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Can someone tell me where my decentralized/blockchain theory breaks?

news.ycombinator.com

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Re: Can someone tell me where my decentralized/blockchain theory breaks?

#31

Post by kbenson »

majormajor wrote: post #25
cantrip wrote: post #18

Earlier quoted context omitted.

The term "hacker" depends on your viewpoint. Put another way, a user executed a function on a decentralized smart contract platform that transferred $150 million to the possession of the function's caller. If the value of smart contracts is that they will execute as written with no possibility of third party interference then Ethereum is not a smart contract platform. It is a very inefficiently designed public ledger…

> If the value of smart contracts is that they will execute as written with no possibility of third party interference then Ethereum is not a smart contract platform. Why would there be such value in a dumb contract platform like that? Historically, what societies have chosen to adopt such a set of values?

I think the perceived value comes from the assumption that contracts can be written perfectly. Apparently, some people believe that the problems encountered so far are just a matter of weeding out the problems and eventually contracts will be much less likely to have loopholes like this.

I don't really agree with that worldview, but not strongly enough to bet that it won't reach some fairly safe equilibrium at some point. Even then though, a major bug could be lurking for years just waiting to be exploited later.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#32

Post by zodiac »

You don't even need a protocal change (patch) - a supermajority group of validators (miners or stakers) can censor the minority group profitably, with no way to tell in-protocol.

The fact is, all existing blockchain protocols are not coalition resistant Nash equilibria (https://en.m.wikipedia.org/wiki/Coalition-proof_Nash_equilib...) and we rely on the difficulty of coordination for security. Strong centralization can make coordination easier though.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#33

Post by TallGuyShort »

>> Isn't cooperation key to a decentralized system?

Slightly off-topic, but cooperation is key to traditional currencies, too. If a majority of the United States determines that I suck and tries to stick it to me and anybody who does business with me, all of my US Dollars would have substantially less purchasing power.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#34

Post by abakker »

tootie wrote: post #15
alistproducer2 wrote: post #2

You're forgetting that the integrity of the blockchain has value, particularly for miners. The token would crash once such a deception were made known making the miner's reward for mining worthless. That's the cost that you are not factoring into your example.

Game theory. While the mining community understands the value, whoever is committing the theft is probably just interested in short-term gain. A few thieves have not broken the fundamental trust in crypto, but there is definitely a tipping point.

Yeah - as long as the crypto token has liquidity to settle into other currencies, there is a possibility of agreeing to ruin the chain and exchange the tokens while information asymmetry still exists. Essentially, if you don't care about the "store of value" part, a large enough group could do it.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#35

Post by apetresc »

EthanHeilman wrote: post #23
cantrip wrote: post #18

Earlier quoted context omitted.

The term "hacker" depends on your viewpoint. Put another way, a user executed a function on a decentralized smart contract platform that transferred $150 million to the possession of the function's caller. If the value of smart contracts is that they will execute as written with no possibility of third party interference then Ethereum is not a smart contract platform. It is a very inefficiently designed public ledger…

>The term "hacker" depends on your viewpoint. Put another way, a user executed a function on a decentralized smart contract platform that transferred $150 million to the possession of the function's caller. I think if you view the action as criminal or if you view it as just a clever use of the smart contract, the person who did this is a hacker. They understood and controlled the software in a way the designers did…

My memory of the event may be confused with another one, but I believe the guy who did this did it accidentally. He was as confused by the result as everyone else - in fact, he froze the account on his own, so that he wouldn't have access to it.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#36

Post by kbenson »

apetresc wrote: post #35
EthanHeilman wrote: post #23

Earlier quoted context omitted.

>The term "hacker" depends on your viewpoint. Put another way, a user executed a function on a decentralized smart contract platform that transferred $150 million to the possession of the function's caller. I think if you view the action as criminal or if you view it as just a clever use of the smart contract, the person who did this is a hacker. They understood and controlled the software in a way the designers did…

My memory of the event may be confused with another one, but I believe the guy who did this did it accidentally. He was as confused by the result as everyone else - in fact, he froze the account on his own, so that he wouldn't have access to it.

That was one of the events, I think. There was another one. Perhaps that's the one being described here. I seem to recall that one had a bunch of whitehats who figured out the bug and rushed to exploit everyone just to prevent the bad actors, and so they could return the funds later.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#37

Post by valleyer »

TallGuyShort wrote: post #33

>> Isn't cooperation key to a decentralized system? Slightly off-topic, but cooperation is key to traditional currencies, too. If a majority of the United States determines that I suck and tries to stick it to me and anybody who does business with me, all of my US Dollars would have substantially less purchasing power.

I'll be off-topic with you. Your scenario seems a little different, because I could still shop with dollars at the 49% of stores that still like me. Whereas if bitcoin replaced dollars, even those 49% of stores that liked me couldn't take my money, because the 51% can veto the transaction.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#38

Post by fixermark »

sharemywin wrote: post #10
wakamoleguy wrote: post #8

You're correct that cooperation is key and that if you get "enough" people (50% of hashing power in most cases) behind a plan, they can change the rules of the game. This could be used to steal coins. This has actually happened in the past. When massive amounts of Ethereum were stolen from the DAO, the community got together and decided that those coins did not belong to the hacker. With >50% of the network, they for…

Now sell your coins...bitcoin is only worth something if it works. you'd also have to get bunch of people that have invested most of their lives to it.

... unless the end goal is not to generate profit, but to diminish value represented as BTC by undermining fundamental faith in the network, in which case, a value drop is working as intended.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#39

Post by dukeflukem »

thisisit wrote: post #7

Too many things going on here: a. Are you aware of the Ethereum DAO hack? The whole Ethereum vs Ethereum classic. Short story - The largest ethereum contracts was hacked and money stolen. Then a patch was released saying that the hack didn't happen. People who accepted the patch were "ethereum" holders and those who refused are now on "ethereum classic". So, changing the rules in a patch doesn't matter. If there are…

People who accepted the patch were "ethereum" holders and those who refused are now on "ethereum classic".

Except almost all hold both ETC and ETH regardless of the viewpoint and client they run.

Re: Can someone tell me where my decentralized/blockchain theory breaks?

#40

Post by dsr_ »

kbenson wrote: post #36
apetresc wrote: post #35

Earlier quoted context omitted.

My memory of the event may be confused with another one, but I believe the guy who did this did it accidentally. He was as confused by the result as everyone else - in fact, he froze the account on his own, so that he wouldn't have access to it.

That was one of the events, I think. There was another one. Perhaps that's the one being described here. I seem to recall that one had a bunch of whitehats who figured out the bug and rushed to exploit everyone just to prevent the bad actors, and so they could return the funds later.

This all happened less than a year ago and there was a lot of discussion of it, here and elsewhere. We have google and duck-duck-go, not to mention a search bar on most HN pages.

Perhaps we could point to facts rather than vague remembrances?

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