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The collapse of the IRON stable coin

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Re: The collapse of the IRON stable coin

#51

Post by thebean11 »

toomuchtodo wrote: post #45
thebean11 wrote: post #44

Earlier quoted context omitted.

Sure, I don't disagree with that. For example, defrauding someone with a smart contract obviously doesn't offer the scammer legal protections.

Who defines fraud if the contract is contested?

Depends on which jurisdiction alleged fraud happens in. If the parties are anonymous or in "difficult" jurisdictions, it will be pretty difficult.

Fraudulent or not, though, you have a pretty heavy layer of protection as the money has already been transferred, and that money is not easy (close to impossible) to freeze.

Any reversal that happens will be necessarily by a threat outside the blockchain, as the governing body can't actually reverse the transaction. It's a second transaction.

Re: The collapse of the IRON stable coin

#52

Post by toomuchtodo »

jMyles wrote: post #46
toomuchtodo wrote: post #31

Earlier quoted context omitted.

I'm saying the legal system takes authority. A smart contract doesn't avoid or override that authority. https://digitalchamber.org/wp-content/uploads/2018/02/Smart-... > Is A Smart Contract Always A Legal Contract? > No. Because a smart contract is computer code, a smart contract may represent all, part, or none of a valid legal contract under U.S. law. Smart contracts function – in whole or in part – to give effect…

> I'm saying the legal system takes authority. A smart contract doesn't avoid or override that authority. On a blockchain, this is absolutely false. The nodes interpret smart contracts. The "legal system" needs to be applied by some kind of oracle or by force to a node operator. Smart contracts are authoritative in their native environment.

> The "legal system" needs to be applied by some kind of oracle or by force to a node operator.

Yes, this is usually how it's done. Business logic is not a legal authority.

Re: The collapse of the IRON stable coin

#53

Post by [deleted] »

thebean11 wrote: post #51
toomuchtodo wrote: post #45

Earlier quoted context omitted.

Who defines fraud if the contract is contested?

Depends on which jurisdiction alleged fraud happens in. If the parties are anonymous or in "difficult" jurisdictions, it will be pretty difficult. Fraudulent or not, though, you have a pretty heavy layer of protection as the money has already been transferred, and that money is not easy (close to impossible) to freeze. Any reversal that happens will be necessarily by a threat outside the blockchain, as the governing…

[deleted]

Re: The collapse of the IRON stable coin

#54

Post by JohnWhigham »

gerikson wrote: post #2

> The developers seem to have been earnest in their attempt to create a new kind of stablecoin , one that was only partially collateralized by a “real” stablecoin. This space is a giant house of cards.

Seriously. I posit that many of the programmers in the field have no financial background whatsoever, on top of whatever shaky software background they may also have (especially if they went to a bootcamp). Just hilarious to watch.

Re: The collapse of the IRON stable coin

#55

Post by bombcar »

> Non-collateralized stablecoins require continual growth to be successful. In the event of a price crash, there is no collateral to liquidate the coin back into, and the holder’s money would be lost, as seen with many past projects trying to utilize such design [sic].

Isn’t that just a Ponzi scheme?

Re: The collapse of the IRON stable coin

#56

Post by cool_dude85 »

thebean11 wrote: post #40
criddell wrote: post #34

Earlier quoted context omitted.

They said "typically", so they aren't saying it's true in all cases, but generally when a person is trying to evade some legal authority, it's probably not for reasons good for society.

They are trading one legal authority for another, and this is agreed upon up front. Both parties agree that the code is the legal authority before entering into a contract, which is much different from evading authority after the fact. > but generally when a person is trying to evade some legal authority, it's probably not for reasons good for society Reminds me of the "nothing to hide" argument, that only someone tr…

>They are trading one legal authority for another, and this is agreed upon up front. Both parties agree that the code is the legal authority before entering into a contract, which is much different from evading authority after the fact.

The parties might "agree", but who cares? If they are in the US, for example, and the two parties have a smart contract that breaks US contract law, one of the parties can file a lawsuit and attempt to get their money back. You can't go to the judge and say "sorry, the code is the legal authority here".

Re: The collapse of the IRON stable coin

#57

Post by runbathtime »

If a code error that was made that was supposedly 'dumb' wasn't caught that tells me the people behind this acted recklessly. This code error being described wasn't just dumb, it was catastrophic- locking up all the collateral. Is this collateral locked up forever, what would make Titan trade above 0? The code wasn't even audited, suggesting no care by the devs before release. Doing money transmission without a license is criminal offense- jail and fines in this case are on the table- all it takes is actual enforcement from regulators.

Re: The collapse of the IRON stable coin

#58

Post by tluyben2 »

ceejayoz wrote: post #36
thebean11 wrote: post #33

Earlier quoted context omitted.

Not quite sure what you're saying, that you expect the DOJ to somehow overturn the judgements of smart contracts, with possibly anonymous participants or participants outside of the DOJ's jurisdiction?

I think the point is more that if you owe $200M to someone, a court is unlikely to accept "it's irreversibly stuck in a smart contract" as an out.

I am against smart contracts because we do not know how to write software in that way. I like how they sparked a formal verification Renaissance of sorts but that did not help much either unfortunately (if the premise is wrong, no amount of proof will save you anyway).

However, if you let all parties review the smart contract (the source is on the chain, you can check it) and agree with it's workings and sign a 'human' contract saying you do agree and then it goes wrong, I think it should be an out. We do not have proper ways to sue for misbehaving software (it happens all the time but MSFT is climbing higher and higher): this is easier to verify but we are adults here: if you agree to put money in smart contracts, you should have verified the code. And if you think the code is flawed, do not put money: otherwise do not complain afterwards. It is not that hard.

Re: The collapse of the IRON stable coin

#59

Post by hungryforcodes »

sashimi-houdini wrote: post #39
hungryforcodes wrote: post #26

Earlier quoted context omitted.

Why bother -- it's so broken. We can just again, it makes way more sense.

But cryptocurrency's answer is usually not "how can we do better" but "how can we repeat the same mistakes in a shorter time span?"

Cryptocurrency is incrediably diverse at this point, so you would have to be more specific.

Re: The collapse of the IRON stable coin

#60

Post by chriswarbo »

sashimi-houdini wrote: post #8

I wrote Skepticoin as a serious parody of Bitcoin. Articles like these about the "state of the art" of cryptocurrency make me wonder: would a parody of a more "modern" cryptocurrency even be recognizable as such?

PonziCoin comes to mind https://ponzicoin.co

Here's a snapshot before it shut down: https://web.archive.org/web/20140312233243/http://ponzicoin....

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