented via a contract. Pure non-wrapped ETH would never give you that; basically you can send your ETH to someone, and that's it.
Now, the weak link is that you're relying on the trustworthiness and the quality of the implementation of the contract, which - more often than not - is questionable. The WETH contract itself is pretty simple, with only 62 lines of code [3]. But one may argue it's overly simplistic, and they failed to implement basic safeguards, like sending WETH to itself, which is what caused OP to lose half a million dollars.
The other side of the argument is that WETh contract was simple by design. Every line of code in Solidity requires gas to execute, so adding even a basic checking to protect against what OP did would have increased the cost by millions of dollars in aggregate fees for everyone else, besides potentially introducing the risk of attacks or additional bugs.
Given that only ~250 WETH transactions[4] (out of 5,562,041 total tx), made the mistake OP did, one could argue that the design wasn't that bad. That's a 99.9955% success rate.
(to be clear: if I were the original WETH developer, I would have added the checking, in spite of costing a few additional bucks for everyone else. But I understand why someone may have thought otherwise. Besides, it was 2017; a lot has changed since then)
[1] https://ethereum.org/en/developers/docs/standards/tokens/erc...
[2] https://www.investopedia.com/news/what-erc20-and-what-does-i...
[3] https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead...
[4] Mentioned in the reddit thread; have not confirmed myself.
Unfortunately, practically no one uses 777 as far as I'm aware? Certainly the OG Wrapped ETH contract doesn't, and it can't be upgraded because it's immutable.
But one simple check in the transfer function would have saved this person half a million. I would gladly pay that tiny extra bit of gas for their sake.
I wonder how the math shakes out over time.
We see how that plays out all the time. Something shiny and new is produced but it completely fails to take into account why the original system was so complex. Given enough time, it becomes just as complex as the old system, if not more complex.
It's like the famous quote by some dude: "A monad is just a monoid in the category of endofunctors, what's the problem?"
Therefore anyone looking to do anything other than gain speculative wealth should stay well away.
Another one born every minute...
This machine also allows you to send these wrapped dollars to other people - it just subtracts from your balance and adds to the other person's.
What this guy did is transferring his wrapped dollars to an address no one controls instead of withdrawing as he should. This address was the machine's address, but it's not programmed to handle the balance in it's own account and it runs code that can't be upgraded, so any values sent there are lost.
In this example dollar = ETH, wrapped dollar = WETH, machine = the WETH smart contract.
The real problem here was thinking a ETH transfer (dollar bill deposit in the example) works the same as a WETH transfer (database transaction in the example).
The Ethereum blockchain has its own money that is built right into "OS" of the blockchain. It's called ETH. Any time one program calls another, the actual function call itself can send ETH along with it. In fact, to transfer ETH from your account, you just make a function call to another account with no parameters, ignore return values, and transfer some ETH along with it.
Now it soon became apparent that this scheme left a bit to be desired:
First developers wanted to create their own moneys. ETH is hardcoded into the system, no one else can use that mechanism.
Secondly, funds can only be sent, never pulled. It turns out that it is really convenient to have funds pulled by trusted programs. It allows funds to be moved when you are not online. For example, you could make an offer to purchase something, and if the seller accepts, the money can be transferred to seller, and the whatever can be transferred to the buyer in the same atomic transaction. This also allows trusted programs to do the math for you using live market conditions.
Lastly, it's a giant security pain to actually have to call someone else's code, and give them the ability to execute right in the middle of the your code, any time code wants to transfer money. (This exact vulnerability lead to the first big hack on Ethereum.)
After a period of experimentation with people making their own money programs, the ERC20 standard was born. This standard is just a very small set of methods calls that a program has respond to in order to count as money. This isn't baked into the OS, it's just a standardized API interface between programs.
So you can call "transfer(...)" to move money, and you can call "balanceOf(...)" to find out how much money someone has etc. It works reasonably well.
The biggest ERC20 you have probably heard of is USDT / Tether. It actualy slightly predates the standardization, and so slightly doesn't match the behavior of everything else. This makes all programs that want to move money have to use a function that checks if the money is acting like USDT or acting like everything else.
Now the ecosystem has two kinds of money: ETH that works at the OS level, and everything else that works as a standard program. And these two have different security properties, and different ways of calling them. It's a pain to securely support both of them because the entire architecture of your code for working with them entirely different. And then there's the matter of not being able to pull ETH, which people often need.
So people decided to make a program that "wrapped" up ETH into and let others treat it as an ERC20 program. It's called wETH. You send the wETH program some ETH, it holds it, and it internally stores that you now have an amount of wETH to match the ETH you sent in. You can then spend it like any ERC20. Anyone can then ask the wETH program reduce the amount of wETH they hold, and give them back a matching amount of ETH.
Most new big blockchain programs, DeFi/NFT/Multichain bridges have switched over to only using ERC20's and requiring users to wrap ETH into wETH to use them. There's even talk/grumbling that the Ethereum blockchain should just provide a special interface allows someone to treat their ETH balance as ERC20.
Is this a bug or a feature?
Here's the path I'd suggest:
1) If you have no basic understanding of blockchains, read Satoshi's Bitcoin original paper, and Ethereum's Yellow paper.
2) Read about ERC-20 [1][2], to understand what "tokens" really are (TLDR: basically a hashtable stored in the ethereum blockchain, containing a mapping of balances to addresses, and the expectation that you must implement a standard API to be considered an ERC-20 token)
3) Learn about Solidity. The language is dead simple if you have any programming background (preferable C, but not too different than Rust/Python/Go), although it takes some time to wrap your head around the idea that the state is stored permanently in the blockchain. There's plenty of tutorials, but I found Ivan on Tech [3] to be excellent, and Moralis Academy [4] if you want something more structured (plus they offer many other courses in this area).
Solidity documentation [5] is also excellent. And Remix IDE [6] makes it really easy to experiment and run your "hello world" solidity programs in a simulated environment, without worrying about deploying to testnet, faucets, etc.
[1] https://ethereum.org/en/developers/docs/standards/tokens/erc...
[2] https://www.investopedia.com/news/what-erc20-and-what-does-i...
[3] https://www.youtube.com/watch?v=ILw-7mplRlI&list=PLo0ddf4DBU...
[4] https://academy.moralis.io/
This user unfortunately did neither.
Getting out of the supposed user-opacity of legalese to something that was safe and reasonable for a non-elite-priesthood users to understand, trust, and interact with directly without an intermediary was, I thought, the whole allure of smart contracts over using the old-fashioned dumb kind to manage transactions and business relations.
I think this more a story of poor risk management.
But they are in good company. I was on the Bear Stearns trading floor when they went bankrupt and I saw a hundred people loose their entire life savings and all their kid’s college money in a few hours. Those were licensed financial experts that were fully knowledgeable and practiced in a variety of risk mitigation techniques - which they failed to apply to their personal portfolios. The company was bought by JPMorganChase and a year later everyone that came over from Bear was gone - JPMC really just wanted the client list and their midtown office tower.
Like, if the contract for the ERC-20 token would, when handling a send instruction, would check whether the recipient address was a contract address or an address controlled by a keypair, and if the former, would check if the recipient had been marked (not sure if this marking would be stored as data on the recipient contract or as data on the ERC-20 contract) as being able to handle the token in question, and if not, cancel the transaction (other than gas costs).
This seems like it would prevent this kind of error (or at least, reduce the problems resulting from this kind of error to just paying the gas fees), but it would also maybe increase the gas cost of sending transactions with the ERC-20 tokens and I’m not sure whether this increased cost would be negligible or not.
ironically this seemingly would actually bolster the argument against Proof of Work, but its probably more convenient that people are easily swayed towards inaccurate arguments
I'm not very well versed in this stuff, but surely the tokens he sent are somewhere right.
Like if you sent $500k to a bank but put the wrong account number in, the $500k would still go _somewhere_. It might be difficult to recover, but it's not like the money just disappears.
Hopefully this isn't the person's life savings.
The only way to ever fix this is to rewrite the history of the blockchain which means forking the entire ETH currency by getting all mining/record nodes to agree to it.
Long story short: Virtually unrecoverable without large coordination from the entire ETH community.
In order to select these judges, the community can elect them directly or elect a board or leaders to select them indirectly.
Of course these corrections would require gas, so they may need to add a small additional gas charge to transactions to fund this group and perhaps also their salaries. We can call this extra gas a "tax".
In summary: Stand up an entire government around ETH in order to ensure the benefit of judges and humans can override code. Once you do this though, you have a central ruling authority with an in-code constitution, but parts that take place in a human judgement realm.
I set this up partially in jest of blockchain currencies in general, but I do actually say this seriously. I think that purists of decentralized code only control will hold back any possible benefits that cryptocurrency could bring. The situation above still has benefits from a monetary fiat system run by a nation state, though I think severely less than what the cryptocurrency ideal is. Some include:
- There is no nation state attached to this centralized ruling body and itself can be decentralized and beholden to no nation
- All transactions and reasons of the body can still be public and on open API's for people to integrate and monitor with modern tech
- The loose "untraceable" or general "freedom" arguments that come with a blockchain would still hold so long as the community with these tenants maintains control of the board / judges / leaders.
A banking-grade currency would have reversed the WETH transactions and prohibited new ones. Ethereum has refused so far to do so, even though it’s in their power to hard fork. Whether or not you view them as a currency, that’s not the sort of behavior that engenders a perception of financial trust and safety in their work.
Lets imagine, hypothetically, that some mafia boss, big company, users would create a lobby, the "platform of people affected by Ethereum" that would lobby to force a fork for a fee. Lets say 50% percentage of your lost money if we are successful, that is still much better deal than having no money at all. And then would use some tool to convince/coerce/bully everybody to restore it or just would mess with the process to force it. Would be this possible or a probable outcome after enough amount of time has passed?
Thst said, the network is a group of machines all agreeing together on what is the correct behaviour, and that can change, so while it is not impossible forever — Ethereum might release a new feature that allows people to reclaim tokens in this circumstance — it is impossible unless the majority of the network agrees (see: The DAO hack and the corresponding fork to recover funds).
it sounds to me like the fix would be create a new map that maps account ID -> tokens, where account ID = the "sender" account where the tokens came from, and do the migration to move these 'orphaned' tokens into the right buckets.
admittedly I guess that would break everything/trust if someone can just rewrite the code to say who has what tokens!
Additionally, apparently contracts may rely upon one another, and a bunch of the contacts that utilize this WETH token depend upon the existing contract. All of these (and their dependents, recursively) would also need to be updated.
I.e. the money is gone unless there is a large concerted effort, but no one should reasonably expect this.
A defining feature of "smart contracts" is that the code is immutable once deployed, and can never be upgraded or bug-fixed.
But yeah you're definitely right about the nature of the contracts being immutable, unless that immutable code contains some setter that delegates the function calls to some other contract.
ERC-721 (NFTs) actually has a nice way of dealing with sending NFTs to an incorrect address by checking if it implements a special interface if the recipient is a smart contract. But any measures come at the cost of extra gas so they are usually avoided.
It's been quite a long time since I have been playing with smart contracts and I don't actually remember what happens when a smart contract is created.
There would seem to be disincentives to prioritising fixing problems like this that affect unimportant people.
It strikes me as valuable to the crypto world that the mainstream media criticism of cryptofinance is that it is environmentally unfriendly. That is almost a distraction from the fact that it is antisocial and nihilistic.
Yeah, that's what we call "disappeared" in English.
Imagine you ran a private currency called Mate Dollars (M$) for you and your mates to exchange with each other "off grid". You decide to introduce the concept of loans. A transaction which lends 1000M$ to MateA would look like this (in ledger[0] format):
2022-01-30 Loan to Mate A
Accounts:MateA 1000.00M$
Liabilities:MateA -1000.00M$
2022-02-01 Goods
Accounts:MateA -500.00M$
Accounts:MateB 500.00M$
Eventually Mate A will have to pay back his loan because the bank (you) will charge interest on any current liability:
2022-02-30 Loan repayment
Accounts:MateA -1000.00M$
Liabilities:MateA 1000.00M$
Now from inside the system, nothing was ever created or destroyed. But from outside the system (ie. the real world) it looks like money was "created" at "Loan to Mate A" and destroyed at "Loan repayment". From Mate B's point of view, Mate A always had that money. He doesn't know anything about the bank loan.
Between those two transactions, 1000 Mate Dollars existed, but it was just a ghost in the machine.
Replace "you" with Barclays Bank, "Mate Dollars" with Pounds Sterling and "you and your mates" with the public above and you now understand how "real" currency works. 97% of money we use is just a ghost in the machine between a bank creating it via a loan and the borrower paying it back.
So, you see, money appearing and disappearing from thin air is not a feature of crypto at all. It's just an illusion. It's what it looks like to anyone outside of the ledger (ie. everyone except the bank).
The ETH transaction is the equivalent of you (the banker) making a promise to Mate A to keep his money in an account that can never be accessed by anyone, including him:
2022-01-30 Silly transaction
Accounts:MateA -1000.00M$
Dungeon:MateA 1000.00M$
Unlike you, the Ethereum blockchain is incapable of ever breaking this promise.
So in your example Dungeon:MateA is a balance for the other side of the transaction - it does exist, there's a record of it. The money/tokens/matebucks have not "disappeared", but the mechanics of the "promise" means that nothing/no-one can do this operation
2022-01-30 Silly transaction
Dungeon:MateA -1000.00M$
Account:MateA 1000.00M$My main point with this is this is how the current money system works! People seem to think money can disappear in crypto but not in the real system. In fact it's quite the opposite. In both systems from the ledger's point of view nothing can appear or disappear. But in the current system, since the ledgers are controlled by private entities they can make stuff appear from the public point of view by creating loans. In crypto the ledger is not controlled by anyone.
Essentially the big problem with finance currently is the people who control the ledger are also allowed to create loans inside the ledger! It's a huge conflict of interest and obscenely privileged position.
But this ship has sailed for ethereum!
As I've said in the past, money is a technology, and this kind of override mechanism is built into the design of conventional money, but not into the design of crypto.
I don't think it seems so great though...
The purpose of requiring energy to operate the network is to have something at stake when enforcing rules of the system. You could have unlimited or even arbitrary inflation of the currency while still requiring proof of work.
Hence, the rule that is being enforced by PoW here is that sending to a "wrong" address is not reversible.
This is like saying because shoes happen to be worth money (sneakers/trainers) and because people happen to speculate on the price of shoes that the future of money is shoes.
Bitcoin claims to be currency, Ether (used to pay for execution fees on Ethereum) does not.
- If you're making a transfer somewhere with a large amount, do a small transfer first and verify it's working. Confirm at the receiving end before moving big sums.
- If you're calling a contract, try it with a small amount first. Verify the parameters multiple times, and verify the return values multiple times.
- If you're doing something with a huge sum of money, do it in steps instead of all-at-once. Fees won't be as big since you're already dealing with a huge sum of money anyways
- Verify verify and verify that everything went alright with the small sum before trying to do something with a big sum
- If you're tired, don't do it. Wait until you got some sleep
- If you're rushed, don't do it. Wait until you're not rushed, have a tea and think about it
- When in doubt, verify it and don't be tired
- If you're not an expert, have someone who is do verification above for you
I would modify this to
> - If you're not an expert, have someone who is do verification above in addition to you (not instead of you)
exchanges would take ETH without wrapping it
[1]: https://www.theguardian.com/money/2019/dec/07/i-lost-my-1930...
That was a story because it was an incredibly unusual set of circumstances that meant they didn't get their money back - the bank owed the recipients money to repay a loan, and as such the money sent could easily have been a prepayment of the loan, which often happens before legal action is started, as happened a couple of days later. There was no way to distinguish an intentional action and a mistake here, hence the court ruling in favour of the recipient.
But the best way is to use a trusted contract.
The other ways are pretty absurd burdens to put on a user.
After reading Moxie's blog post on web3 [1] I feel it is a stretch to call anything Ehtereum-based decentralized anymore when this many applications use Alchemy or Infura as providers for their Ethereum nodes.
[1] https://moxie.org/2022/01/07/web3-first-impressions.html
- exchanges
- mining pools
- mixers
- oracles
Also, core devs and all stable cryptos are "centralized" by definition. This whole ecosystem is just cancer to a traditional society. It's not an evolution.
It certainly puts words to my feelings around current "crypto" trends as someone (probably like moxie) that still remember the first wave of cypherpunks[1] and dreams of digital currencies.
It feels strange when a lot of smart people insists on something that's obviously false in a practical, real-world sense - and it's nice to see someone else shine a light on that, and explain in simple, correct terms what's actually going on.
I wonder if there are any emerging systems that are more likely to realise the idea (ideals) of digital currencies and smart contracts?
I had hopes for etherum, but now I'm thinking that if we'll ever get there, it'd be in the next generation (call it third generation, bitcoin being first, etherum second - and earlier things generation zero).
I'm thinking it would be proof-of-stake, and somehow viable as real peer to peer, or split in a more sane way between infrastructure and "wallets".
[1] See eg this for a summary and some pointers https://nakamoto.com/the-cypherpunks/
If your response is “oh well you should have been more careful about that”, congratulations on endorsing the very same defense crypto enthusiasts were giving and validating that they’re not all that different.
I guess my take is that all crypto transactions have properties strictly worse than the worst type of bank transfer. In addition to being irreversible when you initiate them, they are also irreversible if someone fraudulently initiates them on your behalf. And there is no more secure option that you can use with crypto. There is to my knowledge nothing in the crypto space with security properties similar to an ACH transfer.
It’s kind of missing the point to focus on the narrow issue of “can you accidentally destroy money in the conventional banking system?”
No it isn't. That's a huge difference. On the contrary, focusing on “Shit happens in the conventional banking system too!”, that's missing the point, IMO.
In both conventional banking and crypto, yes, there are situations of “sorry, you’re fucked, but like, you’re just supposed to know not to do that” (where “that” is send wires you’re not 100% sure of or guard your physical cash carefully).
No offense, but you really seem to be drawing the abstraction boundaries poorly here.
But that's an accident or intentional vandalism by a user of the system; it isn't built into the system itself.
> In both conventional banking and crypto, yes, there are situations of “sorry, you’re fucked, but like, you’re just supposed to know not to do that” (where “that” is send wires you’re not 100% sure of or guard your physical cash carefully).
In conventional banking the “sorry, you’re fucked” situations don't destroy the money banking is all about handling.
> you really seem to be drawing the abstraction boundaries poorly here.
My "abstraction boundary" (if I understand the term correctly?) is: A system that can have parts that do this -- destroy the very thing it's supposed to handle, "money" -- is a crap system. "Yeah, but you can burn cash!" (vandalism) or "Mistype an account number and the money is lost (to you)!" (not destructive) are not system critiques but whataboutism.
Currency-changing ATMs (do such things exist? If not, why not?) or vending machines like for petrol don't have built-in banknote shredders.
[Edit: Left off half a sentence, screwed up emphases.]
That's when some of them were themselves invested in the Dao...
A bug and reversal occurred in the first few years of Bitcoin's existence that has effectively meant that Bitcoin won't reach the stated 21m coins exactly.
It's guaranteed at this point that there won't be any further reversals.
What if a new bug is found and someone moves all coins to some impossible address?
Bitcoin has the same problem, and cryptocoin enthusiasts are fooling themselves if they think that miners won't raise the 21m cap when the end of Bitcoin rewards start looming.
We found out with previous Bitcoin forks, how influential companies and miners are. 21M is non negotiable, and which stakeholder would want to dilute themselves?
When it comes to miner prerogatives the day is never done, they are the sole arbiters of what "winning chain" means, and when they are incentivized to act in unison their will is indomitable.
> and which stakeholder would want to dilute themselves
Miners. Based on your definition, "stakeholders are diluted" every time miners make money, so if the choice is between continuing to make money or not, it's pretty obvious what decision they will make.
I suppose there's a possible future where the miners do nothing and bitcoin transaction fees skyrocket in response. At that point I would expect a mass exodus to altcoins with cheaper transaction fees, but I don't see the miners acquiescing to this future.
This has actually already happened with Monero. The mining reward schedule was much more aggressive in it's diminishing returns. Once the mining returns cross a threshold of not being able to sustain the cost of mining things dried up very quickly. Devs jumped in and added Tail Emission [1] so that all blocks have a fixed reward of 0.6 XMR that will never change or go away.
[1]: https://www.getmonero.org/resources/moneropedia/tail-emissio...
This also lead me to this video which will now be my ‘go to’ recommendation for anyone asking about crypto and NFTs - it’s a general critique and social commentary of the issues with crypto - not specifically about this case, but I thought excellent, and the first time I think I’ve watched a 2hr vid on YouTube ‘Line goes up’ - https://youtu.be/YQ_xWvX1n9g
That seemed obvious from the first time I read the expression "code is law".
If code is law, any bug (whether in the contract itself or in the way the contract is called) fucks you irredeemably and with no recourse. I would expect any dev to shit their pants at the idea, even more so upon realising that the code in question is a half-assed brain damaged cousin of javascript, of all thing.
Contract law is one of the more mechanistic parts of the legal system, but only up to a point. There are good reasons the legal profession - even corporate law - tends to attract a different set of personality traits to software development.
E.g. if you sign a contract while hanging off a cliff to give some dude all your assets in exchange for being pulled up, it is invalid in my jurisdiction.
Or if the people signing the contracts did not actually understand what they were signing it can be considered invalid (which would be akin to the mess in TFA).
Contracts are better left to people, rather then computers.
So it's not just your jurisdiction, it's probably at least half of the entire world and I imagine even systems not based on Roman Law have something equivalent.
The legal system is such a quagmire because figuring out what is "right" in all scenarios is anything but obvious. That's how we end up with laws we don't enforce and technical legal behavior that will still get you into trouble. But what's the alternative? Robot justices? No thanks.
If the complexity is in the nature of the problem, then smart contracts must contain all of this complexity. But how can you ever write smart contracts that are bug free and deal with every contingency?
Instead of making systems that are buggy, cold, and unforgiving we should be making systems that are more tolerant of human mistakes.
I'm not sure if issues around smart contracts are just the tooling, or developers are just rushing to push something out there; but the UX and DX is bad. I was hoping that Cardano would be a blockchain/cryptocurrency pairing that would make me interested again in this space, but their Plutus smart contracts[1] are something I wouldn't touch with a 10-foot pole. On the upside, at least testing Plutus smart contracts with QuickCheck seems to have brought improvements to QuickCheck itself[2]
[1] https://playground.plutus.iohkdev.io/
[2] https://www.youtube.com/watch?v=V9_14jjJiuQ a fun little watch for those that like Haskell
This was the related section https://youtu.be/YQ_xWvX1n9g?t=4637s that lead me down the rabbit hole of watching the whole thing
I have no connection other than stumbling across it after seeing this story today and thought the critique tied in well.
The issue is that people do like tunnels because they feel safe, and empty voids are scary. This incentives to still build and use tunnels around this void, which makes “crypto”-ness just an implementation detail not worth using as is by the masses.
Afaiu, this happens for two reasons: 1, the usual, people tend to forget assertions. 2, the new one, crypto institutions who make contracts are incentivized to omit assertions because runtime now costs serious money. They are like factories where there is no rule of safety yet.
Is the above correct, or is it a true half a million dollars mistake? You can’t trust node_modules as it seems, how can you trust piles of contracts code when there is no support, no takedowns of bad versions and no easily accessible (and decentralized?) audit?
Also, could a type system help in this case?
You can totally make a 1 digit typo while making a bank transfer that results in all the money being lost.
Perhaps you’ll recover it after years of litigation, but that’s really not guaranteed.
https://www.theguardian.com/money/2019/dec/07/i-lost-my-1930...
E: downvoted by upset bankers? :)
Of course you’re more likely to succeed when it’s real money and the other party has to worry about getting sued.
But even in the case of a bank transfer, the other party can abscond with your money and it’ll be extremely hard to recover since law enforcement probably won’t help you and (especially international) litigation costs can quickly render such an endeavor far too expensive.
To everyone: If you wrongly send money to a mistyped IBAN it is gone.
Plus banks in Europe have a transfer reversal grave period so you just call them and they'll most likely be able to undo the transaction.
> The IBAN check digit consists of two digits in positions 3 and 4 of the IBAN. It is calculated using the MOD97 algorithm and provides the primary integrity check for the IBAN standard.
Very unlikely, the checksum would prevent that.
And most banks (even though I’m unsure it is mandatory) will check the recipient, if totally mismatched a warning will be raised.
But if you send money to the wrong iban+recipient, the money is gone.
It is very unlikely that law enforcement would help you in a situation like this, especially internationally.
You clearly have no idea how an IBAN works. It has a checksum exactly to avoid mistyping.
And even if you send the money to an valid, but wrong, IBAN then one of two things happens:
* The account doesn't exist -> transaction bounces * The account does exist -> ask for money back, worst case go to court to recover it
But the money is not gone. There are no black holes just swallowing everything up.
[1] https://www.betaalvereniging.nl/betaalproducten-en-diensten/...
And besides, big banks still have to deal with checksum-passing iban typos on a daily basis. IBANs only have two check digits.
Citation needed.
This is overly simplified so not entirely accurate, but if 100 customers typo their destination IBAN the modulo 97 checksum will probably let 3 of them through.
Actually the checksum was designed especially to deal with typos. As such, dealing with typo errors is usually not an issue at all.
What they do have to deal with is maliciously created IBANs though. However, if the account an IBAN should point at doesn't exist then the transaction usually just bounces.
That's the thing - they can deal with it. There are fallbacks.
In crypto, your money is just instantly destroyed.
They’ll ask the other bank if they’d like to return the money, and that bank will maybe ask the recipient if they’d like to return the money.
The recipient doesn’t want to return the money? You’re SOL. You can go to court, but they can trivially evade civil action by transferring the money overseas.
You can certainly pursue the matter in civil courts, but law enforcement does not like to touch this kind of stuff at all. If the recipient transfers the money overseas, you will most likely never be able to recover it.
As a result, if I received a large amount of money that I coulnd't explain, I would contact the sender or the bank first. I can't just spend it immeditaly and claim that I had no idea.
You can go to court and get a judgement against someone with no assets to collect. In the end you’ll just have lost even more money.
[0] https://www.psr.org.uk/publications/consultations/cp19-4-con...
In the crypto case of this thread, the OP made a mistake and there's no process to fix it. 100K's lost. There's no avenue for recovery.
In the banking case of your link, the man made a mistake and was able to correct it, despite the bank working against him. 100K's lost and recovered.
In the case of the bank, it sure wasn't perfect and definitely should be better. But ultimately, the bank not only paid to recover the money, but the banking system (according to the article) is at least promising a fix for the underlying issue that a simple mistake in writing digits can lead to missending funds.
Also: crypto is touts its trustless nature as a positive. But note that trust is the lever Mr. Teich used to get Barclays to pay the cost of recovering the funds. Barclays only paid after their reputation was threatened, and of course, trust is based on reputation.
Difference being that it isn't "lost" -- not in the sense of vanished from the face of the Earth, gone, ceased to exist. It's only lost to the sender, but it still exists; someone still has it. Sure, the wrong person or entity, but still: It's not gone from existence. Only CryptoCrap does that.
Which is in fact required with cryptocurrencies using the (pure) Mimblewimble protocol.
The last time I asked Coinbase support they didn't even bother to answer me.
I was not investing, one of my contractors unilaterally decided to pay me in crypto.
Why didn't you tell him that you wanted to be paid in real money?
most users never have to deal with the WETH contract because defi platforms will automatically do the wrapping/unwrapping for you.
the vast majority of the WETH minted by this contract is used for
a) providing liquidity on DEXs (where ~ 50% tokenA and 50% tokenB are deposited to collect trading fees)
b) collateral in a lending platform (e.g. deposit WETH and borrow USDC)
c) bridged to another chain (e.g. bridge WETH to Avalanche or Solana or whatever)
Like the people that have made them self a fortune on crypto need to understand that it is psychology a different thing to put fresh money into the system from just extracting profit made from almost nothing.
Some ERC20 tokens implement this but I believe many do not.
So in the end regular user probably ends up doing everything on centralized wallets or exchanges and then those are likely to do some off-chain book keeping as that is cheaper... Brining us back to banking...
Friendly heads up - this isn't a word, and also happens to be one of those slip-ups that people will judge you extra hard for. Say either "regardless" or "irrespective".
Feel free to disregard my advice, though; it's no skin off my nose if you don't want to sound like a "native, educated speaker".
>We label irregardless as “nonstandard” rather than “slang.” When a word is nonstandard it means it is “not conforming in pronunciation, grammatical construction, idiom, or word choice to the usage generally characteristic of educated native speakers of a language.” Irregardless is a long way from winning general acceptance as a standard English word. For that reason, it is best to use regardless instead.
Like I said - I really don't care what you do. I'm just trying to be helpful. Use "irregardless" and people will judge you. If you want to die on that hill, be my guest.
The problem is that you think trying to sound smart by interrupting a conversation with irrelevant factoids is a "good deed". Maybe some introspection is appropriate here.
A word is a thing people say. If you say irregardless to somebody you're trying to impress, you will fail to.
A friendly correction of a non-standard word does not deserve derision.
How do you store your wallet / private keys where you would be comfortable storing an amount of money that's important to you?
It feels like a bunch of consumer grade options we have are kind of flaky:
Flash drives are extremely undependable. I've had a few fail to read after sitting in a closet for a year.
SSDs can supposedly have data loss pretty quickly if left unpowered (days to months).
DVDs have decent lasting power (I have some CDs that still work after 15 years) but this makes me nervous because it's so susceptible to damage.
HDDs also make me think what would happen if it's not powered on for 5-10+ years (it's mechanical, does it use some type of oil internally to keep friction down?).
Putting it on the cloud seems risky, even with encryption at rest and now we need to backup the encryption keys.
I guess tape is still our best bet?
Basically it still feels like a huge pain in the butt to keep digital currency secure and available. The more backups you have, the more risk you have around being compromised but the less backups you have the more susceptible you are to data loss and losing everything.
You can skip the hardware wallet and print the whole key as a qr code or just text in an ocr font.
Then there's no chance for hardware failure.
This has the added benefit that you can trivially create offsite backups as well: print or write another copy.
I'd want to keep it on in encrypted file but even that is sketchy if I have to have in on multiple clouds.
you: "sorry, i have a multi-sign wallet and the other signatory lives at the other end of the world"
thieves: understandable, have a nice day
Something something xkcd $5 wrench
(This technique has been used in real bank robberies; both of the people required to open Northern Bank had their families taken hostage https://www.theguardian.com/uk/2008/oct/09/northernbankrobbe... , and that was for a mere £28m in easily traceable physical money!)
Impractical for most but I supposed if you are protecting several million, it's worth the security.
https://github.com/nilcons/crypto-key-derivation
Crypto currencies will be worth jack shit in 10 years in all likelihood though..
Devices can be permanently geographically distributed, protecting from disaster in any single location. This is superior to shamir’s because it never requires the single all-powerful private key to exist, removing that as a single point of failure/compromise.
So far this is only 100% achievable with Bitcoin as far as I know.
I personally use:
- Primary -- hardware wallet with memorized PIN
- Backup -- seed phrase memorized
- Backup -- seed phrase written on paper
- Backup -- seed phrase split into pieces using Shamir's Secret Sharing, written on paper, stored with friends and family members
SSS is precisely the sort of "wow sounds awesome" thing that would capture the attention of geeks without really deeply thinking about the most likely failure modes.
With BIP-39, you are simply going to lose your wallet, eventually. It's almost inevitable. Either because you lose the 12- or 24-word passphrase, OR because someone else finds one of your backups.
I've written a decent Python implementation, here, which is simple enough to review:
I don't play in this world, but if I did, I'd note that the actual keys required to define a wallet are trivially small and comparatively easily re-entered at a keyboard by hand. If you're got millions in this stuff that you need to park, delete it from the internet, print it out, and stick it in a safe.
In Europe you have to go to some central bank to get such a service, I don't think medium cities branches do that.
What? No. It's absolutely normal even in very small towns (~ 5k). Also, post offices offer the service.
You can get a PO box but it is not a safe deposit and would not keep there anything valuable for longer that a day or two.
Getting a box in the bank on the other hand was tough as I was looking for it in Poland/Netherlands/Germany, banks don't care and it is more hassle for them than it is worth.
Example CAF case: https://www.google.com/amp/s/www.latimes.com/california/stor...
Example bank fuck-up: https://www.nytimes.com/2019/07/19/business/safe-deposit-box...
I wouldn't. I'd give it to an insured institution in my local jurisdiction to look after. It's not a perfect solution but it doesn't rely on the horrible impermanence of IT.
See slide 27 of https://www.snia.org/sites/default/files/SSSI/NVMe_SAS_SATA_...
A company might have a "5 of 8" multi-sig. This means that to move money, five of the eight team member accounts with keys have to agree and sign off on each transaction.
This is massively better than secret sharing - once a secret is put together, that secret then works for all time and could be stole by the person that put it together. By using multi-sigs, every new transactions has to be agreed on.
With a multi-sig, if you forgot your hardware wallet's PIN, or lost it, then other team members can remove the old account from the multi-sig and add the new account. You are back in business.
When you backup a single account's key to paper or other computers, then anyone getting access to one backup compromises the entire thing. However, with a multi-sig, an attacker would have to gain access to many of the signing account keys to steal funds.
This scheme works for individuals too. You could have a 2 of 4 multi-sig wallet, two hardware wallets that you usually use for authentication, and then two backup paper keys stored in different locations. For your normal use, you just use your two hardware wallets. If you forget a password / lose one, then you can use one of the paper wallets, plus your remaining hardware wallet to get it back. If you loose both, use both paper keys. You can also rotate the paper key backups if you want, by removing the old and adding the new.
There are no pesky externalities like "amount of EBITDA per outstanding eth", every single dollar is coming from someone buying in.
This reduced the denominator, thus increasing the value of eth.
[1] https://stark.mirror.xyz/q3OnsK7mvfGtTQ72nfoxLyEV5lfYOqUfJIo...
If you were to include block rewards as a negative cash flow, then Ethereum would have indeed done a negative EBITDA of around $3b. That will change with PoS, which drops issuance signficantly.
Of course in principle you can reverse this. Nobody is going to want to do the codework to recreate this wealth, it would cost a lot more than $500k and has consequences. I'm told some models include a way to un"oops" the signature chain but they beg so many questions.
OK. Let's be honest, the entire model begs many questions. I am sure people here will use this to both back, and belabour Etherium and contracts (as I have done, I'm not unaware how partisan I am on this)
Mark Latham, the former leader of the Labor party of Australia (he is an utterly repellent man otherwise in my view, but I admire a good writer) has a fine way with words, and referred to his opponents as "a conga line of suck holes" [0]. I've always felt this is applicable to the chain.
[0] https://en.m.wikipedia.org/wiki/Mark_Latham#Labor_member_of_...
In what country?
Here's the Australian rules after a significant bushfire. Partial re-imbursement for up to 80% loss of the face of the note.
https://au.sports.yahoo.com/bushfires-burnt-your-cash-heres-...
The point I was trying to make is that the actual value of the exchange is not only visible, its entirely visible. The specific value can be proved. If this was analogous in real world currency, Claim for loss would be possible.
No, >50% of the same bill or proof of destruction of the remainder is requested not because of serial number dependency (you can have that much without the serial number), but because with either of those, you can be sure that the same bill isn't replaced twice, or replaced but still usable.
Instead of just saying "what address should we send this to?", they should have code which allows a "preview" of what will happen after the transfer.
After all, all the logic is there on the Blockchain, so the client can easily pop up a warning saying "what you are trying to send will be permanently unspendable. You can't so this without the --i-want-to-destroy-my-coins flag".
The preview logic could recognise various common smart contracts to give the user a better idea what the spending conditions for each are too.
Even my bank that has a REST API would probably tell me where the money went, instead of “it’s gone”.
Certainly client and wallet UX can be dramatically improved to mitigate these problems. And education more generally about the risks of interacting with smart contracts, which there are many.
Would binance not allow me to send WETH to that wallet?
Would any decentralized/centralized wallet be safer? Please tell me which?
Or should I not be sending tokens and just use coinbase and binance non-centralized features?
MetaMask also includes a "Swap" feature which is designed solely to swap one token (e.g. ETH) to another (e.g. WETH) and back. Others might suggest an exchange application such as Uniswap or OpenSea to wrap/unwrap.
MetaMask and other user-friendly wallets could take basic steps to recognize common patterns of mistakes (like sending tokens to a popular contract) and include additional warnings. Obviously there is still a huge risk to using crypto compared to just going to your bank and asking them to do financial transactions for you.
Anyway, I thought this comment by the OP was interesting...
I thought a test transaction of sending ETH and getting WETH back was enough proof. My mistake was that I made an assumption about the reverse direction. Didn't see anywhere (including the official site) that we shouldn't directly interact with the contract and we have to use a dapp :/Because he sent funds to a contract (a program) and not a person (a private key). The operation of the given contract (the actual program) cannot be altered, which is useful in the sense that you can inspect the contract code and make sure that it does what you want with the funds you send to it.
Just don't let it happen to you
Thats the game! People like it, it goes awry upwards!
You have to call the `deposit` function of the smart contract (transfering ETH with it indeed).
And to withdraw your WETH as ETH, you call `withdraw`.
These calls can be made from here (power user interface! not recommended - use Uniswap instead): https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead...
The source code of the contract is here: https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead...
So, this is all about the ‘payable’ method, which means it is triggered by the native asset of the virtual machine.
If you look closely you’ll see there is a default anonymous function with ‘payable’ accessor method which calls the deposit() method
For more context I was messing around with Shapeshift back in 2018 which you generate a deposit and withdraw address for some crypto currency pair eg. LTC to Doge. I messed up this process.
These are not the words of somebody who lost half a million dollars, who in a regular non-crypto situation with a fellow person, a bank, a credit card, and so on, would be fuming at the mouth.
These are the worlds of a true believer, to a degree that this is cult-level scary considering the amount involved.
>A life-changing lesson for me
Doesn't seem like it was...
If you buy the wrong asset, you can sell it back and get most of your money back. There is a low friction “undo” button.
No such thing in crypto.
You can even end up owing more than your whole account is worth if margin is enabled.
But I’d have to be really unlucky and/or careless to really lose 20%+ of my money.
Whereas with crypto it’s so easy to lose 100% plus gas fees, all the time.
Not sure how likely is that scenario though.
"Harouna Traore, who was taking a class in Paris to become a day trader, used a demonstration version of British brokerage firm Valbury Capital’s platform to learn how to trade equity futures last summer, according to the Financial Times. He opened an account at Valbury with about 20,000 euros, or $23,000.
A short time later, he was at home practicing on what he thought was the demo, racking up more than 1 billion euros of orders in U.S. and European stock futures, and losing more than 1 million euros. Then, Traore came to the shocking realization that the trades were live."
https://www.cnbc.com/2018/06/21/trader-builds-5-billion-posi...
a) There is a company called "Applr", so I at least have something (a different stock)
b) There is no comany called "Applr", so the trade is cancelled.
This is like saying "You tried to be Applr, that doesn't exist, so you money just got blackholed".
I'm surprised there hasn't been something like this developed in the cryptocurrency space yet. Some sort of system where creating a wallet requires initialization before it can receive anything. Something like that would prevent most problems of typing in the wrong address because it would not be initialized.
The problem is that executing a line of code on chain is really expensive. Already quite optimised and stripped back code can cost 50-100 USD equivalent to do something fairly trivial, like swap one token for another.
Each of these checks increases the already high barrier to entry, and has little utility for the creators.
Smart contracts really shouldn't be called contracts - it's a misleading analogy.
He should get in touch with his banker, either in person, on the phone, or online. If that doesn't work, escalate to the appropriate regulatory agency.
Oh, wait... crypto.
Can't say I understand it now after reading it though.
To make a programming analogy, there are lots of systems which are "generic" over tokens — they can deal with many kinds of token, as long as it's the standard shape. Raw money doesn't have this shape, so WETH is a very simple "wrapper token". You can trade 1 ETH for 1 WETH and then use it in some token-compatible system.
The exchange rate for WETH is fixed by the (very short) contract, and it's supposed to be simple to trade money for tokens or vice versa — although given this poor sod's story, it's arguably not that simple after all.
Why the heck did the guy not first did a test with 1 000 USD worth of coins instead of 500 000 USD? Once he sees everything is cool with 1 000 USD, he sends the rest. Sounds like 101 to me.
This is a problem that needs to be figured out before crypto can go mainstream.
Soon there may be a "good version" of it that replaces a big chunk of anything financial and financializes another chunk of everything else.
Or maybe not.
I understand assigning a low probability to that event, but the upside is so big that it's still a bit weird to be just a hater and not make a lottery-ticket-sized investment.
Or I guess the chance of being able to tell randos on the internet "I told you so and they never fooled me!" in a few years if it fails must be a similar-sized reward in utility.
The general consensus has spun around to being that anything crypto is a scam, elaborate ponzi/pyramid scheme, etc, etc. Bored Apes is a bit silly, NFTs could technically be used for so much more but that would require the right platform, and legislative support (ie the backing of society) to have meaning.
I think the cat is out of the bag tech-wise. I think you're right that improvements will be made - blockchain / distributed ledger / whatever you want simply exists now, and I doubt it will ever stop existing. Ignoring the tidal wave of criticism it faces now, some valid, some not, it has inherent technological advantages in cases where trustless, distributed, peer to peer transactional events need to be rigidly catalogued and visible to all participants.
I also think most of these positive advancements that will change the fabric of society yada yada, will require the profit motive to be eliminated completely, where maintaining a blockchain becomes something done for ethical or moral reasons like folding@home rather than hoping to ride the next whale's massive pump. It's kinda sad how desparate we all are for riches, billions of us but the financial incentive is the best motivator we could come up with.
But I digress. Prepare to be shouted down over the next few months / years for saying anything positive about any blockchainish-tech, it's all pretty well tarred with the same brush as NFTs and dodgey doge market manipulation at this point. It'll calm down eventually. It is what it is. Probably a well deserved critique of a concept that is still at a point equivalent to computers in the 80s vs smartphones today.
Give it time. People will find a proper use for it.
He’ll be okay ;)
There are many more cases of this, someone else burned $300k half a year ago, in the same way.
$500K in ETH is really not that much anymore.
wrapping it lets it inherit those primitives for use in other programs more easily
many programs handle the wrapping and unwrapping just-in-time behind the scenes, using a chained method call to the same contract OP used
Its pretty hard to mess up, but OP managed to
Since everyone can see this is unspendable, It's simply a donation to all other users in the form of burning coins and increasing the value of all other coins.
Houses (and crypto) are worth actual cash. Burning them doesn’t increase the value of others in any meaningful way.
Burning Ethereum irreplaceably removes it from the pool. Ethereum is not inherently valuable, the Eth is just a token representing a contribution to the network, that you do not redeem it just makes everyone's Ethereum a little bit more valuable.
This is also why crypto is worth such ridiculously large amounts. Almost everyone is "HODLing", not redeeming their ETH for money, so the Ethereum that is in circulation is more valuable.
But he warmed the planet for no reason.