Ethereum’s $150M DAO Opens as Researchers Call for a Halt • Hacker News Board

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#41

Post by darawk » Sat, May 28, 2016, 8:03 PM UTC

zekevermillion wrote: post #20

eloff wrote: post #17

Earlier quoted context omitted.

In a way, this is like Uber or Airbnb, you can't ask permission or you'd be out of business before you managed to change the laws. Asking forgiveness is not only easier than asking permission, sometimes it's the only viable route. They may lose money, they may make some. But it's a grand experiment of a kind that's never been tried before and I'm curious to see the results.

Uber runs up against municipal taxi regulators. The DAO runs up against the SEC, DOJ, and state securities regulators, just to focus on the US cops. These people are a bit more serious than the City of Austin transit authority. As we've already seen in multiple cases, e.g., SatoshiDice, US regulators are aware of efforts to use profit-sharing contracts to raise funds, and view this (correctly) as a securities offerin…

The DAO exists outside of the laws of the United States. If the US curators are arrested, they will be replaced with non-US residents.

This is the fundamental premise of decentralized systems. They are resilient to the interventions of governments. Bitcoin is definitely illegal in many places in the world, and occupies something of a gray area in the US. Yet, it operates just fine.

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#42

Post by CyberDildonics » Sat, May 28, 2016, 8:04 PM UTC

I have to say that as far as flawed systems of incentives go, the one outlined in the article seems pretty tame. I feel like it is something people don't understand in general and something that is often manipulated, but simply not paying attention roughly amounting to an implicit 'yes' doesn't strike me as a fatal flaw.

That being said I think ethereum is very interesting but enormously risky (even more so than some other crypto-currencies). I think experiments like this are fantastic, but starting with 150 million is not. It would be much better in my opinion if it started with 1000 dollars and tried to grow from there gradually.

As far as incentives go, 150 million is a huge incentive to play fast, loose, and dirty by any means necessary to get balance into keys you control and cash out. From what I've seen of kickstarter, the internet is WAY less skeptical than they should be and it seems everyone needs to learn the lessons of their grandparents on how not to lose money to false promises.

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#43

Post by CyberDildonics » Sat, May 28, 2016, 8:05 PM UTC

sillysaurus3 wrote: post #40

https://boards.4chan.org/biz/thread/1271161/wtf Transcript: http://pastebin.com/raw/ATJSADgr One could argue that the thread consists of nothing but trolling, and that no one could possibly be so stupid as to invest their entire life savings, take out loans, and attempt to use credit cards to buy coins. Unfortunately, I've seen it happen. The conversations on that thread are almost exactly the same as they were sever…

Everyone learns their lesson at some price, but for some it is higher than others.

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#44

Post by CyberDildonics » Sat, May 28, 2016, 8:07 PM UTC

force_reboot wrote: post #38

The no vote bias looks like a serious flaw in the DAO. As the authors say, it is safe for an informed investor to split than to vote "no" on a proposal (for reference, users who split are still entitled to the proceeds of any proposal they funded so far). So passive investors would either be in danger of an attack from a bad proposal, or would find a way to automatically split if the investor wasn't available, defeat…

But wouldn't that end up being all or nothing? If there were many investments going on and someone splits, do they retain all the previous investments? I suppose the answer is yes, but then are the same curators working for them?

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#45

Post by [deleted] » Sat, May 28, 2016, 8:11 PM UTC

CyberDildonics wrote: post #43

sillysaurus3 wrote: post #40

https://boards.4chan.org/biz/thread/1271161/wtf Transcript: http://pastebin.com/raw/ATJSADgr One could argue that the thread consists of nothing but trolling, and that no one could possibly be so stupid as to invest their entire life savings, take out loans, and attempt to use credit cards to buy coins. Unfortunately, I've seen it happen. The conversations on that thread are almost exactly the same as they were sever…

Everyone learns their lesson at some price, but for some it is higher than others.

[deleted]

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#46

Post by bunkydoo » Sat, May 28, 2016, 8:13 PM UTC

This ultimately ends with Vitalik receiving a subpoena from the feds on behalf of a U.S. based investor who loses and gets pissed. Then he either complies and builds a backdoor for Ethereum, or he gets banned from the U.S. has trouble going back to Russia because they want the same thing. So he will ultimately become like the Bobby Fischer of crypto in effort to not give government backdoor access to Ethereum. Will it work? Tune in next week!

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#47

Post by bunkydoo » Sat, May 28, 2016, 8:14 PM UTC

darawk wrote: post #41

zekevermillion wrote: post #20

Earlier quoted context omitted.

Uber runs up against municipal taxi regulators. The DAO runs up against the SEC, DOJ, and state securities regulators, just to focus on the US cops. These people are a bit more serious than the City of Austin transit authority. As we've already seen in multiple cases, e.g., SatoshiDice, US regulators are aware of efforts to use profit-sharing contracts to raise funds, and view this (correctly) as a securities offerin…

The DAO exists outside of the laws of the United States. If the US curators are arrested, they will be replaced with non-US residents. This is the fundamental premise of decentralized systems. They are resilient to the interventions of governments. Bitcoin is definitely illegal in many places in the world, and occupies something of a gray area in the US. Yet, it operates just fine.

You've obviously never heard of extradition have you?

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#48

Post by reddytowns » Sat, May 28, 2016, 8:52 PM UTC

curiousgal wrote: post #7

sidko wrote: post #3

Earlier quoted context omitted.

It allows a way to 'split' the DAO, and also take your 'share' of what's left and just leave. For instance, you are already scared and don't want to deal with this anymore, you can just take all the ETH that you put into this and forget the whole thing happened. However, there are some issues with timing, and other attack vectors/flaws in this mechanism outlined in the research being referred to in the article. Here'…

I believe you'd have to wait like 21 days for your ether to clear so that you're completely out. But I am not sure.

It's 48 days. https://daowiki.atlassian.net/wiki/display/DAO/Step-by-Step%...

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#49

Post by aminok » Sat, May 28, 2016, 8:57 PM UTC

bunkydoo wrote: post #47

darawk wrote: post #41

Earlier quoted context omitted.

The DAO exists outside of the laws of the United States. If the US curators are arrested, they will be replaced with non-US residents. This is the fundamental premise of decentralized systems. They are resilient to the interventions of governments. Bitcoin is definitely illegal in many places in the world, and occupies something of a gray area in the US. Yet, it operates just fine.

You've obviously never heard of extradition have you?

The US doesn't rule the world (yet).

Re: Ethereum’s $150M DAO Opens as Researchers Call for a Halt

#50

Post by cloudjacker » Sat, May 28, 2016, 8:58 PM UTC

zekevermillion wrote: post #13

eterpstra wrote: post #5

Discussion around the issues outlined in the report have already begun (before the report was published) in the DAO forums. It's not unexpected that there will be problems. This has never been done before. But the fact that this report exists, the problems are being discussed, and there are already talks of proposals for resolving some of the issues is a good sign that the DAO is working as intended... The community…

The "investors" risk losing all their money, and the curators and contractors risk going to prison because they are conducting an illegal securities offering with no valid exemption.

That is an interesting thing to say, so because the DAO acts as one entity, one could easily rely on a Reg S + Reg D exemption to get around pesky US laws. Reg S because the dao would be a foreign entity, and Reg D because it would be a private placement with only one investor.

So no disclosure laws necessary!

And honestly nobody in the international community cares about other country's securities laws. You can copy and paste some small exemption text from bank's private placements, so something for the UK, Hong Kong, Japan to make it also exempt.

The DAO itself relies on sanctioning from Switzerland just like Ethereum, so I'd say all the bases are covered, until it gets challenged.

But individual liability for all parties is pretty mitigated from the threat of securities regulators.