This may be a stupid question but: is it actually possible to have a price less than zero?

TFA suggests that this line:

    require(_share_price > 0, “Invalid share price”);

...should be "greater than or equal." But if the share price can't be negative then you'd want to just use an unsigned int and not pay for a require statement, right?

Isn't everyone passing around uint256's these days?

I thought of a new framing of cryptocurrency reading this: it's a MMORPG for math nerds.

Did these people also write their ”smart contract” in anything resembling JS?

> More money has to come in

Is there any better description of these coins?

TTN is not at 0. It's at $0.00206950, which ought to pass what the poster claims is a bad > 0 error test. So what's really going on?

Unstable coin?

Why don't the IRON holders bid TITAN up to 0.000001 to unlock the IRON $0.75?

Is "unthought" some trendy positive-vibes-only newspeak for "didn't think"? Or just an artifact of non-native english?

And this is why leetcode is important. Oh they use that in their interviews? They aren’t a true leetcoder then.

40 years ago, financial innovation involved finding new affinity groups to sell credit cards to (and others I'm sure but that was a scam I saw firsthand).

It wasn't any more honest than this; it was just kept quieter with private meetings and less publicity for the collapsed scams.

I'd be looking for the banker-adjacent people in these. The folks that don't work for the banks directly, but consult; somehow always seem to have some extra connection to someone at the bank, related, married, side projects...

I knew crypto detractors were going to have a field day with this one. ;)

With DeFi, you're simply exchanging one type of risk for another. Without due diligence you're pissing your money away- as it is to be expected. And as it was brought up before, this was an unaudited contract that had been running for what, weeks? Months?

Personally, I cannot say I understand DeFi deeply enough to get into the intricacies of "yield farming" and such, so I just avoid it altogether. Only have a relatively small amount of USDC and DAI accruing interest on Compound, which has at the very least been audited [0] a few times before, but even if it were to go tits up tomorrow for whatever reason, at least I understood there was that risk.

[0] https://compound.finance/docs/security

There's a reason it's called a legal code--both computer code and legalese are formal languages. The difference is that computer code is deterministically executable by a machine, while a legal code requires humans to carry out the actions it specifies (and humans are not deterministic machines, obviously).

The point where the two realms intersect is challenging but needs to be handled appropriately. It would be great if some of the terms of legally binding contracts could be delegated to automated systems. And when two parties do not actually share a common legal system, then code-based contracts can facilitate transactions that would otherwise probably never happen.

>Code can't prevent someone from using violence to force you to overturn a smart contract's decision.

You can hit the developers and the computer has much has you want but no amount of violence will fix the "_share_price > 0".

He was Italian, C− for effort

Is that related to IRON somehow?

PlusToken was certainly a Ponzi, I don't see anything in this article that suggests IRON is/was one.

A self licking ice cream cone, without the ice cream.

https://en.wikipedia.org/wiki/Self-licking_ice_cream_cone

> Some chains/coins are backed and developed by fairly well defined "legal entities" (presumably for reaso). I am waiting with popcorn in hand for the day someone loses money via smart contract and then takes the entity behind the chain to court to overturn it.

I would very much like to see regulators purposely engage in these activities, and then directly pursue those within their reach. There's no reason to wait for more citizen victims when the model is proven and the government has the resources to set the stage to demonstrate the failure scenario. This is simply a more elaborate sting versus putting a car on the street to be boosted.

Looks like some very expensive chips got stuck in the machine.

In other situations where a company is unable to return a customer's money or property to them, they don't magically get to keep it, statute of limitations or no. Where I live, they would have to give the money to the state office of unclaimed property, eventually.

However, I'm not a lawyer and I imagine this is likely more complicated than that.

It would eventually escheat to the state, not Circle.

If you think about it, the special case should give holders the option to withdraw the 74c of USDC without any TITAN.

Clearly the programmers didn't fully think though what would would happen if TITAN reached and got stuck at zero value.

…and for Americans, not getting in trouble with the SEC.

with bitclout it's now a couple seconds.

15 seconds for the transaction

> have been around for a year or more without problems

> quite trustworthy

As someone being used to write fixes to code that is 20 or even 30 years old, I had to chuckle.

Even worse: unless you use a proxy contract, production code can't be updated period. Smart contracts are immutable, besides being able to self-destruct themselves.

And the unexpected results may be billions of dollars worth of assets lost. Like most of SV, most of the cryptocurrency space is "move fast and break things", but breaking things entails a little more than an app being down for a few hours.

There's a bit more to what happened than the article lets on. The contract mints to provide liquidity (supposedly). There was 1.8m tokens at the time of the crash, now theres 26Trillion. you would need all the capital in the world to get it to .1 now.

The oracle calculated the price to a certain precision, so it rounded down to 0.

If you want to work with off-chain things then necessarily your system is going to include off-chain things. I'm not sure of your point here.

However, I can think of an exception. Augur is a prediction market that doesn't use a trusted source to resolve bets. It doesn't get a lot of use these days, and probably won't before scaling resolves gas prices, but the bets that have been live on the system have resolved correctly.

She’s this close to getting her Lexus*

* (A lease in your name on Lexus that they will cover the payments on so long as you keep consistently bring in a statistically unlikely amount of product every month for the entire 72 months you were signed up for)

A price can go negative for a physical thing which requires upkeep, but I don't see how a coin which imposes no obligations on an owner who just chooses to walk away, can have a negative price?

Oil went negative in the same way the price of my trash is negative: more of it was being produced than people wanted to buy, but the producer had to get rid of it because they couldn't stop production. As another commenter said, you can just walk away from a digital asset, so this isn't a problem. I can't walk away from my trash.

The hot new Ponzi scheme is EMAX, which even has celebrity endorsement! What could possibly go wrong. If you want to see an endless number of other Ponzi coins, check out /r/cryptomoonshots

The price is actually something like $0.000000033869.

https://www.coingecko.com/en/coins/iron-titanium-token

Negative 0.0961

That's because most of the financial world stumbled.

The rating institutions won't take a big hit for blowing a call that 90% of the industry also blew.

>Scamcoin hit a $70 million market cap within an hour, and PonziCoin absolutely would have hit a multi-million dollar market cap if the dev hadn't pulled the plug.

Fantastic. I genuinely was just coming up with those on the fly and did no research to see if any existed, but added "if it hasn't already happened" because I was still confident enough that some very likely did exist and very likely were successful.

My post with your reply feels a little like movie scene dialogue. (Perhaps Aaron Sorkin.) What a time to be alive.

So basically a Ponzi scheme where only the earliest adopters get paid and everyone is remarkably open about that?? :)

My God, I haven't thought about the word "BitConnect" in a very long time. https://www.youtube.com/watch?v=AwDbx-nuQ5o

I think OneCoin would be classified as a Pyramid rather than "just" a ponzi - a lot of shady MLM promoters got very rich through the recruitment incentives

There really is no "general rule" as evidenced by the fact that companies accused of being MLMs have gone on as publicly traded companies for ages, while even billionaires and hedge fund managers have feuded about whether it is a scam.

See: Herbalife and Ackman vs. Icahn.

Or AFLAC. (I'm not saying they are an MLM, but I've been personally approached for a "job" that seemed to be sales with no qualifications needed and I wondered)

> They had a reasonable expectation that even if the value was totally lost, they wouldn't have their collateral locked forever. Their investment, yes, but not their collateral.

They literally handed their money to a computer program that works outside of human control and cannot be interfered with... which means if something goes wrong no one can intervene and sort it out. This is a risk they took willingly. It's not the first time a computer program malfunctions, and won't be the last.

"And, look, if the casino gets robbed, and you are chilling in the lobby, you’re gonna get robbed too. Obviously you’ll be sad about getting robbed. You came to gamble, maybe to get rich or else to have fun losing your money, and getting robbed does not satisfy either of those desires. But it could be worse. You were … at the casino? You were mentally prepared to lose that money anyway.

Similarly the expectation for anyone trading crypto surely has to be that it’s a risky volatile asset class where you can lose all your money in a variety of exciting new ways, and if you are parking some of that money in dollar stablecoins some of that expectation ought to carry over. If you want to put your money somewhere safe, there are banks and money-market funds and Credit Suisse supply-chain funds, and if any of them go bust then that is a potential financial-stability problem. If you want to put your money somewhere safe for crypto, there are stablecoins, and if any of them go bust then that is a brief distraction from the crypto exchanges losing their customers’ money in other ways."

Flash loans are not relevant to the uniswap TWAP oracle, which ignore any transactions in the current block. That oracle was written specifically to be resistant to manipulation and I don't think there's any consensus not to use it.

The smart contract itself has a "blacklist" function[1], which presumably can be used to prevent those tokens from being moved.

[1] https://etherscan.io/token/0xa0b86991c6218b36c1d19d4a2e9eb0c...

> Yep, short of the fed issuing USD tokens directly that's always going to be how USD stablecoins work.

Or... you could just lie about the USD and issue a stablecoin anyway.

It certainly doesn't largely refer to that. It requires a central actor to defraud new investors, promise investors returns that haven't actually been realized, channel their money to pay off the old ones. If you read up on why it's named a Ponzi scheme you can understand how they work.

An oracle is a source of truth for information about the outside world to a smart contract. The smart contract doesn't actually call the oracle. This is because smart contracts don't self-execute and can't make external http calls. So a smart contract pauses, and waits for an oracle to trigger an update function. Because oracles have a lot of power over a smart contract (not all smart contracts need them, by the way), they have to be done in a secure way. The market leader in decentralized oracles is Chainlink. They power hundreds of DeFi applications.

12 hours is not a lot of time.

And what does it mean that they could exit, when the contract itself was completely broken in the meanwhile?

Not exactly. There are plenty of anonymous projects, developers and users.

I believe the point the poster was making is that "smart contract" is a misnomer and contracts comprised of code should be more realistically called "dumb contracts" since they lack the intelligence to understand and compensate for context and intent.

Forget "central actors" or whatever.

A ponzi scheme is a description of a certain type of fraud. We can reduce it to it being the fraud of claiming new capital as investor dividends. It's a little more complex, but at its heart, that's what you got to do.

If there is no lie about the source of the money, it's not technically not a ponzi scheme.

A Ponzi scheme without anyone running it isn't a Ponzi scheme.

> new money is needed to pay old money

WOW that's a broad definition. Turns out my 401k is a Ponzi!

Do you know the difference between, say, a pyramid scheme and a Ponzi scheme? Or is "new money is needed to pay old money" the most nuanced understanding you have?

Technically it's a way to keep governments in check but the point isn't that you use an emergency solution all the time.

Homeless people buy a tent as a fallback for a house. That doesn't mean they want to live in a tent for the rest of their lives.

Do you consider yourself intelligent, or merely clever?

Are you a slack-jawed puppet of the charismatics, or is it just everyone else?

Who owns those 31 nodes? Who gets to choose which nodes are part of the calculation?

> Focus directly on the entity doing the money transmission in this case- the smart contract IRON. They take in USDC and give out IRON and TITAN. IRON and TITAN are money substitutes. Money transmission includes anyone by any means conducting exchange of one type of money for another. Functionally that is what this contract is doing. The code didn't write itself, there are people behind it that released it, and they wrote it to conduct money transmission (a specific purpose). You don't even need to bring ethereum into the conversation to prove they are in violation.

If I write a smart contract and publish it to github, but someone else deploys it, is the other person doing the "money transmitting"? What if we don't know who actually published it (which is very possible since all you need is a small pile of ETH to deploy)?

Interestingly, this is actually what happened when curve (decentralized exchange) launched their token [0]. Some "random person" deployed the contract and then a few hours later curve said "yeah, that's our contract code, we'll use it". People hypothesize that someone from curve launched it in an attempt to avoid certain laws.

[0] https://cointelegraph.com/news/anonymous-developer-deploys-c...

Why bother -- it's so broken. We can just again, it makes way more sense.

From the article:

"[EDIT: I’ve since learned that the developer(s?) behind this are already the laughing stock of the DeFi community, having wrecked each of their 3 previous projects (now 4) — though this might be their biggest hit yet]"

Well, we can already see they screwed up a basic piece of code in the IRON smart contract, so is that really so surprising?

Agreed, but if you are a VC you do basic DD right? And if there is a reddit group calling your new star CEO a scammer, you might check a bit? But yes, full agree.

> but why would Circle want to help out this contract and lose 262 million?

Probably a rhetorical question, but they might decide that it's a price they can pay for trust in their system.

Not sure if I understood where the real value currently is though.

I don't think that's generally true. It is very useful for criminals in countries that don't extradite to the US, but

Many of those same people could make and were making money through other forms of cybercrime for years. Even without cryptocurrencies, new technology will always keep coming out that'll facilitate and potentiate more cybercrime.

To me, the answer there is and has to be geopolitical. Whatever crime they're committing, if it's against a foreign national, they have zero fear of repercussions, and that lack of fear is totally rational because there's basically no chance they'll ever face repercussions even if their real name and address is plastered in a million places. If they knew they could be extradited, or at least sentenced to serious prison time in their own country, and that there was a significant chance of it happening if they were to be identified, then I'm convinced most of them would behave differently.

I guess I can see your point, but I think the usage of "smart" to describe consumer electronics with computational capabilities is a very different usage. Contracts are not "dumb" technologies that are being "enhanced" with computation; contracts and software code are already the same kind of thing. The difference is that contracts-as-code can actually execute contractual obligations rather than just describing them. I wouldn't describe this enhancement as "smart"... perhaps a better term would be "automatic" or "autonomous".

No, much different, in a Ponzi scheme you're fraudulently claiming that the high returns you're delivering your old investors are real, and result from your investing acumen, when in fact they aren't real, they're just money from new investors that was never invested in the first place.

They are comparable in one way however.

The Ethereum interpreter bytecode is stored on the blockchain, but the source code isn't. (It'd be inefficient both for storage and CPU cycle reasons.) Basically like storing a Python .pyc or Java .class file.

There's pretty much a rule of thumb that tokens should always be open source, in part because it's much easier to hide a backdoor if you don't publish the source, and also because cryptocurrency communities generally share the open source, high-transparency ethos. The #1 Ethereum blockchain explorer site has a system that lets you submit source code for a contract, and they verify that the source code compiles to the exact same bytecode.

You can very safely assume that if there's no source, it's malware. For every single instance I've seen where a project doesn't publish the verified source code, it's always been because the code is backdoored.

You can decompile bytecode, but scam projects will often add a ton of obfuscation or even specific things to confuse the decompiler and make it fail to decompile certain parts. Better decompilers will keep getting written, so you theoretically won't ever be able to truly hide what your code is doing even if you don't publish source, but it's sort of moot because verified source code is bare minimum "table stakes" for anyone (competent) to interact with your project.

The caveat being that most investors are non-technical and don't have a clue what any of what I just wrote means and will just invest in whatever if it has a name and a logo. But in that case, they'll invest in a scam project whether or not they publish the source code. And for the percentage who do at least know that no source = scam, they'll still invest in every scam that does have source code, which is most of the scams.

Most chains have a low-level representation which higher-level smart contrast source code is compiled to. E.g.,have a look at the "contract creator creator code" section on this contract:

https://etherscan.io/address/0x1a2a1c938ce3ec39b6d47113c7955...

Ethereum apps are typically written in Solidity before being compiled to EVM bytecode. The EVM bytecode must be public, but one could keep the (more readable) Solidity code private, like distributing an executable without the source. I think it would be unusual though.

The existence of some “absolutely insane” highly-skilled, well-trained, well-funded teams in the field doesn’t mean that there aren’t also lots of poorly-qualified teams without the up-front funding for development trying to cash in on all the money sloshing around the field.

Wow, sounds great. Where have you been working / which cryptocurrencies/services have you been working on?

>There are thousands of people just looking for that one weird trick to get rich.

Increasingly I think they're the smart ones. I'm sitting here working my butt off for a few thousand dollars a month, while these guys raised hundreds of millions of dollars without even being able to grammar check a sentence. Who's the real sucker?

I was not even talking crypto but 'normal' CEOs. I mean a famous one was the guy (do not think he was the CEO but close to him?) from Groupon: he was a known scammer and yet, he gets bingo every time. And many many more.

Edit: whoops I never knew what became of Groupon but I see it was a massive scam altogether. Seems the investors could have known that from the first time they met the founders by just typing some names into Google. How does that work?

Is TFA specific enough for you? It appears to be about the inevitable outcome of imitating banks in an unregulated context. A top level comment here is about the outcry for regulation that this then produces.

I don't see either of those as at all synonymous with "central actor".

I would consider all the founders and early investors who knowingly promote the ponzi scheme as con artists.

I google the definition to charitably give your argument the benefit of the doubt. I don't see how you think phrases like the following make for effective communication or a strong argument:

> If you're having to google the definition of the term maybe there's still a little more you need to learn about it.

    1. I'm trying to dodge the label "Ponzi scheme" for a reason you haven't provided (maybe you think I have millions invested in this shitcoin?)
    2. This isn't a Ponzi scheme, and you don't know what a Ponzi scheme is

Are you saying the only time a contract is disputed is when the other party is evading the law? Nobody abuses the legal system to screw over people without enough resources to fight in court?

> Evading the law (whether the court or a regulatory body such as the SEC [civil] or DOJ [criminal]) is typically a "bad thing" for the person or people intending to or successfully doing so.

Oh wow. If only this were true. If only they were so diligent in punishing other kinds of things.

Here's something I read recently, from the aftermath of the Libor scandal: https://www.sec.gov/news/statement/stein-waivers-granted-dis... . Really highlights how crazy this whole thing is and how there are really two qualitatively different classes with two different sets of rules in our society.

Oh you're right I am confused. I actually don't even understand the point of the price check in the first place. Why does the USDC portion of IRON tokens need to be locked in the smart contract based on TITAN price anyways?

    // Returns (usdc_to_withdraw, titan_to_withdraw)
    def GetWithdrawalAmounts(iron_to_withdraw):
      usdc_price = 1  // guaranteed: USDC price in USD (aka USD/USDC)
      titan_price = GetTitanPrice()  // TITAN price in USD (aka USD/TITAN)
      iron_price = GetIronPrice()  // IRON price in USD (aka USD/IRON)
      usdc_to_withdraw = iron_to_withdraw * iron_price * 0.75 / usdc_price
      assert titan_price > 0
      titan_to_withdraw = iron_to_withdraw * iron_price * 0.25 / titan_price
      return (usdc_to_withdraw, titan_to_withdraw)

> Clear malice was proven beyond doubt in Libor fixing

Where? As far as I saw there was one bank that thought it was obeying a discreet request from the government, and a bunch of banks where traders said usual trader nonsense (which is "malicious" in a sense, but it's very much part of the norms and culture of trading and the expected functioning of a market, just like a good lawyer should make their case as strongly as possible regardless of their personal beliefs about what happened).

> even if all things considered the latter manage to harm millions of people with their actions.

Who was harmed? If there was any effect of Libor fixing, it was likely that people paid slightly lower interest rates on their mortgages.

I have to disagree, but will consider your argument. I just don't think you can write code that does money transmission and publish it and say you are now not doing money transmission because you can't modify it after it is published. Paypal could write some code and publish it on AWS, perhaps they make it so that they can never modify it every again and imagine it functions just fine. Are they now not doing money transmission?

Yeah, 12 hours means you can't even count on watching during business hours, you need to constantly be checking evenings and weekends too.

The main benefit is reducing the incentive for the developers to steal. If you know 90%+ of the funds will disappear before you can do anything then it's much less attractive (where the alternative is making money by fees over time if the protocol is successful).

The risk needs to be balanced with the risk of funds lost because of a smart contract bug that can't be fixed. Different projects make different choices here.

People doing esoteric DeFi are tapped in much more often than that. I'd agree in a broad general use case it's not enough time, but for DeFi as it is today, it's plenty.

So why isn't "the operator of the scheme" synonymous with "the central actor?"

>I see zero good reasons why decentralized schemes can't be ponzi schemes.

Do you know who Charles Ponzi was or why Ponzi schemes are named after him?

Do you know what he did or what Bernie Madoff did? They operated the Ponzi scheme. That's why they were a critical part.

This money really was going into the smart contract, wasn't directly given to old investors, wasn't being siphoned directly into the operator's pocket, all unlike a Ponzi.

You don't know what a Ponzi is and you're trying to save face, I get it.

> $272 million worth of USDC is still locked up in in the contract. Why hasn’t everyone recovered their 74 cents?

Why didn't the masterminds behind this scheme walk away with that cash? Because it was a mistake. Not a genius scheme being run in the shadows.

Sure, but shuffling units around is the starting point of a new financial system. I like to say that DeFi is speed running the creation of a financial system from scratch. Storing value, trading currencies, borrowing/lending, derivatives, insurance, etc. are some of the building blocks of a financial system and all are currently live in the Ethereum ecosystem.

I think some people got sold on this false premise that cryptocurrency would reinvent the entire world, build a new decentralized internet, etc. etc. And then they miss what's actually happening, because it's just "boring finance stuff". This is actually really important stuff that's being built.

I'm very skeptical of crypto but I'd say buying drugs online is probably better done with crypto than with fiat. It's probably the only actual use case that isn't speculation, and it probably dwarfs any legimate use as a day to day currency.

But even then, all the new cryptos are usually totally useless for peer to peer, private transactions since they merely piggy back off the ETH/Binance/etc chain. They often don't even support p2p transactions at all, and are now openly designed just to be hodled or dumped through exchanges

Monero is pretty old by now, but it's still the goldstandard when it comes to security/privacy/opsec, and darknet markets are slowly starting to phase out even BTC (which is a total opsec disaster considering how traceable it is) in favor of Monero.

Algorand is a fairly underground project I've been following, but it basically has taken the good stuff from Ethereum (smart contracts, token-izing) and combined it with the possibilities of Chainlink, along with having a ridiculously fast chain and simple ecosystem. Give them 3-5 years they'll be leading the CYO token space. ETH is increasingly falling behind as they can't get ETH2 out the door and Algorand already has all of it built in along with an incredible competent and politically connected team.

Agree though, smart contracts are where the future lies in many of these projects. Tough to pick up but where I'd be if I were a SW dev.

I think limited scaling so far is one reason for that. With limited transaction space, only the high-value transactions are worth paying the gas fees, and mostly that's people trading stuff around looking for profit.

I'm hoping that when rollups and sharding get tx/sec into five figures, there will be more room for other sorts of applications.

Depends on how strong the cryptography is, no?

Well, to be fair, people write legal contracts without fully understanding what they are writing all the time too. I do disagree that people understand them on most cases.

Things are better on consumer law because it assumes from the start that people are stupid and have no idea what they are doing. But other kinds of contracts have quite large security risks.

This is how ALL of Crypto works. A decentralized ledger means that you cannot call the CEO or CFO of the ledger and have a clearly fraudulent transfer revoked. That is the tradeoff.

eh, for a regular financial contract you need lawyers and judges. There is plenty of counterintuitive law that burns people.

For this one you need programmers and computers.

On both cases, if you go in blind or wing it you might get burned.

So what you're describing is that this is a next-generation Ponzi scheme where nobody goes to jail but a bunch of people still lose money.

But yeah let's keep arguing over semantic definitions.

I'm thankful for financial services that do actually result in capital being efficiently allocated to help create actual innovation. However, it seems a lot of it is either swallowed back by the thing creating it so that it can recursively grow itself indefinitely (the ouroboros again), or just hoarded by individuals and not used in any useful way, or perhaps any way at all.

A lot of capital from the finance industry seems to be used to innovate for, perform R&D on, and bring new products/services to the finance industry. Some of that ends up in the hands of VCs and other investors - but then a lot of them also put most or all it into the finance industry in one form or another, and then put their returns on that into the finance industry as well.

Some subset does go into other industries, and that's certainly good; if the money was acquired ethically, at least. But then a lot of or all of the returns on that probably also go into the finance industry. Some of them will continue to invest in actual things for the rest of their career, in which case it's probably all a net benefit for the particular industry being invested in, and potentially also for the economy and for society, but it kind of feels like squeezing a ten-million ton lemon to produce a pint of lemonade.

Money is a proxy for energy, and energy is a proxy for power. (And by the transitive property, money is a proxy for power, though everyone knows that one.) All three can theoretically be used for good, useful things that benefit humanity. On average, maybe they do or maybe they don't; not sure. But at the extremes, where there's a dense concentration of money, energy, and/or power distributed across a few small clusters, it seems like it typically isn't used that way. And I'm definitely no Marxist in the slightest; I like capitalism in theory and often in practice. It's more the meta-capitalism I don't like.

Things like ERC/BEP-20 tokens are kind of a proxy for the capitalism of capitalism distilled to its purest, rawest, most comical form. Some people with good intentions like Vitalik Buterin do use that to benefit humanity, and work on meta-capitalism with the intrinsic terminal goal of benefitting humanity, but I think most people don't and won't. You need meta-capitalism, just like you (generally) need a government and a military and a police force, but with great power comes great opportunity to ride that bull to the moon and beyond.

Perhaps my opinion will change at some point, but, to me, it evokes intense unctuousness. I think I might even prefer this contemporary Wild West to some extent. It's pure and it's actually honest about its intentions. It's Oceania. There's no bullshit. They tell you what they want and what they're doing in full earnestness with a smile on their face and a hand in your pocket. In various communities, people openly and cheerfully talk about how they know it's all a racket and a game. They know there're absolutely no "fundamentals".

Some seem, or at least claim, to do it because they feel like Wall Street has had a monopoly on it for ages and now they finally get a chance at it without any gatekeepers or corporate masks. Some don't care either way and do it because they want to and they like the dopamine rush from both the "journey" and the "destination(s)". (It's probably a mix of both motivations for most.) Can't say I like it, but I certainly respect it a lot more than the people who dress it up in bespoke clothing.

I really don't hate cryptocurrencies at all. I've been following them for over a decade. My post history here is filled to the brim with lengthy defenses of them, constantly arguing with the stereotypical black-and-white HN skeptic. I've been seriously considering even trying to pivot my entire career into the industry. But I still think it's unlikely I'll ever not dislike finance.

Most places recognize something called a "mechanics lien" that means the police won't get your car back either. Workmen usually have a legal claim to property that they worked on and have not been paid for. Sometimes it requires specific paperwork (more often with real property, e.g. a contractor can place a lien on your house but usually needs you to agree to it before they start work) but often it's implicit. I guess my point here is that this is a scenario with specific legal backing that goes way back into history, which smart contracts don't really have.

I agree that right now the legal system still applies.

The problem is that lots of smart contract enthusiasts embrace them for the same reason they embrace crypto currency: they see it as a way to avoid government institutions that they do not want to have to work with or trust. In fact they want the entire contract to be trustless: agree to the terms, implement them in code, and and since the rest is automated you don't have to trust that the other party won't follow through.

I don't see how that can actually work in an automated fashion. Whether it's traditional government or some other legal system or analog, you need a resolution layer above contract layer, but at that point you've lost a lot if what enthusiasts want in smart contracts.

It is. Being sued for professional negligence is hurty & we earn by inflicting pain on others not getitng hurt ourselves. A static type checker/formal verifier for legal contracts would be worth serious money.

"Sufficient Reliability" still needs mechanisms to resolve the rare issues that occur. A 5 9's system still needs resolutions for the 0.001% scenarios. In the case of your phone's alarm if your phone crashes, runs out of battery, app cache gets corrupted, whatever-- you can intervene with your human judgement to determine an appropriate resolution. What mechanism do smart contracts have for 0.001%?

Your phone's alarm is also not a critical transaction worth a person's life savings or the wealth of a country or a transaction involving life-critical supplies etc. The bar is a bit higher here, and even the most reliable systems ever designed have the ability to insert human judgement when the rare issue happens. Smart contracts are supposed to be appealing because they avoid the need for biased/imperfect judgement in favor of something "trustless", or at least that's the vision many see for them.

Contracts can also have hundreds or thousands of clauses, making "sufficient reliability" a much higher bar than an alarm clock. Especially because many of those clauses entail human concepts that would be extremely difficult to translate into code: What is the algorithm for determining "force majeur"? That's a pretty basic clause that appears in many contracts, but I don't know where you'd even begin to get a computer to understand & properly identify such events.

I don't see a pathway to sufficient reliability in smart contracts anywhere on the horizon, save for very simple cases. Even then, here we have IRON, which should have been relatively simple as these things go, but failed because the simple case of "Titan has no value" was not considered.

> The "legal system" needs to be applied by some kind of oracle or by force to a node operator.

Yes, this is usually how it's done. Business logic is not a legal authority.

Parties to a contract exist in jurisdictions that do not see things this way, and even block chains are rooted in some form on physical media in legal jurisdictions.

In the case if IRON, the 0.75 in actual money exists somewhere, a bank presumably. Wherever that is, the jurisdiction might be friendly for IRON, or not, but there is in a very real sense no pure native environment for smart contracts. At a minimum, the parties involved will always exist in a physical legal sovereign jurisdiction that regards it's own authority as higher than the smart contract and has some ability-- perhaps limited, perhaps extensive-- to enforce that authority.

Not sure big banks, brokers, etc. fear cryptocurrencies. They are already starting to happily make money of those and sell products around them. Banks worked happily in the past with decentralized/local currencies, for example.

The concern might be more on the policy and regulatory side of the world.

True. The universally quantified statement "No cryptographers thing X" is almost certainly going to be false.

Hyperbole on my part, oops. Sorry about that.

I am not a cryptographer, but I do pay attention to cryptographers. Well, some cryptographers.

So thanks to your helpful comment I looked up Silvio Micali. He has rather faint endorsement, but endorsement it is.

In fact, I can think of nothing more profitable for a cryptographer than designing a better cryptocurrency.

It's not strange at all because "now" does not assert "in the past few years" or something. It's just in contrast to when the technique was first developed.

Like, do you think there was a long-standing issue with people not paying their bills because the liens weren't enshrined in law, and a bunch of clever legislators got the brilliant idea to introduce it? No! It's been happening since before laws were written down, and the formal laws were crafted to fit this existing custom.

I think the point is more that if you owe $200M to someone, a court is unlikely to accept "it's irreversibly stuck in a smart contract" as an out.

Courts remain the legal authority, you cannot trade on for other unless provided by law (as in statute), and then it is back again to the courts to interpret. What did both parties really agree to? IANAL, but intentions and assumptions of the parties can matter - for example, quite a few things you cannot waive in some places, irrespective of what you agree or not.

>They are trading one legal authority for another, and this is agreed upon up front. Both parties agree that the code is the legal authority before entering into a contract, which is much different from evading authority after the fact.

The parties might "agree", but who cares? If they are in the US, for example, and the two parties have a smart contract that breaks US contract law, one of the parties can file a lawsuit and attempt to get their money back. You can't go to the judge and say "sorry, the code is the legal authority here".

Agreeing the code is the legal authority means implicitly believing the code is perfect: no bugs, no unanticipated edge cases. Which is just not realistic. So when they arise, who decides what happens?

Formal verification doesn’t help with bad assumptions that went into the design of the program.

>You can write perfect code if you have the right tools and do it carefully.

Obviously you are not a programmer.

> You can write perfect code if you have the right tools and do it carefully.

And you are DJB.

Depends on which jurisdiction alleged fraud happens in. If the parties are anonymous or in "difficult" jurisdictions, it will be pretty difficult.

Fraudulent or not, though, you have a pretty heavy layer of protection as the money has already been transferred, and that money is not easy (close to impossible) to freeze.

Any reversal that happens will be necessarily by a threat outside the blockchain, as the governing body can't actually reverse the transaction. It's a second transaction.

The courts.

Contracts can be unenforceable for reasons that might not be obvious to people who don't do contract law, as well. For example, the concept of consideration is not especially obvious, that contracts are often not enforceable if both parties do not receive consideration, which leads to things like peppercorn payments. I know about that as a layman but a contract attorney would know of many more non-obvious things that must be checked out to avoid having problems actually enforcing the contract. It seems like it would be very, very easy to produce a smart contract which a court would later determine was not enforceable in the first place, and perhaps order reversal of payments or other things.

For one, as a general concept the parties to the contract need to actually understand the terms and courts will somewhat regularly throw a contract out if they think there were implications that were not apparent to one of the parties. Smart contracts seem like absolute minefields for this kind of problem.

A very obvious example: in most jurisdictions, a contract signed by a minor can be rendered null and void by that minor (or their legal guardian) at any time.

I'm not particularly knowledgeable on the topic, but there are all sorts of religious courts (at least in the US). Generally they coexist with the secular legal system.

https://www.pewforum.org/2013/04/08/applying-gods-law-religi...

Sure, that will depend on the courts and specific case, as it seems it works exactly like this mostly. But if you inspected the code yourself and you put your money in anyway and it is gone, you might find that the court will not do anything at all. And who can you shout at then, the moon? I am saying that smart contracts are a special case: they are small pieces of code, if they have a bug, it usually causes major damage and, if they run on the eth chain etc and no one took public responsibility for deploying it, there is no one to sue. We have no way to write this type of bombs without flaws as you rightly say and because of the irrevocable damage and the lack of defendant in most cases, these contracts should not be used at all.

There are already (many) cases like this, but if I write some software and put it in github, someone else deploys it and people die; that is simply not my fault: it is the deploying person. In normal situations, this is easy to find the defendant here: but on the chain, you won't be able to: anyone can deploy anything and you won't know who it was. So unless you to end open source software, you have no case against anyone.

This reminds me of the Toyota Prius (and other models') un-commanded acceleration problem. Should car buyers examine Toyota's code, or should they assume that the gas and brake pedals work as expected?

It's not reasonable to expect software users (even other developer users) to understand or audit code in order to be able to use software -- for anything.

Where’s the part where anybody defrauded anybody? This was clearly incompetence that benefited nobody (certainly the developers would rather not have TITAN implode and all of this USDC locked in a contract...). Embarrassing yes. Fraud? Pretty clearly no

> The vast majority of contracts in (1) does not need enforcing

Of course, people are very careful prior to entering those contracts, because they know how big of a headache it will be if enforcement is needed!

> In fact, anything where there is not fully escrowed payment/collateral/etc. can fail to execute properly if the other side does have not what it needs to deliver/or does not make it available on chain.

Well, sure, if you write a contract that makes it possible for one side not to pay up, then that might happen. Having software run escrow is basically the whole point..

The key thing here is that nobody can force you to pay your taxes. If you refuse to pay you can be arrested and/or go to jail but the change here is that you can't force someone to give you money but you can compel them to.

I like to see cryptocurrency and crypto-assets as a pseudo force of nature. It's not really possible for governments to stop them and they pretty fundamentally change the game for most governments. I personally believe the result of this will be a shift to geoist taxes where taxes are paid on properties or paid by corporations.

Or to paraphrase a US president (Andrew Jackson) when he didn't like a Supreme Court ruling, "make me. Oh right, you don't have an army. I do."

Isn't this ultimately a 'might makes right' argument?

Sigh. If this were the case, all open source is doomed. You are responsible if you deploy/offer it, not if you only wrote it. And the point is, in smart contracts, you will not normally know who deployed it.

If you put on github

Return x>0;

And I deploy this in a production environment that kills people with heart rate over 0, do you have any responsibility? No of course not. I do. You have none.

In short: if you put money into something as smart contracts, the only thing you have, and that is literally the intention of the pundits, is that you check the contracts and trust or not trust them. I do not know how this crosses over to other software that has different properties in this thread. That is not relevant. There is no one to sue or say they did a bad job here: you will not know. That is baked in.

While we disagree on who is responsible for code, I do think we are saying the same thing about cryptos. If you can't fix software later, you're doomed because it all has problems.

Likewise, humans make mistakes in transactions and if they can't be undone... problems.

EDIT: I should clarify that I don't believe software authors are responsible for use, but rather for bugs.

I think we are in agreement and the implementations that can fullfil so what remains is: how can you find the person or group responsible for fixing or getting sued in blockchain land? I can put some malicious code on the eth chain: how will you find it was me. And that is with intent.

But we agree and I will reiterate: without rollback, current human coders cannot write reliable software. So in it's current state, smart contracts are a utopia and no one should trust them, with or without code audit. But if you still want to play a lottery of humanity vs complexity, read the code, think hard and put or not put your money. If you put your money, do not whine after you lost it. You might as well shout at your toilet for the same endresult.