Gold collapsing. Bitcoin UP.

[cypherdoc]

@VeritasSapere:

People are comparing the DAO incident to Satoshi’s int64 overflow bug back in 2010. I don’t think it is a logical comparison for a few reasons:

1. No funds were stolen there.
2. Satoshi didn’t blacklist an address or artificially reclaim funds.
3. This was a bug involving an int64 overflow that Satoshi would have fixed anyway, hacker or no hacker.
4. Satoshi didn’t tell exchanges to stop trading and single-handedly control the market.
5. This was in 2010. There was a lot less at stake back then.

And finally, Satoshi did not rewrite history. He fixed a bug. Bitcoin users, including miners, upgraded and began to reject the blocks exploiting the bug. The bad chain was eventually reorg’d and overtaken by the new main chain.


on our good guy @Gavin Andresen:

This issue was actually anticipated by Gavin beforehand. A recursion limit (see also: gas price) had been implemented, but the recursion count was not being incremented properly. In the end, even with fixing the recursion count, there were still too many unknowns. OP_EVAL turned out to be a major failure and was scrapped entirely. It was replaced with the much safer pay-to-scripthash that we now know today.

mentions SW:

Segwit has been a pull request for months now, and it is still being reviewed. That is for very good reason.

indictment:

Ethereum on the other hand seems to be more cavalier with its design and its changes. It has no issues with doing a hard fork every so often. It has no issues with a high-level dynamic language dictating its contracts. Yes, it has pretty syntax, but how much is hidden underneath the surface when you’re using a high-level turing complete language?

I don’t think Ethereum is learning from history.


https://medium.com/@chjj/ethereum-is-the-op-eval-of-cryptocurrency-d6beaa17eb50#.xhmox8aky

 

[VeritasSapere]

I still can't understand how you can view Ethereum as sound money. as a platform and concept, it hasn't even left the basement yet. b/c there are so many unknowns and contradictions, esp the premine with a planned POS power grab, recommending that your clients invest in it seems unwise. if i did that, i would certainly be disclaiming up down left right that Ethereum is very much a speculative play that hasn't proven itself and may never do so. i understand that it could be your ticket to glory and riches but still.

I would not consider POS a power grab, but an interesting experiment in blockchain technology and decentralized governance. I am not advising people directly, I help manage a fund that invests in cryptocurrency. Ethereum is part of a diverse portfolio of over forty different cryptocurrencies, where Bitcoin is actually the biggest single holding.

I think that this is a wise strategy, it also takes advantage of the potential upside of some of these alternative cryptocurrencies, even when just investing a small amount in certain highly experimental projects, in this case like Ethereum, which has so far proven itself true, for myself at least since I have been mining Ethereum since week one. I am not as early an adopter as most people here, the rise in Ethereum is one of the things that has allowed me to focus on this field full time now.

In regards to Ethereum being a speculative play, I would say the same about Bitcoin just less so. Investing in cryptocurrency at all should be considered highly speculative, I am still at the point where I still want to see the governance model of Bitcoin prove itself. I agree that Ethereum is even more speculative especially with a POS switch coming up, this one of the reasons I like to have such a diverse portfolio, it is the recognition of this uncertainty. Wisdom is acknowledging that we do not know certain things.

The reason why I consider Ethereum to be sound money besides the reasons I have already stated, is that it is a case of comparisons. When compared to Fiat currency I consider it to be a far more sound form of money, in a world before Bitcoin it might have even been the soundest form of money.

But now that we are comparing it to Bitcoin, as you said @cypherdoc "[The] bar that Bitcoin has created is extremely high". So sure it is not as sound as Bitcoin in several ways, but it certainly is sound money exactly because it shares those features with Bitcoin, public key cryptography, a public blockchain and a predictable supply among other things.

 

[cypherdoc]

Boom

 

[Zangelbert Bingledack]

The more I think about it, the more "smart contract" seems like a terribly misleading name that is distorting everything going on with the Ethereum situation right now. I'll call them transaction machines (TMs) for now.

• These transaction machines are NOT meetings of the minds (agreements/contracts), though they may attempt to represent such agreements. If they do not faithfully represent agreements, that is the fault of the TM builders.
  • This means insofar as a TM is an investment vehicle like TheDAO, the scope of the investment should be considered to include the matter of whether the TM succeeds in faithfully embodying the agreement. In short, investors in TheDAO were in part betting on whether TheDAO would faithfully implement the architecture of its proposed design spec.
  • Thus any attackers are merely competing in the law of the jungle. It's TM vs. TM vs. human in a free-for-all. You build a TM and it fails, tough luck - build a better machine next time. Imagine that TheDAO attacker were a fully autonomous agent roaming the Internet, just trying to maximize its profits. Do we reverse its winnings? What if it has since spent them? Or what if it is huge number of such agents all leeching away TheDAO? What if some are owned by starving African farmers? And if both agents are autonomous, who is exploiting whom here? Do we really want to enforce human conceptions of "fair play" in the machine-to-machine space? Furthermore, what if the TheDAO had accidentally sent user funds to an unspendable address (akin to 1BitcoinEaterAddressDontSendf59kuE)? Do we Carebear it back? If not, why do we do it just because there happens to be an attacker?
• It seems to me a government court would likely rule that these are not "contracts" at all but instead something like my TM idea. If you invest in a piece of software and it fails to perform, you lost the money fair and square. Or if there is anyone to blame it is the software designer; sue Slock.it for negligence, don't reverse an Ethereum transaction. A court might still rule that the "attacker" was hacking a virtual machine or something, but I don't think the court would try to enforce the "contract" as there was no credible meeting of the minds nor any proof of entry into such an agreement, nor would most parties have the ability to evaluate said "contract" to the degree necessary to understand what they are entering into (this does matter in law, as far as I know).

 

[cliff]

You got it, @Zangelbert Bingledack.

 

[8up]

Boom

Expected. From now on we'll see new terrain.

 

[VeritasSapere]

@cypherdoc You already convinced me that I was wrong directly comparing it to previous forks in Bitcoins history, what is happening within Ethereum now is indeed unique. I thought this post summed up some of the thoughts on the pro fork side well.

 

[79b79aa8]

I wonder what Nick Szabo thinks about these Transaction Machine developments. If someone spots some musings please post.

 

[VeritasSapere]

Do we really want to enforce human conceptions of "fair play" in the machine-to-machine space?

It struck me that the answer to this question for me is yes. We should enforce human conceptions of "fair play" in these decentralized protocols. Is that not what we are already doing in Bitcoin? We choose the protocol which we think has the best and most "fair" rules. Which is designed by a person who thought that these where the best and most "fair" rules. That strikes me exactly as enforcing human conceptions of "fair play" which I would think should apply to machines as well. Unless the machines chose to play by a different set of rules, at which point we would be having a completely different conversation.

 

[cypherdoc]

@cypherdoc You already convinced me that I was wrong directly comparing it to previous forks in Bitcoins history, what is happening within Ethereum now is indeed unique. I thought this post summed up some of the thoughts on the pro fork side well.

of course you know what i think about that argument; it is completely vacuous and self interested.

first off, OP asks us to imagine a world far into a future that might or might not ever exist and then poses the grand societal question equivalent of "think of the children!" nevermind that the whole concept behind Ethereum as well as it's code structure may in fact be flawed from the outset which was pointed out to it's devs multiple times by other competent devs. if you want to talk about governance, maybe Eth's governance is flawed by the mere fact that they are assuming character traits suspiciously like our Federal Reserve bailout governors. secondly, the litany of insight that is splashing across the press about Eth and smart contracts in general doesn't bode well for Eth's future no matter what you do, SF or HF, or some combination.

like i've already argued, it "appears" that Bitcoin has magically gotten this right and has set a bar too high for Eth to ever clear. altho there are certainly unknown and unpredictable aspects of the blocksize debate that have yet to be reconciled, going on 7.5 yrs appears to be promising for the future of Bitcoin even so.

i think you're still missing the fact that the "fix" here is specifically about a targeted bailing out of the DAO investors and their monies. unless you're saying that the HF is necessary to fix a fundamental flaw in the Eth code; which would be an admission of an even more serious problem?

 

[Norway]

The more I think about it, the more "smart contract" seems like a terribly misleading name that is distorting everything going on with the Ethereum situation right now. I'll call them transaction machines (TMs) for now.

• These transaction machines are NOT meetings of the minds (agreements/contracts), though they may attempt to represent such agreements. If they do not faithfully represent agreements, that is the fault of the TM builders.
  • This means insofar as a TM is an investment vehicle like TheDAO, the scope of the investment should be considered to include the matter of whether the TM succeeds in faithfully embodying the agreement. In short, investors in TheDAO were in part betting on whether TheDAO would faithfully implement the architecture of its proposed design spec.
  • Thus any attackers are merely competing in the law of the jungle. It's TM vs. TM vs. human in a free-for-all. You build a TM and it fails, tough luck - build a better machine next time. Imagine that TheDAO attacker were a fully autonomous agent roaming the Internet, just trying to maximize its profits. Do we reverse its winnings? What if it has since spent them? Or what if it is huge number of such agents all leeching away TheDAO? What if some are owned by starving African farmers? And if both agents are autonomous, who is exploiting whom here? Do we really want to enforce human conceptions of "fair play" in the machine-to-machine space? Furthermore, what if the TheDAO had accidentally sent user funds to an unspendable address (akin to 1BitcoinEaterAddressDontSendf59kuE)? Do we Carebear it back? If not, why do we do it just because there happens to be an attacker?
• It seems to me a government court would likely rule that these are not "contracts" at all but instead something like my TM idea. If you invest in a piece of software and it fails to perform, you lost the money fair and square. Or if there is anyone to blame it is the software designer; sue Slock.it for negligence, don't reverse an Ethereum transaction. A court might still rule that the "attacker" was hacking a virtual machine or something, but I don't think the court would try to enforce the "contract" as there was no credible meeting of the minds nor any proof of entry into such an agreement, nor would most parties have the ability to evaluate said "contract" to the degree necessary to understand what they are entering into (this does matter in law, as far as I know).

Spot on, sir Bingledack. Spot on.

 

[albin]

Do the Core shills take shifts on /r/btc or something? It feels like it's /u/Salmondish's responsibility now to cover every thread.

 

[VeritasSapere]

@cypherdoc I think that we should accept that if Ethereums governance model is flawed then by extension Bitcoins governance model must also then be flawed, because they presently share the same governance model, so if this fork does goes through and you do not think it is a good thing then it also does not bode well for Bitcoin, from your perspective at least. Since the same thing could happen in Bitcoin in regards to having the majority of miners change the rules.

Sure there is a flaw in the code, I believe the developers said that such a mistake should not have been allowed to been made in the first place, they are changing the code to make this particular exploit impossible in the future after all.

I do not think that calling it a bailout is an accurate analogy I would argue that a bank robbery is a much more accurate analogy and it certainly changes the sentiment of the question. Since in a bailout, either money is taken or moved from one place to another, most of the time through taxes or inflation. That is not the case here at all, someone has taken something that does not belong to them, as per the intent of the smart contract. Simply returning what was stolen to its rightful owners I would consider more similar to the intervention of a bank robbery, then when compared to a bailout.

Furthermore that this is done through a decentralized governance mechanism just like Bitcoin, I would consider it rather justified. After all the resilience of the rules that we do value does not depend on our unwillingness to change the rules that do not matter as much. The grand idea is that the market can decide what changes would or would not be in its own self interest. To argue that we should not intervene in this theft because it sets a dangerous precedent, I do not think holds true, if such an event ever happened again it would not be that bad to intervene in the theft again. If the situation is different and it is not as clear "consensus" will simply not be found and the decentralized governance mechanism would not intervene. As long as we are confident that the majority rule of the miners would not implement rule changes we would truly disagree with on mass, then we should not fear such small changes that we can agree with because of the danger of setting a bad precedent.

There are no classes of rule changes just like hard forks and soft forks are really not that different from a governance perspective at least, what matters is the content. In the same way that if certain transactions where censored or the chain was successfully rolled back in Bitcoin that would not set a bad precedent for the future, since the guarantee that will not happen is not based on precedent or convention, but on the unique combination of cryptography, game theory and economics that is Bitcoin.

 

[Norway]

Just a reminder of how silly the current paradigm signal future money policy compared to bitcoin. By a display of different alien battleships from Space Invaders!

 

[79b79aa8]

ha ha . . . source?


EDIT: that is some deep science, yo.

 

[Norway]

@79b79aa8
http://www.cnbc.com/2015/09/17/take-a-look-at-the-new-fed-dot-plot.html

 

[cypherdoc]

I think that we should accept that if Ethereums governance model is flawed then by extension Bitcoins governance model must also then be flawed, because they presently share the same governance model, so if this fork does goes through and you do not think it is a good thing then it also does not bode well for Bitcoin either from your perspective at least. Since the same thing could happen in Bitcoin in regards to having the majority of miners change the rules.

you still keep missing the following things:

1. Eth governors apparently are willing to step in and save specific investors and their monies via a HF. that has never ever been proposed as even a HF option in Bitcoin.
2. again, you keep trying to conflate a lifting of Bitcoin's limit via a HF with the HF proposed by Eth devs to "save" DAO investors and their monies. and this, despite the advertisement that all governance rules were embedded in DAO code itself. just b/c we're using the term "HF" in both instances doesn't mean you can equate them.
3. as an aside point, i don't think Bitcoin's governance stems only from miners. like i said, i think they're being led around by the nose by kore dev and Blockstream. and i also believe that users will soon get the last say in the matter by either choosing or rejecting a limit with their feet.
4. finally, and i've never said this before, there is a chance our views on this blocksize limit could be wrong. i don't think so and i put a low probability on it, but it is possible.

 

[79b79aa8]

"there is a chance our views on this blocksize limit could be wrong". there is. the more important point, far less likely to be wrong, is that for antifragility there need to be multiple implementations of the protocol (and ideally a spec).

 

[VeritasSapere]

1. Eth governors apparently are willing to step in and save specific investors and their monies via a HF. that has never ever been proposed as even a HF option in Bitcoin.

I do not think it matters who the "Eth governors" are or what they think, I assume you are referring to the original Ethereum development team? I suppose this is a theoretical point of weakness in this governance model, just like Bitcoin.

Secondly I do not think it matters that the precedent does not exist in Bitcoin, However such a situation could not exist within Bitcoin, since this is all only possible through the existence of these smart contracts and the creation of such a DAO. This is why it is possible to return the DOA funds and not effect anyone else, that would not be possible in Bitcoin since it would require a rollback which could not be justified, importantly that is not the case with Ethereum now.

2. again, you keep trying to conflate a lifting of Bitcoin's limit via a HF with the HF proposed by Eth devs to "save" DAO investors and their monies. and this, despite the advertisement that all governance rules were embedded in DAO code itself. just b/c we're using the term "HF" in both instances doesn't mean you can equate them.

I can't help but see the parallels, the argument I just made about Bitcoin and Ethereum depending on game theory incentives and not social convention. Also seems very familiar with our discussions with @jonny1000 here.

I think part of the similarities simply lie in that there is a disagreement within the community that is resolved through a decentralized proof of work governance mechanism, we see some of the same patterns, and ideological divides being drawn up.

3. as an aside point, i don't think Bitcoin's governance stems only from miners. like i said, i think they're being led around by the nose by kore dev and Blockstream. and i also believe that users will soon get the last say in the matter by either choosing or rejecting a limit with their feet.

I would say that the same is probably true with Ethereum right now, we might disagree on the extend, but we are seeing the same results from using the same governance mechanism and it has not fully played out yet for either, this is why what is happening to Ethereum now could also be very instructive for Bitcoin itself.

4. finally, and i've never said this before, there is a chance our views on this blocksize limit could be wrong. i don't think so and i put a low probability on it, but it is possible.

There is always a chance that we are wrong, except for our own existence. I applaud your wisdom, I think I could be wrong on my theory of governance for Bitcoin, though if I am correct I expect to see that blocksize limit lifted and for Bitcoin to soar, along with its alternatives.

 

[cypherdoc]

this should be fun. in 40 min: