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points by rwmj 6 hours ago | 0 comments

I thought the point of crypto was no takesies-backsies?

That hasn't been true for years.

Back in 2016 a then-huge Ethereum smart contract called "The DAO" [1] had a loophole that let an attacker extract a third of all the funds.

But a lot of the developers and miners had either lost money themselves, or had friends who'd lost money, or felt the embarrassing incident was devaluing their own Ethereum holdings. So they decided to allow takesies-backsies.

There's probably a philosophical lesson there about power and who the rules really apply to.

[1] https://en.wikipedia.org/wiki/The_DAO

[–] chao- 5 hours ago

I vividly remember a number of discussions/debates during that time (including on HN). I was more favorable to cryptocurrency in those days, and one of the things that contributed to my disillusionment was watching the people deepest and closest to it rediscover financial regulation from first principles, now that it was in their interest.

[–] throwaway132448 5 hours ago

Witnessing the same people discover philosophy from first principles in the face of AI has been similarly farcical, as if we’re the first people to try and wrestle with a definition of intelligence.

[–] cheraderama 4 hours ago

Philosophy, unlike financial regulation, isn't generally forced on people.

[–] narrator 4 hours ago

Yeah it is. It's called law. For example: when is intent important or a mitigating factor in a crime? When is it not important. Very philosophical.

[–] nonethewiser 3 hours ago

By that logic financial regulation is philosophy too but that makes the original comparison of financial regulation to philosophy non sensical. You’re shifting the terminology beneath out feet.

Law is downstream of philosophy. Youre forced to deal with conclusions that may be based in philosophy (or they may be arbitrary or self interested). Nobody makes you hold a position on mens rea. In that way you can ignore the philosophy.

[–] throwaway132448 4 hours ago

I don’t think I understand what you’re trying to say.

In the literal sense, people have been forcing their philosophy on other people for at least as long as we’ve had societies, so I assume it’s not that.

[–] nonethewiser 2 hours ago

Arent you disagreeing with yourself? You say these people are just now wrestling with the question of what intelligence is despite it being a longstanding philosophical question. So it clearly wasn’t forced on them.

[–] michaelt 4 hours ago

I myself was held prisoner by John Searle for 20 years, my only contact with the outside world by notes slipped under the door written in Chinese - a language I do not speak.

[–] jojobas 2 hours ago

You take not being subjected to say Marxism-Leninism at every stage of your life for granted.

[–] ex-aws-dude 5 hours ago

That is the tech bro circle of life

Invent Notion then keep adding features enterprise customers want until you're re-inventing JIRA/Confluence

Who left this stupid fence here?

[–] ahartmetz 50 minutes ago

Laws and contracts are just words unless there is someone willing and able to enforce them. Which is how constitutions are regularly ignored and perverted by dictators.

[–] phire 4 hours ago

The DAO incident was a special case. It was only sane to do the rollback because the stolen funds were time-locked up for 28 days.

Ethereum never did it again, rolling back hacks didn’t (and couldn’t) become normal policy. IMO, they shouldn’t have made an exception, as it set a bad example.

I’ve seen a few other small projects attempt to do rollbacks since, but it usually turns into some kind of mess. In most hacks, the coins aren’t time-locked and quickly get laundered through smaller exchanges (and other services) which act as mixers. The stolen coins end up in the hands of a bunch of innocent people, and the rollback then causes way more harm as those users lose their coins.

[–] vvillena 4 hours ago

The unforked variant of the network was kept alive for years. Why didn't it prevail over the forked variant?

[–] monk_grilla 3 hours ago

I don't think this counts as takesies backsies. This incident clearly followed the code is law principle, the whole point is that a majority forms the chain of truth. In this case, a majority decided to splinter and use a different chain where the incident never occurred.

As far as I understand blockchain, that is the system working as intended. Some nodes choose to run Ethereum Classic and some choose to run Ethereum. Isn't that the whole point? Decentralisation?

[–] toyg 6 hours ago

Those who cannot understand the monetary system are doomed to reimplement it.

[–] bell-cot 4 hours ago

Or, as Upton Sinclair noted, what a man can understand is closely aligned with his current self-interest.

[–] crtified 5 hours ago

...while, generally, being thoroughly fleeced by whichever set of wolves (who do understand monetary systems very well indeed) gets wind of the situation and manages to snag the best seats at the feeding trough filled with naive money.

[–] dmitrygr 3 hours ago

in lisp

[–] manofmanysmiles 6 hours ago

Do you understand the monetary system? If so, what specific steps do you suggest I take to acquire a similar understanding?

Edit: the downvotes are suggesting I'm missing something. I think my communication style could be improved.

[–] danielmarkbruce 4 hours ago

Talk to chatgpt about how a checking account works, and really understand what happens when you put some money in the bank, and when you transfer that money to another person at another bank, how it's accounted for, how the banks actually do that transfer.

That's 80% of the thing right there.

[–] trollbridge 4 hours ago

The banks and government go out of their way to make fraud difficult and prevent accountholders from being defrauded of their deposits.

[–] 12_throw_away 1 hour ago

> If so, what specific steps do you suggest I take to acquire a similar understanding?

School! Teachers! Classes!

Seriously, the traditional higher ed system is still a very good place to learn things like this. (I honestly tend to forget about it since academia hasn't really caught up at teaching software engineering, but that's really the exception rather than the rule ...). For traditional subjects like finance/economics, you can absolutely find inexpensive extension courses taught by people who care about pedagogy.

[–] cheraderama 5 hours ago

Reply to the edit: the parent comment was making a joke (though maybe there is some depth to it) and your reply sounds like a rhetorical question by a spoilsport. Unfortunate!

ETA: it's a joke because the original saying is "those who don't know history are doomed to repeat it"

[–] manofmanysmiles 4 hours ago

Thanks!

[–] collinmcnulty 5 hours ago

MIT opencourseware has an intro to finance course that was taught as the financial crisis was unfolding. I highly recommend it.

[–] toyg 5 hours ago

Going to school and reading up on how and why we got where we are...?

Some people (particularly criminals and oligarchs) might not like them, but most of the structures around financial movements exist for very practical reasons, often stemming from the will to uphold the rule of law. Obviously nothing is perfect (the US have an excessive level of control, VISA/Mastercard are de-facto monopolies, etc etc), but one cannot seriously think that the way to fix things is to reimplement everything from scratch in a wild west of shady unaccountable operators...

[–] iugtmkbdfil834 5 hours ago

<< one cannot seriously think that the way to fix things is to reimplement everything from scratch in a wild west of shady unaccountable operators

One absolutely can, but I think things have to first get sufficiently difficult for ordinary folks to even notice. Fortunately ( sarcasm tag here for otherwise perfectly normal individuals, who may be missing some caffeine in their organism ), given that the war is coming along with various related national security restrictions, we may soon be able to experience that particular slice of fun.

[–] manofmanysmiles 5 hours ago

My intuition is saying: the system arose naturally and intelligently over a long period of time, and even with its flaws has a lot of "load bearing legacy code" that few people understand, and new "engineers" think they'll just rewrite the whole thing from scratch and delete the "junk DNA" to use another metaphor. A little time passes and the beautiful clean rewrite collapses because of "totally unforeseeable circumstances" and the "old broken legacy system" is used to save the day. Somewhere a senior "monetary engineer" rolls over in his grave...

Any recommendations for books? Or even podcasts?

I don't have zero understanding. It sounds like you have a deeper understanding than I do.

[–] kube-system 5 hours ago

I can't think of a specific episode relevant here, but this is a good economics podcast in general:

https://www.npr.org/podcasts/510289/planet-money/

[–] TheOtherHobbes 5 hours ago

The entire financial system is a chaotic boundary between thieves and opportunists, and people who want to keep thievery and opportunism under enough control to keep the system nominally workable.

It's always been like this. Which is why financial systems blow up and/or collapse regularly.

[–] ashkankiani 1 hour ago

Watch Yanis Varoufakis videos on youtube.

[–] HFguy 5 hours ago

If you want to quick primer to read tonight I suggest “The Economic Organization of a POW Camp by Radford”. Will be free download.

[–] Jhsto 6 hours ago

Doesn't apply for USDT and USDC which can freeze funds with a court order.

And like the DAO hack on Ethereum showed, if most people who run blockchain software decide that something never happened, they can revert transactions that way.

[–] Hamuko 6 hours ago

>And like the DAO hack on Ethereum showed, if most people who run blockchain software decide that something never happened, they can revert transactions that way.

Isn't that a pretty integral part of the blockchain? 51% attacks were even featured on the HBO show Silicon Valley.

[–] wmf 4 hours ago

Fixing the DAO hack wasn't done via a 51% attack. In most/all blockchains protocol changes aren't done by simple majority vote.

[–] baobabKoodaa 24 minutes ago

Yes it was done by 51% attack. The chain split into ETH and ETC.

[–] wmf 23 minutes ago

Not every chain split is a 51% attack.

[–] baobabKoodaa 8 minutes ago

Sure, some chain splits fail to get any significant support, so they don't reach anywhere near 51% of mining power. This one did. Hence, it's called a "51% attack".

[–] jml7c5 6 hours ago

The value in USDT and USDC comes from the fact that they can (theoretically) be redeemed for real US dollars. One thing the issuers can do is announce "we will never accept redemption requests for these particular stolen coins", making them more or less worthless.

[–] grey-area 5 hours ago

Oh so you're saying a central authority can declare your currency worthless at any time? Good to know. Sounds very like a central bank issued currency though?

[–] codedokode 4 hours ago

It's literally in USDT contract [1], see line 264. USDT is implemented as a contract in several other networks like ETH and has a blacklist. So every USDT operation is a record in ETH blockchain that calls one of the methods (like "transfer" or "add to blacklist").

[1] https://etherscan.io/address/0xdAC17F958D2ee523a220620699459...

[–] dlubarov 1 hour ago

This is a purely optional part of the crypto ecosystem, so I don't see how it's an argument against crypto in general.

One can also burn tokens, just as one can burn cash, but we don't tend to hold that against either systems since it's purely optional.

[–] cowlevel 5 hours ago

Stablecoins are literally central banks. Decentralised coins are literally decentralised central banks. Bitcoin's algorithm is a central bank.

[–] grey-area 4 hours ago

Well I don't think they're very decentralised, which was the original premise.

Any rules can and have been changed by those with leverage to do so (be that exchanges, miners or devs), in the end any system like this storing value is captured and controlled.

[–] broken-kebab 2 hours ago

They are decentralized cause they operate on a sort of consensus between nodes as was original premise. Are they "very decentralized" depends on your definition of "very", of course, and techical realities of a particular situation.

[–] icepush 4 hours ago

Decentralized central banks - are these the finance equivalent of dehydrated water ?

[–] xaksnTMu2 6 hours ago

That was already proven false after ETH fork on 2016-07-20, that rolled back funds stolen in DAO hack.

[–] NoidFonsense 6 hours ago

don't bet against the house. eventually you have to cash the chips out for real money, and the house might throw out the old chips.

Unless the house is monero or something and you want a lifetime supply of drugs.

[–] eagerpace 6 hours ago

Centralized decentralization

[–] hgoel 5 hours ago

Turns out that even crypto's rules only apply if you're poor.

[–] basch 5 hours ago

It’s always been that the voters determine reality.

[–] lossolo 2 hours ago

Stablecoins like Tether and USDC can freeze funds held in their contracts, they can even destroy funds in blacklisted accounts:

> function destroyBlackFunds (address _blackListedUser) public onlyOwner

[–] stackghost 6 hours ago

The idiots that wanted no takebacks are the same ones who lacked the critical thinking ability to foresee this exact situation.

[–] iugtmkbdfil834 5 hours ago

No takebacks make perfect sense UNTIL you hand over your keys to a third party;p

[–] qwbar 6 hours ago

Well, Tether was started by an Epstein friend and first handled by the CIA Deltec bank in the Caribbean. Now it is handled by Lutnick's Cantor & Fitzgerald and is in Bukele's El Salvador.

Don't mess with Tether, it is practically state owned.

[–] bflesch 5 hours ago

Interesting, so it ties into the NSA vs CIA war? Some nerds from NSA/MIwhatever launched crypto, then the CIA trust fund nepo kids hijacked/weaponized it through tether

[–] FireBeyond 5 hours ago

There's an amazingly hilarious interview with the Deltec's "Deputy CEO" and CNBC back in the day:

- was conducted from his gaming rig

- about Deltec's (and therefore Tether's) money movements being several times larger than all the banking in their country was due to people misunderstanding the country's two banking licenses, the names of which HE "couldn't remember right now" (the Deputy CEO of a bank who can't remember the name of the banking licenses where they operate?!?), and he "wasn't sure which [banking license] the bank has, but we might (emphasis mine) have both"

- oh yeah, said Deputy CEO's "resume": 33 years old, by his LinkedIn claimed to have graduated HEC Lausanne in Switzerland with a Master of Science at the age of 15... celebrating his graduation by immediately being named Professor of Finance at a university in Lebanon. While dividing his spare time between running hedge funds in Switzerland (called Indepedance [sic] Weath [sic] Management) and uhh... Jacksonville, FL.

Once CNBC's viewers started ridiculing and questioning both Deltec Bank and Tether and when that looked hilariously bad, they removed his info from the bank's website.

And when that looked bad, they added it back.

And when that looked bad, they removed the bank's whole website, and replaced it with a broken WP template with no working links.

Hey, look, several years after that, go to Deltec's website. "Ultra sophisticated private banking" running on a different WordPress site. "Client login"? "This site can’t be reached Check if there is a typo in ebanking.deltecbank.com. DNS_PROBE_FINISHED_NXDOMAIN". Just as has been the case for years.

... and then the entire bank website was replaced with a low-effort WordPress template. Their online banking was Javascript hard coded to refuse all login attempts.

"Sounds legit to me", said the crypto bros. "Fuck the regulatory system. This is the new era."

[–] m348e912 4 hours ago

Is this the interview you were referring to? (It's not a CNBC interview, so I wasn't sure)

https://www.youtube.com/watch?v=rQ3nQ8-KY28

[–] FireBeyond 2 hours ago

It may be - there was also a CNBC interview, but this feels very similar, and I remember this host.

[–] razodactyl 3 hours ago

Shhhh. If we keep closing the book and staring at the cover the whole illusion of shared societal norms breaks.

Let's continue reading...

[–] aidenn0 5 hours ago

Most crypto is "majority rules" where the majority is either "majority of the currency" (proof of stake) or "majority of the mining power" (proof of work).

In this case, iFinex has the explicit ability to freeze funds in Tether.