> I find this all a bit depressing. This is not the future of finance; it is the past of finance. It is a harsh world of naked caveat emptor; it demands the enforcement of trickery just because it was tricky enough to trick people. Consumer protection is a relatively new idea in finance; it has caught on because it is a good idea. You can debate how far the law should go in protecting people from the consequences of their own mistakes, but a world in which at least some mistakes are fixable does seem nicer than the alternative.
What I find depressing is the ongoing rationalizations around legacy business practices. It is these models that ultimately harm the consumer. Using weakly biased arguments that government or business is responsible for "protecting" the customer is ridiculous, especially in light of recent revelations of corruption in our government and business sectors. It's time for a change and there's not a damn thing you can do about it, Matt.
> Using weakly biased arguments that government or business is responsible for "protecting" the customer is ridiculous, especially in light of recent revelations of corruption in our government and business sectors.
I don't think it's even close to funny that someone could potentially have their entire life savings stolen because of some zero-day so luckily, not everyone shares your libertarian utopia dreams.
I believe that p2p currencies are here to stay in some form or another but I don't think they will supplant our traditional banking system.
So I hear you think it is serious that someone could have their life savings stolen. While I would agree with the fact it is a serious matter, I see a dissonance following it where you speak for my "dreams" being a "libertarian utopia".
Not only do you imply my political alignment, but you insult my proposal that we might improve our processes by embracing these new technologies instead of low trust legacy systems. In short, I think you are blaming me. I also think you are wrong.
I can't speak for others, but my idea of utopia is continued marginal improvement over the performance of the current solutions done with centralized control by starting to decentralize the bits that deal with trusted infrastructure. I don't expect utopia to be perfect. I don't expect it to be functional all the time.
The current problems with the DAO have very little to do with the base infrastructure provided by Ethereum. In fact, the hardware Ethereum is running on currently has even less to do with with the DAO. The point being that infrastructure boundaries can be assigned levels of responsibility to them. You want most of Ethereum's code managed by the guys who wrote it, at least for a while. They'll fix stuff where is needed, but their responsibility ends at the service level. The DAO code itself should be managed by other groups responsible for it. Perhaps there could be a third group that insures the investment in a DAO. And another that insures that group, etc.
Point being, social structures in place today are probably a good guide for instantiation of contracts that insure loss to errors in the code RUNNING ON TOP OF Ethereum. Ethereum promises immutable data structures for the runs. The runs themselves remain uncertain at some level, given all states of the contracts it issues may not be computable. It may be similar in nature to the dissonance you show in your statements - where some contracts literally get into an argument with themselves. If that happens, perhaps they get a gas tax for wasting other DAO's time with questions that can't be answered in a reasonable timeframe.
Commenting specifically on the DAO part of the article: What's annoying about the Ethereum hard fork is not that they are implementing their own version of consumer protection, it's that they certainly will not take the same action in the future when it's not their own money on the line.
This author did not do their research. They are likely quoting from a fake letter that is not from the actual attacker. I did not personally attempt to verify the signature, but others did and they report it being invalid.
An invalid digital signature is a pretty strong indication that it is the fake. I'd consider this poor journalism as it gives this letter credibility that it doesn't deserve.
My statement was merely to try and point out that one of his quoted sources is likely a fabrication.
IMHO The best part about today's note is this quote about Marissa Mayer
> Mayer grew up at Google, a lucrative and founder-controlled company that doesn't spend a whole lot of time worrying about shareholder activism, or shareholders generally. It's possible that Yahoo -- a mess with no controlling shareholder and a new CEO hired from the outside -- called for a different managerial mentality. And yet she was hired to be a visionary, not a bureaucrat, and to turn the company around. It's a tough spot to be in.
I think this goes a lot of the way in explaining why she has been so clueless about how to manage shareholders, which as a CEO of a public company, especially one that is attempting to execute a trun around, is really one of the most, if not the most, important job
Also I fully support Levine's view on the DAO debacle:
> find this all a bit depressing. This is not the future of finance; it is the past of finance. It is a harsh world of naked caveat emptor; it demands the enforcement of trickery just because it was tricky enough to trick people. Consumer protection is a relatively new idea in finance; it has caught on because it is a good idea.
I really don't want the future of finance to be caveat emptor. Again IMHO, Reason should come in and trump coding mistakes in financial contracts, if any blockchain startups reason the other way, then I think they've got it wrong. I really hope this gets to the courts as I think this might be the best thing that could happen to Etherium. In the same way that corporations setup in Delaware because the case law is known and well tested, having the courts rule on Etherium contract bugs might actually help the digital currency by giving it a bit of legitimacy and certainty around what happens when things go bad.
> Again IMHO, Reason should come in and trump coding mistakes in financial contracts
That's not reason; it's emotion. A smart contract is pure reason (i.e., logic); if one misunderstands a contract, then the error is one's own, not the contract's. And if others say, 'that's not fair: give him back his money!' then that's just emotion.
I'm not downplaying emotion (indeed, I think that as a mover in human affairs it's far more powerful than reason); I'm just arguing for clarity in words.
Code is not pure reason. It's an attempt to implement some of the concepts or operations of pure reason, so a machine can carry them out. Any such implementation will contain quirks and imperfections. Even pure reason contains paradoxes and strange consequences that are difficult to anticipate.
The process of engineering requires trying something, failing, learning from the mistake, and reiterating.
Your definition of reason is different than the law's definition of reason. Under your definition of reason, you'd lose your house because of a typo in your name on the deed.
Except that that was the whole point of smart contracts to begin with.
The purpose was to only rely on the code, and to never have to worry about subjective things like judges and the interpretation of the law.
If the code of a smart contract isn't "the law of the land" and you have to rely on messy things like the courts, then smart contracts are useless and you may as well just create a regular contract.
The code of a smart contract will never be "the law of the land", because thousands of years worth of precedent in the legal systems of every country in the world give leeway to override the terms of contracts to satisfy other legal considerations.
Well, it could be if it is irreversible, which is what the debate is about.
Bitcoin has done a pretty good job of being irreversible, despite all the illegal stuff that happens on it, and how much I'm sure all the governments would LOVE to shut it down.
I agree. Also, if the above definition was enforced and we assume everyone was rational, there would be no contracts or smart contracts. If I click "yes I accept the TOU" and $1B USD is debited from my account because I overlooked that clause, and I had to actually pay it it would be pure logic but very unreasonable.
Logic meant something like spoken word in the original Greek language, it eventually evolved into something close to reason, which is:
> the mental powers concerned with forming conclusions, judgments, or inferences. - Dictionary.com
so I certainly agree they are != and actually find the parent's definition of reason quite unreasonable.
edit: While the code itself will be difficult to write and have issues, much of what will really be the problem is how oracles use logic/reason to propogate settlement distinctions. The key problems are:
* creating a bulletproof contract [touched on above]
* tx/rx of the settlement information from the oracle's interpretation.
You can't sell yourself into chattel slavery even if you are an "expert." For good reason. Either you allow those sorts of contracts or you acknowledge that some contracts are unconscionable.
Being able to opt out of the legal system would result in private "security" forces with the legal right to hold you upside down by the ankles and shake until you pay up (but, hey, the interest rate was better than the payday loan company that didn't make you sign away your rights, so you took the one with the opt-out). The result would be something out of "Snow Crash." Or a TV sketch:
Is this any different than signing a contract that you don't know the terms to? If an entrepreneur signs an agreement with a VC that has obscure clauses hidden deep in legalese - that doesn't mean the terms no longer apply. It doesn't matter if there's a billion dollars on the line - there is no 'whoops'.
You can't "opt in" to a system that exerts coercive power (in the dictionary-definition sense) over everyone in a jurisdiction. You are already in. The system will not let you out, because that would interfere with other civil and criminal processes (for example, bankruptcy proceedings) and in doing so harm society as a whole.
Code is to logic what law is to ethics. It can't match it perfectly, nor should it try to.
But then, once a situation arises where code goes against logic, and where law goes against ethics, we should be able to override the artifact in favor of the model. This is where most libertarian utopias advocating a purely contract-enforced society fail.
That is in my opinion the reason why we shouldn't try to implement logic into a cryptographic blockchain. Blockchain already has a tremendous value as a safe event sourcing tool.
These "smart contracts" are utterly new constructs and at this point I think it is fair that someone rudely exploited the system and is now playing "finders keepers". In some sense it is a much-needed learning exercise.
Hopefully no single person lost anything more that whatever they're willing to part with in a very-high-risk thrill investment.
As far as contracts and fairness goes, Judges DO TAKE fairness into consideration ALL THE TIME. If these smart contracts ever make it mainstream (and that's a big IF), gaming the system through loopholes won't be a sure-thing regardless of how much "pure logic" (smirk) is involved.
Coding is an abstraction that tries to capture human intent over the physical realities of a machine, just as contracts are an abstraction capturing human intent over the realities of behavior, society and law.
That is to say they're imperfect and require human intervention to uphold intent when abstractions are incorrectly implemented over lower levels.
My opinion is that you should be allowed to opt out of the uncertainty of human law and accept that the code will decide exclusively.
After all, otherwise we'll never truly be able to build very autonomous networks due to humans halting them all the time to reset some part of them.
In fact, I even think that should be the default for blockchains, letting the code be canonical, the authoritive source.
The better solution IMHO is to allow people to opt in to legal authority by declaring that a given human contract is the canonical declaration of intent, with the code declared as a tool built to help enforce it.
This way you also drop the uncertainty and ambiguity in meaning of the code and in most of the marketing, when you always have a primary document declaring what it is you're dealing with.
> My opinion is that you should be allowed to opt out of the uncertainty of human law and accept that the code will decide exclusively.
This will literally never happen, as it's the prerogative of the state to decide that circumstances that flatly override contracts - for example, bankruptcy (and specific things that are and aren't enforceable in regards to it), or nullifying of contracts by minors.
Hacker News is becoming r/ethereum as of late. Getting really tired of everyone trying to rationalize with themselves as to why they bought into an altcoin. Watching the front page throughout the week is like the "5 stages of grief"
The problem is with the expression, the codification of the policy, as implemented in code; not the policy itself. It's the flawed implementation of the policy that the attacker took advantage of. The attacker's justification is self-serving and ridiculous. Given any non-trivial software, especially in a new domain, there are likely to be bugs that can be exploited to undermine the system. And that's exactly what happened here.
> Consumer protection is a relatively new idea in finance; it has caught on because it is a good idea.
I agree. However, it is to counterbalamce a system that previously protected those taking advantage of consumers and less sophisticated organizations. While this is true in perpetuity, and will be true for alt-exchanges, the difference is that arbitration is well documented and fully known.
A consumer will need protection from a large institution with considerable control of the market and considerable resources and influence behind it. There does need to be a way to handle disputes and arbitration, but that is irrespective of the actual granular question of should the DAO get to keep the money?
I say no, in that it will serve a great lesson in recklessly launching contracts before having them fully vetted, and also because it would invalidate the entire purpose of the organizatons existance.
What I find depressing is the ongoing rationalizations around legacy business practices. It is these models that ultimately harm the consumer. Using weakly biased arguments that government or business is responsible for "protecting" the customer is ridiculous, especially in light of recent revelations of corruption in our government and business sectors. It's time for a change and there's not a damn thing you can do about it, Matt.