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Critical Update on DAO Vulnerability

blog.ethereum.org

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Re: Critical Update on DAO Vulnerability

#391

Post by forgotpwtomain »

vessenes wrote: post #366
joosters wrote: post #26

Just remember, when the developers inevitably appear with suggestions about how to stop the hack, roll back the blockchain, or come up with other schemes to block the hackers, they are showing everyone that all the talk of blockchains being decentralised, or being beyond the control of governments or other powers... is a complete lie. If this hack can be stopped, then it demonstrates that the currency can be manipula…

This is FUD, broadly speaking. The devs have put out a patch for miners which allows them to decide whether or not they wish to fork over these transactions. Centralization is not required for this decision, instead, distributed consensus. The counterpoint to your statements is simply that consumers need safety with their money. It is no badge of honor to let unsophisticated technical people lose money for some extre…

> This is FUD, broadly speaking. The devs have put out a patch for miners which allows them to decide whether or not they wish to fork over these transactions. Centralization is not required for this decision, instead, distributed consensus.

With all respect Peter, this is not FUD and OP is raising a valid concern. Yes, the miners vote on the patch - but given the infant state of the ecosystem and the large loss incurred, even further controversy or delay in finding a resolution may cause them permanent economic harm; so it would appear that there is little leeway in the choice involved.

> The counterpoint to your statements is simply that consumers need safety with their money. It is no badge of honor to let unsophisticated technical people lose money for some extreme libertarian ideals.

Yes, that's certainly the argument, particularly that if there is majority agreement than the protocol change is justified. But this doesn't at all invalidate OP's concern that fundamentally algorithmic contract's aren't binding if such an alteration can be adopted. The case could be made that in a more mature ecosystem such case specific alterations are more potentially damaging than useful and that this is a transitional phase, yet I think the burden of proof is on the one responding.

Re: Critical Update on DAO Vulnerability

#392

Post by grandalf »

nsajko wrote: post #317
kauffj wrote: post #242

Earlier quoted context omitted.

100% agreed and anyone who expects these types of smart contracts to replace typical contracts is overlooking this. The real void smart contracts fill is the type of contracts that cannot be trusted to be enforced by the current court systems. For example, consider prediction markets. Just about any economist or rational person will tell you these are a huge boon to the world, but the CFTC shut down InTrade just a fe…

Why are prediction markets a huge boon for the world? Isn't that just a fancy term for betting anyway?

The entire finance industry does a fancy form of betting. Risk and reward are packaged up and bought and sold by people according to their preferred allotment, and once the outcome is known the spoils (or losses) are correspondingly shared.

Prediction markets can also be called "information markets" because they expand the class of things we can understand the risk characteristics of beyond the traditional instruments.

Lloyds of London began by issuing insurance on shipping vessels so that ship owners shared the risk of a wreck across all their fleets, reducing the devastation of losing a ship for each individual owner. Prediction markets let us do this for a host of other outcomes.

A prediction market is nothing more than a betting market, the innovation (attributable to Robin Hanson, I believe) is the idea of the binary future, which makes the probabilistic outcome work nicely with a traditional futures contract structure, and allows for a lot of nice intuitions based on price movement.

Re: Critical Update on DAO Vulnerability

#393

Post by yonilevy »

Just an idea - why not contact the attacker (via a public message), and offer him or her a deal - they get to keep say 1% of the stolen amount, given that they upload a smart contract that guarantees the money is sent from the stolen account to a "trusted" address (from where it will go to DAO 2.0). That way everyone wins, hacker gets paid a fair amount for finding the security hole, no messy forks.

Re: Critical Update on DAO Vulnerability

#394

Post by woah »

sphen wrote: post #134
jpereira wrote: post #84

Earlier quoted context omitted.

Doesn't this show an issue with the Distributed Systems on Ethereum, with every script that has to be audited individually, and not with the platform itself? I'm with you on the fact that proper auditing is an absolute must, as this DAO fiasco shows, but I don't think this event exposes any flaws in the Ethereum platform itself.

I recently attended an Ethereum workshop that was scheduled for two hours. Three hours later and most of the audience were no more wise about Ethereum than when they first entered the room. It certainly didn't help that workshop was led by web developer (a passionate Ethereum supporter) who had no interest in the concensus algorithm or other dense technical issues, but what was quickly apparent to me was that Ethereu…

The consensus algorithm is actually not that important for understanding day to day stuff. Some "private blockchains" actually just use round-robin.

Re: Critical Update on DAO Vulnerability

#395

Post by jobigoud »

vessenes wrote: post #268

I wrote this attack up last week -- a solidity dev initially noticed this bug, but seemed to think it wasn't a big deal. http://vessenes.com/more-ethereum-attacks-race-to-empty-is-t... The comments here are generally spot on; it's a combination of problems -- upgradability is designed to be hard because other people's money shouldn't be easy to steal, programmers are not used to making whole programs reentrant, exist…

> That said, there just aren't enough people looking at these contracts right now

I hope this doesn't kill the project. Having programs that give you money when you find bugs in them could be a very powerful incentive to develop new tools to write correct code.

Re: Critical Update on DAO Vulnerability

#396

Post by m-i-l »

Tinyyy wrote: post #188

> (The soft fork) will later be followed up by a hard fork which will give token holders the ability to recover their ether. Does this mean that transactions are going to be rolled back? If so, are they planning to do this everytime a vulnerability is exploited? Is The DAO too big to fail?

If the DAO is "too big to fail", are Vitalik and the core dev team the equivalent of a "lender of last resort"[0]?

[0] https://en.wikipedia.org/wiki/Lender_of_last_resort

Re: Critical Update on DAO Vulnerability

#397

Post by curried_haskell »

infodroid wrote: post #266
imglorp wrote: post #214

This is what concerns me about contract programming. With human contract law, if there's a minor typo or loophole, participants can generally see the spirit and intent, and at worst go to a judge who will usually enforce the intent. But with software contracts, only the characters matter and there's no intent anywhere: either you get paid or you don't. ETH is advising, "Contract authors should ... be very careful abo…

Unlike traditional contracts, the idea was that smart contracts were going to eliminate the need for enforcement or dispute resolution. So that law is enshrined in code. But this incident has set a precedent, at least within Ethereum, that the project leadership will intervene to enforce the spirit of a smart contract. So what now are the benefits of Ethereum smart contracts over the traditional legal system? The way…

> the idea was that smart contracts were going to eliminate the need for enforcement or dispute resolution

Well that's the fantasy of the century. Has no one learned this lesson with Bitcoin? An electronic currency doesn't magically wave away the fact it's being built and used by humans.

Re: Critical Update on DAO Vulnerability

#398

Post by ArneBab »

cmdrfred wrote: post #371
quirkot wrote: post #333

Earlier quoted context omitted.

I actually found a typo of a 100x magnitude in a Washington, D.C. law about ten years ago. Submitted it, and it was administratively adjusted. No need to even take it back for another vote. I believe is happens with much greater frequency than anyone outside the business of maintaining legal documents imagines. [even had a typo in the first publish of this comment!]

> administratively adjusted That sounds like a terrible amount of power to give someone without a vote.

for obvious fixes, that’s not actual power: They could not do that if the correct answer weren’t obvious.

If I offered a new car for 10€ — obviously it should have been 10k€, so others cannot expect me to fulfil that (ask your local police).

If I had offered it for 8.5k€ and suddenly claim it should have been 10k€, it’s far from obvious that this was a mere error, so I’d likely have to stand for it.

If I offered a used car for 10€, the case becomes murky.

Re: Critical Update on DAO Vulnerability

#399

Post by JulianMorrison »

grandalf wrote: post #387
JulianMorrison wrote: post #359

Earlier quoted context omitted.

Core problem: If contracts can be upgraded while in use, everything reduces to a game of Nomic.

That depends on whether you think of a contract as an interface or as an implementation. A contract should present an interface that includes a declaration of its behavior. The declared behavior should be well defined, and if a bug in the implementation is discovered, the contract should be updatable to fix the bug. There could even be futures expressing the probability that a contract will be found to have a bug. Th…

What you're trying to solve is something very similar to the recursive self improvement problem that MIRI[1] and friends are trying to solve in the sphere of "friendly" artificial intelligence. If something rewrites its own source code, how can you assert invariants that can be relied upon? So going and looking over there at what they've come up with may be fruitful.

[1] https://intelligence.org/

Re: Critical Update on DAO Vulnerability

#400

Post by woah »

developer2 wrote: post #383
cplease wrote: post #339

Oh, nobody saw that coming. Completely unforeseeable. What other mature, ready-for-primetime autonomous altcoin networks can I dump my savings into for no apparent reason? Edit: "DAO token holders and ethereum users should sit tight and remain calm. Exchanges should feel safe in resuming trading ETH." No they shouldn't. They should running screaming for the exit doors. Less than two months after the launch of this my…

WTF. There is the equivalent of millions of dollars in this blockchain? How?! Who willingly puts real cash up front for this kind of thing? Just... what?!

Public blockchains have been around since 2008 (Bitcoin). If you don't like it, I'm not going to try to change your mind. But this kind of shocked response from people who have seemingly been living under a rock is really almost a kind of spam in these threads.
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