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Stop Calling It Theft: Thoughts on TheDAO

Like many people involved in Ethereum, my attention has been thoroughly captured by the recent events surrounding TheDAO. As an Ethereum miner, I have a little stake in this game. The reentrancy vulnerability found in TheDAO smart contract has resulted in a single actor draining the ether contributed to TheDAO smart contract (3.6 million of 11.5 million, so far, as the process in ongoing).

Since the mechanism being used here is a child DAO, the funds won't be available for transfer out of that account for another 27 days. In the meantime, a soft fork has been proposed that would block that transfer, allowing for the funds to be recovered and potentially redistributed to DAO token holders. After considering the arguments on both sides of this issue, and thinking about the role of Ethereum in a future economy full of digital assets, I've come to the conclusion that I am strongly opposed to this idea.

If Ethereum is to become what it purports to be, even considering this fork is a toxic solution to the problem. While I could go into discussions about the rule of law, or decentralized political systems, I think the best way to explain my position is an idea that most gamers will find familiar: If the game lets you do it, then it's not cheating.

The Ethereum foundation should take steps to prevent this kind of problem in the future. Those steps could even include a hard fork, or changes in the Ethereum roadmap. Perhaps making it so that a single contract can't hold such a large percentage of ether would be a good idea. I'm sure that in the coming months, people will have learned many lessons from this experience...lessons that can be applied to make the network stronger. But it wasn't the Ethereum network that was attacked here.

Although it will be very painful outcome for many people, the Ethereum network worked exactly as intended. TheDAO contract writers tried to play the game and they lost. It turns out that TheDAO was actually just a $160m security audit bounty. Instead of calling the new owner of TheDAO's ether a thief, we should be congratulating them on a game well played. Changing the rules in the middle of the game sets the very dangerous precedent of saying that the behavior of the network is not determined by code, nor even by laws, but simply by the majority consensus of it's participants. Any action taken on the Ethereum network going forward may be retroactively overridden by what is essentially mob rule.

Ethereum has the potential to move us into a new age of human organization. From tyranny and monarchy, to the rule of law, and then to the rule of code. Instead of killing all the lawyers, we can just make their work partially obsolete. But if we make this choice now, of retroactive rule by popular opinion, hope of reaching that future with Ethereum will be critically undermined. While we may be able to recover the ether, the trust we lose will come at a far greater cost.


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