A hacker stole $31M of Ether – how it happened, and what it means for Ethereum • Hacker News Board

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#161

Post by edzc92 » Fri, Jul 21, 2017, 9:41 AM UTC

spuz wrote: post #144

adrianN wrote: post #74

Earlier quoted context omitted.

Well, what's the point of having a smart contract if it's not the final authority? We already have contracts that require highly paid humans to judge whether they've been broken or not. To me at least Etherium was dead the moment they chose to fork because they felt a contract was "hacked".

> Well, what's the point of having a smart contract if it's not the final authority? I think this is a common misunderstanding of Ethereum and blockchains in general. The current Ethereum blockchain is authoritative only as long as a majority of it users consider it to be authoritative. The same applies to Bitcoin. No single person decided to fork Ethereum after the DAO was hacked, it was decided by a quorum of Ether…

You forgot when the people that run ethereum made the default vote choice as the hard fork. This is important.

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#162

Post by davidgerard » Fri, Jul 21, 2017, 9:41 AM UTC

PhilWright wrote: post #57

Is it possible to track where the money goes from the hackers account onwards? Or is then opaque? How easy will it be for the hacker to move the funds around so it cannot be traced back to the theft?

It is, but it turns out exchanges don't actually care. Bitcoins from the Bitfinex hack are slowly being dumped on exchanges, for example. It's like someone rocked up to a bank with a big duffelbag full of dye-stained notes known to have been stolen from another bank, and went "no worries lol".

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#163

Post by jacquesm » Fri, Jul 21, 2017, 9:43 AM UTC

canoebuilder wrote: post #125

jacquesm wrote: post #111

Earlier quoted context omitted.

You still don't get it. The law will not have anything to say about smart contracts because the law will not be able to enforce a contract one way or another depending on some judge but it will simply execute and that's the end of that . This so that some guy in China or India and some guy in the United States can agree on terms without having to haggle over whose legal jurisdiction will kick in if and when there is…

>This so that some guy in China or India and some guy in the United States can agree on terms without having to haggle over whose legal jurisdiction will kick in >there is no way around a smart contract environment that actually works. What about the present system where people develop trusting relationships in business and elsewhere and deal with the occasional anomalies and breaches of trust as they arise, but in t…

> Is that a way around it?

No, that's an alternative, and smart contracts are attempting to become a way around that.

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#164

Post by kahnpro » Fri, Jul 21, 2017, 9:48 AM UTC

AsyncAwait wrote: post #157

ckastner wrote: post #130

> Having sounded the alarm bells, a group of benevolent white-hat hackers from the Ethereum community rapidly organized. They analyzed the attack and realized that there was no way to reverse the thefts, yet many more wallets were vulnerable. Time was of the essence, so they saw only one available option: hack the remaining wallets before the attacker did. > By exploiting the same vulnerability, the white-hats hacked…

> Next time, I'm going to use this case as a counterexample, because when the solution to the problem of "hackers robbing banks" is "vigilantes robbing the remaining banks", something is very wrong with your system I can see what you're saying, but I don't think that this is a problem with cryptocurrencies specifically , it's a problem with buggy software, yes, but it's something that is the case with every dangerous…

This is a problem that everybody seems to skip over with cryptocurrencies.

Cryptocurrencies are being sold as eliminating trust and allow us to rely on the cold certainty of mathematics. Only trust hasn't been eliminated from the system, it's just been shifted from a central bank to the authors of the software client you're using. To the majority of the miners in the network.

The awful politics, lies, greed, corruption, are still here in all their glory.

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#165

Post by return0 » Fri, Jul 21, 2017, 9:51 AM UTC

ckastner wrote: post #130

> Having sounded the alarm bells, a group of benevolent white-hat hackers from the Ethereum community rapidly organized. They analyzed the attack and realized that there was no way to reverse the thefts, yet many more wallets were vulnerable. Time was of the essence, so they saw only one available option: hack the remaining wallets before the attacker did. > By exploiting the same vulnerability, the white-hats hacked…

> something is very wrong with your system

To be clear, neither of the two situations is "more moral" than the other. In the end however, the question remains: who you trust. Governments have resolved the question long ago (by enforcing trust), cryptocurrencies are just now starting to face the same question. You are correct however that who you Trust remains the greatest issue behind creating a currency.

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#166

Post by canoebuilder » Fri, Jul 21, 2017, 9:51 AM UTC

jacquesm wrote: post #163

canoebuilder wrote: post #125

Earlier quoted context omitted.

>This so that some guy in China or India and some guy in the United States can agree on terms without having to haggle over whose legal jurisdiction will kick in >there is no way around a smart contract environment that actually works. What about the present system where people develop trusting relationships in business and elsewhere and deal with the occasional anomalies and breaches of trust as they arise, but in t…

> Is that a way around it? No, that's an alternative, and smart contracts are attempting to become a way around that .

Well it's not really an alternative, it's just reality at the moment, so long as smart contracts are more theory than practical.

What if trust is a feature not a bug? Why is it something we need to engineer around?

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#167

Post by will_brown » Fri, Jul 21, 2017, 9:55 AM UTC

jacquesm wrote: post #101

wildmusings wrote: post #100

Earlier quoted context omitted.

As long as real people can be hauled before a real court, judges and lawyers--but more importantly, the law --will be highly relevant.

You really just simply do not get it. Just like the law can not define Pi to be 3 the law should not be able to influence the outcome of a smart contract if smart contracts work at all because that is how it is intended to work, smart contracts are supposed to be the entirety of the agreement, no outside interpretation should make a difference nor could it make a difference. This is where the Ethereum crowd has - in…

Whether or not you (or anyone else) think the law should influence the outcome of smart contracts...it certainly does.

So far a few states (US) have passed laws regarding "blockchains", "smart contracts" and the like. For example, seeking to avoid any legal uncertainty surrounding blockchain transactions and smart contracts relating to certain digital assets, Arizona passed HB 2417, the following on point:

- A very specific definition of “blockchain technology” as a “distributed, decentralized, shared and replicated ledger, which may be public or private, permissioned or permissionless, or driven by tokenized crypto economics or tokenless” and provides that the “data on the ledger is protected with cryptography, is immutable and auditable and provides an uncensored truth.”

-A definition of “smart contracts” as an “event driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger that can take custody over and instruct transfer of assets on that ledger.”

Other states in various stages of legislation on point include: Maine, Illinois, Nevada, Delaware and Vermont. interesting notes: Arizona also passed a seperate law restricting the use of blockchain as "fire arm tracking technology", likely a pro gun rights lobbying effort. Delaware will likely be codifying by statute the right to issue stock on blockchains. Courts have begun accepting blockchain entries as business records under the rules of evidence.

This whole notion of smart contracts being exempt from judicial review is crazy. I mean if I sign a regular contract to go sky diving and "waive all rights to sue in the instance of negligence" and they forget to pack my shute and die, the contract is express and speaks for itself but guess what, it's unenforceable, no one can contracts away negligence (no matter what the contract/smart contract says). Murder for hire; no competes in California, these things do not go from illegal/unenforceable contractually to legal because they are outside the jurisdiction of the courts.

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#168

Post by jacquesm » Fri, Jul 21, 2017, 10:01 AM UTC

will_brown wrote: post #167

jacquesm wrote: post #101

Earlier quoted context omitted.

You really just simply do not get it. Just like the law can not define Pi to be 3 the law should not be able to influence the outcome of a smart contract if smart contracts work at all because that is how it is intended to work, smart contracts are supposed to be the entirety of the agreement, no outside interpretation should make a difference nor could it make a difference. This is where the Ethereum crowd has - in…

Whether or not you (or anyone else) think the law should influence the outcome of smart contracts...it certainly does. So far a few states (US) have passed laws regarding "blockchains", "smart contracts" and the like. For example, seeking to avoid any legal uncertainty surrounding blockchain transactions and smart contracts relating to certain digital assets, Arizona passed HB 2417, the following on point: - A very s…

It's not about whether or not it should, I'd be happier living in a world where they can be, but since the whole goal is that it can't and there are people working really hard on trying to achieve that goal it would be more realistic to adjust to the eventuality that it will at some point be done.

The biggest stick that governments have is that they could make it illegal for their constituents to engage in smart contracts with some kind of very large penalty.

But other than that I don't really see what could be done about it once they are a fact.

Just like laws of nature do not care about what a judge thinks math does not either. Trying to overrule smart contracts from the bench is if they actually work roughly akin to outlawing math.

And yes, murder for hire is a serious potential problem, but murders for hire already happen in the world as we have it today so the existence of smart contracts is not going to be an enabler in this respect, hiring someone to kill for you is illegal, whether you use a smart contract or a verbal agreement is not really relevant to that, it's the act that is illegal, not the means of codifying the arrangement.

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#169

Post by empath75 » Fri, Jul 21, 2017, 10:04 AM UTC

spuz wrote: post #144

adrianN wrote: post #74

Earlier quoted context omitted.

Well, what's the point of having a smart contract if it's not the final authority? We already have contracts that require highly paid humans to judge whether they've been broken or not. To me at least Etherium was dead the moment they chose to fork because they felt a contract was "hacked".

> Well, what's the point of having a smart contract if it's not the final authority? I think this is a common misunderstanding of Ethereum and blockchains in general. The current Ethereum blockchain is authoritative only as long as a majority of it users consider it to be authoritative. The same applies to Bitcoin. No single person decided to fork Ethereum after the DAO was hacked, it was decided by a quorum of Ether…

You are making the argument that if, say, you've made a bunch of ethereum through means that the majority of miners don't like, they can just fork the currency and take your coins from you, and that's totally fine.

Re: A hacker stole $31M of Ether – how it happened, and what it means for Ethereum

#170

Post by jacquesm » Fri, Jul 21, 2017, 10:06 AM UTC

canoebuilder wrote: post #166

jacquesm wrote: post #163

Earlier quoted context omitted.

> Is that a way around it? No, that's an alternative, and smart contracts are attempting to become a way around that .

Well it's not really an alternative, it's just reality at the moment, so long as smart contracts are more theory than practical. What if trust is a feature not a bug? Why is it something we need to engineer around?

> What if trust is a feature not a bug?

But not everybody can be trusted.

> Why is it something we need to engineer around?

We don't, but that won't stop it from happening and it is usually better to enter those situations informed rather than arguing from what world it would be nicer to live in.

When the automobile entered mass production the world changed. You could have of course argued that this made the world a worse place to live in (which it did in many respects) but the reality was that once invented people apparently wanted automobiles and that demand ended up being satisfied. If enough people want smart contracts they will be a fact of life, knowing their limitations, how to deal with them and whether or not you should enter into one is important knowledge. No amount of sticking your head in the sand will reverse the course of history, smart contracts will happen, or they won't and if they do it will pay off to know about them. Right now they're on the edge of being useful, in a few more years we will know for sure whether or not they were a fad or a harbinger of a novelty whose impact will be hard to predict.

I don't like them but I do believe they will happen and I also believe that they will alter our societies in material ways.