In the funnily strange world of smart contracts, he's not a thief.  In fact, in that world, there cannot exist thieves.  If you don't understand that, you've not understood smart contracts.  With a smart contract, there is no possible illegal act any more: if you can do it, it is legal, and if it is illegal, you can't do it.

I think it is much deeper than that.  No complex system of software can be guaranteed to be without a deviation, in border cases, from intend.  People call that "bugs" and "exploits" (depending on whether it happens like this, or is looked for).
As such, no complex smart contract will work as intended, and you can't correct for it, because it is the law, the whole law, and nothing else is the law.  Correcting bugs in a smart contract is essentially breaking the law, which is unheard of in human law.

So in essence, you can forget about the concept of complex smart contracts.  That is what this story told us.

Then you are one of the (visibly many) ethereum supporters who don't know what is the mind boggling idea of a smart contract, which is somehow strange, as the whole value proposition of ethereum is to make smart contracts.

In a smart contract, "code is law, all the law, and nothing else is the law".  I wrote already a few posts on that, but essentially, in a smart contract, you replace totally all human law (state law, international law, morality and all that) by a piece of code, which is the ultimate verdict on "right" and "wrong".  If the code allows it, it is right/legal/fair and if the code doesn't allow that, it is wrong/illegal/unfair.

This is the whole idea: you turn "right" and "wrong" into something like a law of nature: by running the code, ALL you can do is right, and it is IMPOSSIBLE to do wrong.   As such, you do not need judges, police and prisons, because only RIGHT things can happen.  Yes, but the "right" and "wrong" in this world are very, very, very strange.  But this is needed to do a smart contract, that a computer can decide, and that no police or judge is needed.

The Ethereum foundation has scammed people by letting them think that a smart contract is akin to a paper contract, but "in software".  That is not true.  A smart contract is a piece of code that replaces all of human law and morality by a mechanical execution.  A paper contract exists inside a whole bed of human legal constructs, from state and international law, down to human morality and sense of fairness.   A paper contract is much more than what's on paper: it includes implicitly a whole environment of legal and moral rules.

The Ethereum foundation sold smart contracts as if it was similar to a paper contract and people believed it.  If they would have realized how "unlegal", "immoral" smart contracts are BY DEFINITION, then they might not have poured 150 million in something like the DAO.

Because by definition, if the code tells you that you can do it, by definition, you are legal, right, and you are not harming any one.  That is the strangeness of a smart contract.  If the code gives you the coins, then you did so legally.

All the standard arguments of "poorly written software", "exploits", "bugs" and so on don't even exist as a concept in a smart contract.

In fact, the big scam of the DAO was not that there were "bugs" in the code.  The big scam was that the DAO guys "explained" the supposed, intended workings of their code.  In fact, given that the DAO law was the code, they should have only put online the byte code of the DAO.  Not even the source code.   Only the byte code.  THAT was the law and nothing else.

This is similar to not writing a "summary of intend" when you sign a paper contract, but only the contract itself.  What tricked people was that the DAO website told other things than the code.  

In the normal software world, what counts is the intend, and if code does something else, people call that "bugs" and the code is adapted to the intend in an update.  However, in a smart contract, it is the other way around.  You should deduce intend from the (byte) code, and not the other way around.

People simply seem not to understand the weirdness of a smart contract ; in the first place, ethereum supporters, because they believe in the simplism that a smart contract is like a paper contract, but written in code.  It isn't.  At all.  A smart contract is a terribly weird idea and very inhuman.  I support smart contracts but that is because I am a fan of the Singularity, where humanity will be replaced by machines.  This is actually the only kind of vision in which smart contracts make sense.  The Ethereum foundation didn't tell you that, did it.


I perfectly understand that, but that is even another issue.  That is like bitcoin not forking over the more than 50 large bitcoin thefts (real thefts of wallets this time).  But it is still another issue.  



By saying that, you confirm that you don't understand the essence of a smart contract.  The "thief" wasn't a thief under the code=law system.  People only signed up to a contract they didn't understand (including their authors): it wasn't a venture capitalist firm, but it was a hacker's bait.   Which is normal.  EVERY COMPLEX SMART CONTRACT is a hacker's bait because NONE works as "intended".  That's in the nature of smart contracts, and what the Ethereum foundation forgot to tell you.

Only small smart contracts can reasonably well be considered more or less doing as intended.  The claim that complex smart contracts do as intended is the same claim as saying that one can write a complex piece of software not containing bugs or exploits ever.
So all complex smart contracts, being the law, will be legal hacker's baits.

You can only do that with people selling ETH who don't understand how block chains work...
You might have done that right after the split when nobody knew the other fork would live, but now I think finding idiots who send you ETH when you buy ETC is going to start to be difficult...

Maybe some silly exchanges will do so ?  But even there, newly mined coins will get mixed in, and stop the validity of signatures on both chains (which funny people call an attack).

There is in fact no big surprise.  The cast vote on the fork of the ETH holders was:

http://carbonvote.com/

and that ratio is about what one finds in the market share of the post fork ETH and ETC.

Mwahahahaha !
It seems that certain crypto exchanges don't understand how blockchains work !

Indeed, if we look at the history of bitcoin:

https://bitcointalk.org/index.php?topic=576337.msg6289796#msg6289796

we have an idea of how many times ETH will fork again :-)

Well, there should be a reasonable market cap to keep sufficient miners interested, of course.  But that's all.   There are many many more altcoins that have lower market cap, and hence lower mining power behind it, that are also viable, so even if the ETC market cap falls 10-fold, there's no problem.  It would still be a market cap of $ 10 million, which is more than enough to support a whole set of tiny contracts (which is the sole reason of existence now of ETH and ETC because nobody is going to build monsters like the DAO any more).

Actually, if you are only looking at one single chain, and don't even consider the other one, of course nothing of all this should be your worry.  It is only if you want to deal on both chains that you should be careful, and then, the most important danger is if you are dealing on the lower value chain (here ETC) that, by accident, you also don't emit an unwanted transaction on the more expensive chain (here ETH).

If you are on a mining pool, you should of course VERIFY that the coins they give you are indeed freshly mined ones.  But in as much as they are, you can use them to distinguish transactions.  People might even be interested in buying some from you at a premium price just to get some "distinguishing coins", although that would have been mainly just after the fork.

You can see it this way: suppose that I personally fork the Bitcoin block chain and I continue my private fork in the basement.  With bitcoin that's infeasible because of the way difficulty adapts slowly, so I'd be in for 5 years of mining the next block in my basement, but let us assume that I have my forked bitcoin chain in the basement for the sake of argument.    That wouldn't, of course, affect anybody, even though all "replay attacks" are valid, simply because all other bitcoin holders don't give a shit of what happens on MY bitcoin fork.  Probably my private bitcoins would have a market price of, I don't know, 100 000 dinocoins for a pizza or so.  However, if my neighbours and I do a dinocoin transaction, we have to be careful not to also do a genuine bitcoin transaction on the main chain, because otherwise, the pizza is going to be hugely expensive.  However, any other bitcoin holder will only do transactions on the main chain, and actually, these transactions will also be copied on my chain, but nobody cares.

No, absolutely not.  From the moment that you do a transaction that contains even just some dust of newly mined coins on one chain, that transaction is not valid on the other chain and you are from that point on, with that address, only on one chain.

With ETC/ETH, you can also use a contract (there's a blog post by Vitalik explaining this).

But in general, on any block chain, things go like this:

Pre-chain: you have UTXO ("addresses") of which you possess the secret key that can sign transactions.

If you sign a transaction using ONLY these UTXO with that secret key, you are making a new transaction to new UTXO (the "recipient address"). 

On both chains, your signature will be valid (some people call this automatic feat a "replay attack", I wonder why), and your transaction will be included if you do not pay attention.  If that is the case, then on both chains, the former UTXO is not unspend any more, and the new address is now an UTXO.  Warning: any signature on any chain of THIS POST-fork transaction is ALSO VALID on both chains and will ALSO be included on both chains ! 

So what can you do (in general, on any forked chain, not just ETH/ETC):

NEWLY MINED coins that appear in blocks after the split are of course only valid UTXO on one single chain: they are not considered valid on the other chain, because these are coinbase transactions in blocks that do not appear on the other chain.  *if you can get hold of some of these, even a minor amount* and you now sign a transaction with a COMBINED INPUT containing some of this mined coin dust and your former coins, then THIS TRANSACTION and its signature will of course NOT be valid on the other chain.

So this transaction will NOT turn the former UTXO into a spend output on the other chain, because no valid transaction uses it.

And from that moment on, the resulting new UTXO on the first chain will also only appear and be valid on one chain.  From that point on, whatever you do with those UTXO, you will never have to worry again about them initiating a transaction on the other chain because these UTXO don't exist on the other chain.

So in as much as coins will get more and more mixed with newly mined coins on each branch, this phenomenon of valid transactions on both chains will disappear.

Even if he does, that represents about a quarter of a day ETC trading volume.
There are many, many more automatic ETC holders that are dumping their ETC on the exchanges.

The hacker dumping wouldn't be the end of it.

Rationally, people should hedge and put 50 - 50 of value in both, and both should evolve towards equal price simply because their value proposition is essentially equal (same monetary proposition, same utility, same history), but then the market doesn't always acts to these simple rational views because there are more complex phenomena going on because these are ultimately, pure belief systems.

There's no such thing as a "replay attack".  It is the normal working of a forked chain, that valid signed transactions on both chains, are included on both chains.

"theft" is a legal concept, and hence, whether an action is theft, depends obviously on the law system under which it is considered.

But in case you don't know, it is a legal property of free open source code that copying it is NOT theft.

You mean that if Amazon puts on its website "Apple i-phone 6 to to sale for $1000", and you pay them, they are not contractually liable for sending you an i-phone you paid for because they only put that on their web site, like you wrote something about the Pope ?  Only a paper contract engages any legally binding stuff ?

But then in what way could the hacker possibly be a thief, as these were just electronic things with no paper contract or engagement and he was just playing on the net ?

You are really logically challenged, aren't you ?

Visibly, you didn't understand the concept of smart contract and "code is law", and now you don't understand the concept of "free open source code".

You seem to have missed the important point, that calling someone a thief because an act he committed is theft, is depending on the law system under which the action is taking place.

As such, under the "law of the code" the hacker was doing legal things.  The same action, most probably seen under human state (which state?) / human morality/sense of fairness law, is most probably seen as "theft".

Consider the following situation, to illustrate that:
in country A, there's a law that says that if you are laid off from your job for other reasons than misconduct (say, economic reasons) you are entitled to take the personal tools that your employer gave you (computer, smartphone....), with you when you leave.
in country B, there's no such law.

Now suppose that Joe gets fired from company C because C made a bad deal and has to face serious losses (a bad deal with which Joe has nothing to do, but the CEO of the company can't keep all personnel and has decided to lay off Joe).

Joe puts his company's telephone and laptop in a cardbox which he takes home.  Is Joe a thief ?

In country A, he isn't and acted according to the law.
In country B, he's an outright thief and stole company property.

In the DAO, it was said that the code is the law, and according to the code, the hacker could take the funds he took, like Joe took his laptop.  The terms of the DAO were written clearly to anybody: it was the code (and NOT, explicitly NOT, the explanations given on the DAO site).

But almost with certainty in any jurisdiction, where the DAO website explanations would have been the paper contract, what the hacker did was theft, under state and even moral law.

Now, is Vitalik a thief depends on under which law system we look at it, but things don't look good.  The reasons are:
- everywhere, the DAO guys and Vitalik engaged in writing (on their website) that "the code was the law".  If afterwards, they did something so that the code isn't the law any more, they are breaking their own contract.
- you can argue that under state law, the hacker was a thief.  But then, under state law, you are not supposed to go and "steal back".  ONLY A JUDGE can decide whether a thief was a thief, and whether someone needs to take some action to break his own contract terms to take back what belonged to someone else.  YOU ARE NOT SUPPOSED TO APPLY HUMAN JUSTICE YOURSELF.  You must go to court.
- finally, I think that Vitalik is probably a stake holder in the DAO.  As such, his actions (taking back the funds of the hacker) are FOR PERSONAL GAIN.

These three things make that Vitalik is not in his right shoes according to human law either, and indeed, he stole back the hacker funds by breaking his own engagement/contract ("that the code is the law, that code is unstoppable, that the past is immutable...") for his own gain.

In as much as "taking back the funds" would have been the normal thing to do under human law, it would also have to have been ordered by a judge.  Otherwise, it is theft.

Which shows you the importance of a brand name and its value :-)

All ETH developers are automatically also, whether they want or not, ETC developers, given that it is essentially identical open source code.

I think you're wrong, that this was "planned".  This is like so many conspiracy theories, and so many religions, that think that because something happens, there must have been a Planner or a Maker behind it.  What we have actually witnessed, was "emergent intelligence from a distributed interacting system".   We are so terribly indoctrinated by thinking that if something (good or bad) happens, it must have been hierarchically organized or thought off, and hence "at the top" there must be a genius or an evil brain.   All of our history courses are full of Kings, Emperors, Presidents and Leaders of revolutions, having determined and thought off the great things of society.  For evident reasons authorities want us to think so (and most of the time, they think honestly themselves that they are the brains).  But, exactly like a free market assigns resources in the best possible way without anyone planning it, a distributed system of interacting agents has emergent intelligence without anyone planning it.    We thought that the only thing such a "community" could do, was to "vote".  We only know of one way for a community to express itself, namely to "democratically vote" and then have it the majority way.  We should know better: the market doesn't vote with a majority.

To the evident, but impossible riddle that the ETH/DAO guys lead themselves, namely that they wanted to have smart contracts (code is law) LOOK LIKE human contracts (legal, moral, contract, judge,...) - which is outright impossible, they didn't know the solution.

The DAO illustrated that a perfectly legal act according to code law, is considered, without the slightest doubt on the human legal and moral level, theft, and it was not on the test net (well, one excuse was that they had actually put $150 milion in a beta test...).   The impossible choice of the ETH/DAO community was this:

- do we stick to the fundamental tenet of smart contracts (code = law) and hence demonstrate that smart contracts are totally different from human contracts (sounding the end of the illusion that smart contracts are similar to human contracts, like bitcoin is similar to dollars as a monetary asset) ?

- do we apply human law in extreme cases like this, and break the foundations of smart contracts, unstoppable, immutable and all those nice words that are still present in a comical way on the ethereum foundation website ?  (and do we also break the human contract that we had with our customers doing explicitly what we told them would never happen) ?

This impossible choice was given to "the community" for a VOTE, because this is how "leaders" think that the community should speak (they want to preserve unity in the community for sake of power of their leadership).  

The interaction of all independent agents came with the BEST POSSIBLE SOLUTION even though nobody in his right mind planned this:  a genuine fork.  Indeed, this was the technical possibility that resolved the riddle in the best way, by having it both ways.   In the same way as a free market does: the market doesn't go for a "majority vote" on whether Apple or Samsung are to make smartphones, after which the minority accepts the majority vote and we all buy only Apple or only Samsung phones.  The market has diversified offer, and people take what they want.

This is something that no "leader" planned.   This is something that was anticipated as a potential catastrophe that hopefully never would occur.  It was the best thing that could happen, and it emerged AGAINST ALL leadership.

Emergent distributed intelligence.

I don't know how different this is on ethereum.  But you can't, as far as I know, "create a new address ON A CHAIN".  You just sign a transaction to a new address, and if that transaction is valid on a chain, it will get captured and included on the chain.

Now, if you do a transaction of pre-forked ETH that is valid on both chains, to a "new address", then you will get as well your new ETH as your ETC on that new address, and your old address is not an unspend output any more.  You need to do something that is NOT a valid transaction on the other chain.  With ETH, you can use a contract. But without a contract, you can also obtain that if you possess some newly mined coin on one or the other chain, even in an infinitely small amount.

But note that if you have ETH in an address on the ETH chain, and ETC in the SAME address on the ETC chain, even after the fork, a signature of the ETH on the first chain will, I believe, also be a valid signature on the ETC chain, even if these are "post fork" transactions.