He strictly followed the terms of a contract by people who were very clear that "code is law" and who did not want institutions were the result is decided by human judgement.
Almost the majority of Wall Street refused the bailout money. Paulson almost force them. The bailout money eventually made a profit ($15B). One could argue that the return rate was low (0.6% annualized), but still, this is far different from what most people have believed till this day: i.e., US gov just gave taxpayer's money away to the banks to cover their ass.
Paulson also almost managed to save Lehman Brothers until British Gov said no to Barclay's role in the plan. (Wall Street banks would acquire LB's "good assets" while Barclay would buy their toxic ones as its gateway to become a more influential player in US market.). But even Lehman didn't reach out to Pualson to get itself saved. It's the other way around: Paulson was trying many ways to save Lehman because he knew when Lehman went down, market would panic and then even those banks in good shape would be affected.
Same idea with the guys getting rich of off of patents in the pharma industry (e.g. EpiPen). Nothing these forms are doing is technically illegal.
But the reason some of these guys are gonna be crucified is the arrogance and lack of public contrition. They really need to take a page from the banking execs of 2008 who cried no-fault all the way to the bank.
> The California electric grid operator built a set of rules for generating, distributing and paying for electricity. Those rules were dumb and bad. If you read them carefully and greedily, you could get paid silly amounts of money for generating electricity, not because the electricity was worth that much but because you found a way to exploit the rules. JPMorgan read the rules carefully and greedily, and exploited the rules. It did this openly and honestly, in ways that were ridiculous but explicitly allowed by the rules. The Federal Energy Regulatory Commission fined it $410 million for doing this, and JPMorgan meekly paid up. What JPMorgan did was explicitly allowed by the rules, but that doesn't mean that it was allowed. Just because rules are dumb and you are smart, that doesn't always mean that you get to take advantage of them...
> The U.S. legal system has built up a pleasantly redundant system of safeguards so that investors usually get more or less what they expect. If you invest in a U.S. public company, you are in a sense signing up for a certificate of incorporation and bylaws, which are written in lawyerly language. But you also get a prospectus that explains the terms of your investment in relatively (relatively!) plain English. Also the terms of that investment -- how you vote, what duties the company owes you, what rights you have, etc. -- tend to be constrained by federal securities law, state law, stock exchange listing requirements, underwriter due diligence, public policy, custom and tradition. Even if you invest in a company whose bylaws say that the board of directors can sacrifice you to a demon on the first full moon of a leap year, it's unlikely that that term would be enforced. There is only so much leeway to depart from the standard terms.
> If you invest your Ether in a smart contract, you'd better be sure that the contract says (and does) what you think it says (and does). The contract is the thing itself, and the only thing that counts; explanations and expectations might be helpful but carry no weight. It is a world of bright lines and sharp edges; you can see why it would appeal to libertarians and techno-utopians, but it might be a bit unforgiving for a wider range of investors.
[1]: https://www.bloomberg.com/view/articles/2016-06-17/blockchai...
Code is law. The community decided/realized the "law" as written wasn't the one they wanted, so they created a fork that captured both the letter and spirit of the "law" rather than the letter of some other one they didn't want.
I don't get the holy wars over this, other than the fact that some people are obviously very motivated to pump their empty shell coin in the hopes that it beats the leading ETH one. "Code is law" and "laws are imposed upon humans against their collective will" lead to two very different things.
C-3PO: He made a perfectly legal move.
Han: Let him have it. It’s not wise to upset a Wookiee (The Ethereum founders).
C-3PO: But sir. Nobody worries about upsetting a droid (a regular contract user without influence). Han: That’s cause a droid (regular contract user) don’t pull people’s arms out of their sockets (hard fork the entire crypto currency and call you a thief) when they lose. Wookiees (The Ethereum founders) are known to do that.
C-3PO: I see your point, sir. I suggest a new strategy, R2. Let the Wookiee (Ethereum founders) win.
With Chewbacca's and the Ethereum founders' behavior, you would be a fool to play their game again thinking that they follow the rules.
People don't like to get screwed over.
This is what Ethereum users actually believe.
Want it or not, Ethereum is very much led by a small group of people, and when those people lose their money, they ask the community to hard fork because really it would be a shame if the cryptocurrency they invested in lost value and became worthless. After all, it's not as if every cryptocurreency was nothing more than just a way to speculate.
Ask a thousand people if they want to lose money or win some, they'll all answer win. Even if lose is the normal (and in Etheureum's case, codified and agreed on by everyone) course of action.
By the way, the vote was at a default 'yes' and had to be explicitly disabled.
It's almost as if some recourse for actions done in bad faith is a useful tool to have as a society...
> Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.
It's not useful to have in an electronic currency. In fact, it goes against the whole idea behind ethereum.
>Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.
Had Vitalik ignored the vote and put his organization and the "canonical" chain on the non-HF side his would be the "abandoned" no-name chain, and people would now be mining some ETH derivative in line with their votes.
This is honestly just a fulfillment of "code is law", with the obvious rule above it being "humans accept or reject laws collectively". In this case, people rejected the former "law" and opted for one that captured the spirit/intent rather than the letter.
This seems like a tenuous connection at best.
Unfortunately for Aviva, their contracts are actually law in contrast to Ethereum where if the devs feel like it, they can do/revert anything.
[1]: https://ftalphaville.ft.com/2015/02/27/2120422/meet-the-man-...
Can someone familiar with this explain how something financially based can have a capitalization flaw? I would expect a smart contract language to have very strict type and variable linking. Humans make many mistakes in coding but most of the time it doesn't cost $55m. A transaction language should be very strict so either the smart contract language is flawed or the author of this article is overstating something for dramatic effect.
EDIT: Found this: https://github.com/slockit/DAO/blob/v1.0/DAO.sol#L666
on a deeper dive: http://hackingdistributed.com/2016/06/18/analysis-of-the-dao...
I have no clue how they managed to fool so many people with poor and shoddy work. But they have so far. And they've fooled everyone that this is a 'hack' even after saying time and again "The code is the contract, and the contract is the code"... Unless lead devs lose money.
`Transfer` and `transfer` are two different functions, one creating an "event" (think a signal on the blockchain) and the other actually transfering tokens.
The true flaw lies in the reentrant attack on `.send()`
There are no address checksums in the Bitcoin blockchain; all contracts/scripts on the blockchain reference raw hashes. Only at the application level -- e.g. sending an address to a friend in an email -- does Bitcoin make use of checksums, since blockchain space is fairly precious/expensive.
The DAO was pumped up by VCs and friends of the founder of Ethereum, which, before the launch, attracted some people who had clout from the big banks and enterprises, ergo, if the DAO failed then Ethereum failed in the eyes of the most lucrative customers & developers there.
The thing that pissed of purists so much was, that when it first came out it was marketed as this beautiful "world computer" that would be incorruptible by anyone, but the hard fork made it apparent that the values of the Ethereum community had changed to value support of banks & business over that idea.
I was at a conference this week and watched a lecture by one of the founding board members of the Enterprise Ethereum Alliance, who was getting the crowd fired up about the idea of ICO's, and then directly after his talk, David Birch from Consult Hyperion came on and said that people who are involved in the launch of new tokens in this current feverish phase are extremely likely to go to jail for fraud. Was hilarious
Edit, just to give people an idea of where he's coming from ideologically, these are some of his comments that show the kind of world he wants to see:
https://youtu.be/c8mdr8iwX20?t=6m49s
"law-abiding taxpayers like me are subsidizing criminals to use cash and not pay taxes"
https://youtu.be/c8mdr8iwX20?t=10m47s
"so getting rid of cash has some other benefits which will lead to unexpected changes. For example for economists, getting rid of cash means that you lose the zero lower bound on interest rates. You can't have interest below zero because if you drop interest rates below zero people will just draw out the cash and just hold it. If you don't have cash you can have negative real interest rates. So getting rid of cash has a lot of benefits."
https://youtu.be/c8mdr8iwX20?t=13m55s
"So if you allow us technologists to build the stuff so we build something like Bitcoin which let's pretend it's anonymous. Do you know what you get if you let us build that? You get a giant electronic Somalia. If you want to live in a society which is entirely driven by anonymous cash, where the rich aren't accountable anymore, where whoever's got the most money can be the warlord and do what they like, well that's what you're letting us build now"
His demonization of cash remind me of this:
"The cashless society – which more accurately should be called the bank-payments society – is often presented as an inevitability, an outcome of ‘natural progress’. This claim is either naïve or disingenuous. Any future cashless bank-payments society will be the outcome of a deliberate war on cash waged by an alliance of three elite groups with deep interests in seeing it emerge"
https://aeon.co/essays/if-plastic-replaces-cash-much-that-is...
This is a good discussion: https://www.bloomberg.com/view/articles/2016-06-17/blockchai...
Somebody exploited a flaw in the system and managed to grab millions of funny-money currency. It's like cheating at a game of monopoly except that many of the players think the rules of the game are "the law" in real life.
So the question is, could you convince a jury that it is illegal?
Put simply, all code has bugs. How can Etherium ever work in practice at scale?
Aren't there a to of Bitcoin organizations with hundreds of millions of dollars flowing through them? If these companies found a way to operate safely with manageable risk, through things like cold storage and encryption schemes, than how is it much different from Ethereum?
It's fun to say things like "code is law" and imagine everything happens within this self-contained bubble but this stuff still operates in the real world and there are risks and consequences for actions as well as real world security mechanisms regardless.
Code as law is right, but laws can (and should) change, because the effect they can have can be devastating if loopholes do the opposite of the intention behind the law.
The fallacy here is that we have one immutable law that governs everything, that is set at one time and never changed - how ridiculous. This is utter nonsense.
The DAO was a beautiful experiment that went badly wrong. In the grand scheme of things, if this was a heist in the traditional sense - everyone would have lost out. But as it stands, it's probably the biggest bug bounty in history.
Hopefully no one got hurt. We learn and move on.
Ether thief remains a mystery, one year after $55m digital heist
The guy went to a bunch of people with the idea and they liked it.
The people talked about it a lot and many more people joined in.
They all pooled their money together to launch this cool money.
Some other guy came over, saw all of this, looked at the code, and used the code to transfer $55M to his wallet.
Arguments about law and contracts ensued.
At least as far as we're aware.
well, isn't the financial law against this kind of incompetence in the first place?
I don't think the thieves would be guiltier than the team behind DAO.
ps: and line 666??? who the hell keeps a single source-code file that big? no wonder bugs are around...
Me. SQLlite. .NET's garbage collector. CPython's eval. Lua's lexer. xinit. dwm. These are off the top of my head that I've seen
https://raw.githubusercontent.com/dotnet/coreclr/master/src/...
https://github.com/catseye/Befunge-93/blob/master/src/bef.c
https://github.com/rust-lang/rust/blob/master/src/liballoc/v...
https://github.com/oxyc/luaparse/blob/master/luaparse.js
Yep. Pretty troll comment. Felt like taking the bite today. I'm going to get back to getting my lexer past 1000 lines today: https://github.com/serprex/luwa/blob/master/rt/lex.wawa
Why would you expect there to be a relationship between source file size and bugs?
Suppose a program has 100 functions, and each function is 10 lines plus on average 4 lines of comments.
If I organize it as a single file, it will be about 1500 lines.
If I organize it as 10 files, they will each be about about 150 lines.
But when I'm actually working on the program I'll be seeing it through a window that shows the same amount regardless of whether the program is one big file or 10 smaller files.
Since I see essentially the same thing in both cases, I don't see how the bug rate will be different.
Don't get me wrong...I'm not saying it is OK to always put everything in one file. There are times when good design requires multiple files. For example if a program must use global variables and the language supports globals that can only be references within the file containing them, then organizing files around which globals functions need access to might be a good idea and help avoid bugs.
But in that case it is not the size of the files that matters. It is their data access needs.
Line 666 is an entertaining coincidence but that is really not that large a file for most languages.
Example? Or do you just mean like every financial organization ever (even beyond Wall St) that pushes back on regulatory oversight?
Attempting to regulate Ethereum with human gatekeepers sounds ridiculous to me, especially at this point, and entirely defeats the purpose of the whole system.
These people who put money into that DAO fully knew the risks of what they were doing. And none of them are calling for centralized oversight from the US gov as a result. So I'm not sure who this would be protecting or helping.
