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Autonomous corporation “The DAO” has become the biggest crowdfunded project

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Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#181

Post by will_brown »

rboyd wrote: post #165
vectorpush wrote: post #160

Earlier quoted context omitted.

> These contracts are enforced by math. Breaking them isn't a possibility. Math cannot "enforce" a contract, it can't even understand the terms of the agreement, much less enforce it. > We're in the beginning stages of seeing our traditional corporations and nation states morphing into something new and barely recognizable. This kind of hyperbolic nonsense strains credulity.

Smart contracts are enforced programmatically, that's kind of the point. The future is always hard to believe until it's here. You can say you disagree and state why. But please don't call me a gullible idiot and then try to dress it up in fancy vocabulary. This kind of reply seems common in your comment history, like you're just generally angry around blockchain threads for some reason.

>Smart contracts are enforced programmatically, that's kind of the point.

Can you give hard examples of how enforcement can be done programmatically and mathematically?

For example, I contract you to do X in exchange I will pay $Y and to get things started I give you a 10% down payment. If you don't do X, even in a court of law, it would be extremely rare for a court to order you to do X, rather they will generally order you to return my deposit and any additional damages I can prove as a result of your breach. Explain how the smart contract programatically forces you to do X, or how the smart contract can calculate real world damages above and beyond the 10% deposit? Alternatively, if you do X, but I think its subpar and refuse to pay unless you redue X to my standards, explain how the smart contract can determine who is in breach you for X not being up to standard or me for not paying.

Trust me it sounds great to say math and code enforces a contract and ensures it can't be breached, the point is putting a contact on the block chain may prove the contract exists (though even that is debatable) but it can't self enforce.

More generally in law, almost everyone knows less than 10% of cases go to trial, yes the typically settle, but this is also because when there is no "issue of material facts" a judgment can be awarded without trial, this is almost never the case in breach of contract cases, because there is always a question of fact: was the contract breached or not?

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#182

Post by rspeer »

Taek wrote: post #170
pjc50 wrote: post #148

Earlier quoted context omitted.

100% secure AFAIK the formal verification mechanism for EVM programs is not yet complete, so that's a risky claim. Not to mention that the people involved are interacting with it using ordinary PCs, so spear-phishing them might be the easiest way to steal the $120m.

And, to the best of my knowledge, it has not been reviewed by experts. Platforms like this are notoriously difficult to build securely. Not to mention, there are huge liabilities from a legal/securities perspective.

I'm wondering how this is different from a game of Nomic (the game where people vote on the rules of the game) played for money.

Now, Nomic can be fun. But a game of Nomic typically ends up with someone winning, not by gradually achieving the intended goals of the game that people wrote into the rules, but by exploiting a major flaw in the ruleset that lets them rewrite the game to be one that they instantly win.

When someone wins at the game of Ethereum, how much of other people's money do they walk away with?

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#183

Post by rboyd »

will_brown wrote: post #181
rboyd wrote: post #165

Earlier quoted context omitted.

Smart contracts are enforced programmatically, that's kind of the point. The future is always hard to believe until it's here. You can say you disagree and state why. But please don't call me a gullible idiot and then try to dress it up in fancy vocabulary. This kind of reply seems common in your comment history, like you're just generally angry around blockchain threads for some reason.

>Smart contracts are enforced programmatically, that's kind of the point. Can you give hard examples of how enforcement can be done programmatically and mathematically? For example, I contract you to do X in exchange I will pay $Y and to get things started I give you a 10% down payment. If you don't do X, even in a court of law, it would be extremely rare for a court to order you to do X, rather they will generally o…

As a hard example consider the typical crowdfunding protocol. The contract (in english) is roughly: if this campaign hits goal before a deadline passes, all the backers pledge their money; or if the deadline comes before hitting the goal the money is returned to backers.

In today's world we rely on kickstarter programs or staff, credit cards and banking. Codified using a smart contract these rules can be executed automatically such that the backers are never at risk. This is what we mean when we say enforcement is automated.

This is a canonical example, as seen here http://ether.fund/contracts/crowdfund

The reason the contract can be enforced is because in many of these smart contracts funds are held in escrow and are transacted only by the distributed app without the requirement or possibility of human involvement.

Also check out Section 1.5(3) in [1].

Not all contracts can be executed and evaluated as smart contracts. The kinds of work agreement contracts you describe wouldn't be a natural fit. Some folks have suggested novel alternatives which could fit into smart contracts such as voting to elect delegates, arbitration courts, reputation systems, etc. when things get fuzzy.

Obviously it's not a 1:1 replacement and I didn't mean to imply that it was.

I just think it could be a mistake to dismiss this technology and the changes that could be coming.

[1] A LAWYER’S INTRODUCTION TO SMART CONTRACTS http://www.crypto-law.com/doc/A%20Lawyer's%20Introduction%20...

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#184

Post by will_brown »

drcode wrote: post #119
dragonwriter wrote: post #113

Earlier quoted context omitted.

> I guess what I'm saying is that Uber and the DAO both operate in a legal grey zone- What is required to be a corporation is not really a legal gray zone. The DAO doesn't operate in a legal gray zone as to that characterization, its just flat inaccurate. Insofar as the DAO is a mechanism for constructing contracts between actual legal persons (either natural persons or corporations), it may operate in a poorly-teste…

I hear you, but I don't think I've ever used the word "corporation" in this forum or claimed that the DAO is a corporation, or directly disputed any claim made by another comment as to whether the DAO is or isn't a corporation. Whether or not the DAO meets the definition of a "corporation" doesn't seem like a very interesting question to me, and I think it's too early to know how/if it matters if the legal system use…

I would define DAO as blockchain based investment club software[1]. The problem is, whether you called DAO a corporation or not, DAO raised $100+M on the basis of being an autonomous corporation, something that can not exist under the law any more than a corporation owned by cats. If the investors are not educated enough to know they invested in a legal fiction, its safe to say they bought it hook link and sink that DAO offers more transparency, shareholder control or flexibility than existing corporate structures...and even if they could exist, there is nothing to suggest any of that is true.

If people want to pool their money in a corporate structure (LLC or partnership) and vote on various investment opportunities, that's great, but its nothing new or paradigm shifting. Corporations without shareholders/owners? Nothing new, but that does not make them autonomous.

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

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#185

Post by homero »

street wrote: post #36

The DAO isn't actually worth 120 million. For one, it's based on the price of ETH, which would completely crash if you attempted to sell even a few million worth. Secondly, everyone can withdraw their funds from the DAO before any funds are sent to projects. Many have invested because those who invested early make money from those investing later, since the number of "DAO tokens" you get per "ETH" has gone down over…

Yeah it's a scam but people who are afraid of bitcoin love shitcoin

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#186

Post by vectorpush »

rboyd wrote: post #165
vectorpush wrote: post #160

Earlier quoted context omitted.

> These contracts are enforced by math. Breaking them isn't a possibility. Math cannot "enforce" a contract, it can't even understand the terms of the agreement, much less enforce it. > We're in the beginning stages of seeing our traditional corporations and nation states morphing into something new and barely recognizable. This kind of hyperbolic nonsense strains credulity.

Smart contracts are enforced programmatically, that's kind of the point. The future is always hard to believe until it's here. You can say you disagree and state why. But please don't call me a gullible idiot and then try to dress it up in fancy vocabulary. This kind of reply seems common in your comment history, like you're just generally angry around blockchain threads for some reason.

> Smart contracts are enforced programmatically, that's kind of the point.

That is a tautological statement. Smart contracts are not "enforced" programmatically in any sense of the word that is distinct from all other pieces of software since the rules of all programs are "enforced programmatically" by definition. "These contracts are enforced by math" is a meaningless platitude.

> But please don't call me a gullible idiot and then try to dress it up in fancy vocabulary

I didn't call or imply that you're a gullible idiot. I chose my words for their specific meaning, not for the sake of "fancy vocabulary". I might be mistaken but I think you're misinterpreting the meaning of the phrase "strains credulity", I'm not calling you gullible, I'm saying that your statement invokes feelings of skepticism because it's grandiose, wildly speculative, and generally unsubstantiated.

> The future is always hard to believe until it's here.

Not really. The future is pretty believable most of the time, it's relatively rare to face a paradigm shift that alters our expectations of the future in a fundamental way; most of the time, things move along more or less as expected from an arbitrary point in time (of course, the farther you go in time from a given point, the more unexpected things may become, but they are also exponentially more difficult to predict with any expectations of certitude).

> This kind of reply seems common in your comment history, like you're just generally angry around blockchain threads for some reason.

I won't comment on your assumptions about my emotional state, but I'll say that I think blockchains are a very cool technology (including bitcoin), but I find the excessively bombastic claims about how these technologies are going to alter the course of human history to be absurd and worthy of rebuffing.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#187

Post by will_brown »

rboyd wrote: post #183
will_brown wrote: post #181

Earlier quoted context omitted.

>Smart contracts are enforced programmatically, that's kind of the point. Can you give hard examples of how enforcement can be done programmatically and mathematically? For example, I contract you to do X in exchange I will pay $Y and to get things started I give you a 10% down payment. If you don't do X, even in a court of law, it would be extremely rare for a court to order you to do X, rather they will generally o…

As a hard example consider the typical crowdfunding protocol. The contract (in english) is roughly: if this campaign hits goal before a deadline passes, all the backers pledge their money; or if the deadline comes before hitting the goal the money is returned to backers. In today's world we rely on kickstarter programs or staff, credit cards and banking. Codified using a smart contract these rules can be executed aut…

>if this campaign hits goal before a deadline passes, all the backers pledge their money; or if the deadline comes before hitting the goal the money is returned to backers.

Let's pretend the campaign hits its goal and gets all the funding. There are still a number of breaches that can occur after the fact at which point the contract/math/programming is not going to be able to enforce anything one way or the other.

For example, as part of my pledge to the campaign the campaign promised me (and thousands of other backers) prizes. The contract can't do anything to enforce me getting my prize or it can't return my funds because they have been released to to company already. We have seen this time and again where the projects fail and refuse to return the money, the contracts themselves state the backers remedy is at law.

Another example, I pledge $10,000 and funds get released to the campaign, but turns out I am a minor and as such a contract is legally unenforceable against me, not only that it turns out I used my parents credit card without permission, the smart contract isn't going to be of any help here either. Funny enough this only raises another potential breach, bc without my $10k the goal wasn't reached, so some backers now want their money back and others don't, is the campaign in breach if it doesn't return the funds? That is a question of fact for the court not one a smart contract can resolve.

How about if I back something, funds are released, and then I do a charge-back and the CC company reverses the charge, I am likely in breach, but again nothing the smart contract can do about it.

>I just think it could be a mistake to dismiss this technology and the changes that could be coming.

Trust me I have no problem with technology and escrow accounts, they certainly help facilitate the performance contracts. But marketing of "smart contracts" as something self-enforcing based on math and programming? That doesn't exist even in the canonical example of smart contracts.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#188

Post by deftnerd »

cloudjacker wrote: post #145
vkou wrote: post #141

Earlier quoted context omitted.

What stops non-blockchain code from making purchases, hiring people, etc? Just because it uses a third party (A bank account) to store value doesn't make my WidgetFactoryFactory AI any less of an autonomous corporation.

That entirely depends on if we are talking about this DAO or DAOs in general. A DAO focused on gaining revenue doesn't need to hire people to achieve that. There a decentralized asset exchanges where other companies have raised capital. A DAO could access those to buy shares completely programmatically, for example. It could trade oil futures till eternity if it wanted. It could create a contract for an agent at a pa…

I'm sure that eventually services will start up that target DAO's as consumers directly, but until that time it seems that there is an opportunity for a company to start up that could provide a "translation layer" for DAO's.

It could provide the ability to hire marketing services, rent servers, perform accounting and auditing, hire employees, perform security audits, provide legal services, and interface with "real world" legacy companies like manufacturers and shipping services.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#189

Post by speakeron »

street wrote: post #116
benjaminmbrown wrote: post #110

Earlier quoted context omitted.

It actually did go down 50% from $15ish to $6ish and recovered. Early adopters trying to get rich = all early stage investing so what's your point?

That's because of the tiny liquidity. Nowhere near $120 million was sold, and it still lost 50%. Now try selling tens of millions worth, and see what happens.

> That's because of the tiny liquidity. Nowhere near $120 million was sold

Actually, more was sold during this period. In just the last 24 hours on Poloniex, the volume was 20 million USD.

Re: Autonomous corporation “The DAO” has become the biggest crowdfunded project

#190

Post by desdiv »

drcode wrote: post #89
street wrote: post #71

Earlier quoted context omitted.

I just sold one of my hairs to myself for $10. Is my head now worth a million? With Apple, there's intrinsic value to consider. And frankly, if you sold enough Apple stock for it to go down 50%, I'd personally start buying. I doubt that's the case for ETH, where there's only early adopters buying it hoping to strike it rich.

So you're saying the intrinsic value is certain to be lower than it's current market value? I have good news for you: You can become rich by simply shorting ether on Kraken and Poloniex!

Plenty of people shorted Bitcoin on Bitcoinica, but they didn't lose their money when BTC went up. They lost their money when Bitcoinica went down.
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