The DAO FAIL

[dinofelis]

I believe its safe to say that the DAO failure caused a few hundred million $ (quite possible to be even over a billion $) in losses. Its not like I'm bragging or anything, but I was expecting this to happen and it was the main reason to start this thread. Projects are coming and going all the time, but when it comes to a project with such funds, then we should all worry about on what may happen in future.

I don't think this is a bad thing in itself.  Most of this market cap is first of all just a speculative bubble because the price is not really the price of "money" (the bitcoin and other coin USAGE as a means of exchange doesn't justify such a market cap) and is also not really the price of "store of value" (most bitcoin holders don't hold bitcoin as "store of value" - that is, to get out about the SAME value years later, but to get out MUCH MORE value without there being an equivalent production of value standing over it - so most of bitcoin's market cap at this moment is still coming from "greater fools" theory rather than "same value").

By this I do not mean that bitcoin's price will crash.  Absolutely not.  It might well be that bitcoin gets used one day are genuine money and that its monetary market cap will even be higher, but for the moment, the market cap is essentially speculation and doesn't come from the normal monetary value it should have as a means of exchange.

So if this market cap lowers a lot due to what happened to the DAO it won't hurt bitcoin as a means of payment (it has largely enough market cap remaining to do all the purchasing of goods and services one is doing with it right now, which isn't a lot).

On the other hand, a wake-up call was necessary.  It is necessary to see what happens when the block chain paradigm fails, such as happened to ethereum, and when a chain forks genuinely.   That such a block chain failure would occur one day now seems obvious (after the fact) and it is good to be aware of it, also for bitcoin.

That a few billion of hot air speculation got burned doing so is not so much of a problem I'd say.  Crypto is testing its limits, its behavioral features, and we need to know more about that before going further.

Also, my personal hope is that one will wake up about this monumental problem in bitcoin, which is traceability and the potential colouring of coins, as ethereum is now also experiencing.

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[spartak_t]

I like how you think, but its not necessary to talk about long term "value". There are also a lot of "day traders" and I was mainly referring to them. On the other hand, my personal opinion (well, it may sound like a conspiracy theory, but its what I think) is that Bitcoin (by saying BTC I am referring to the entire market of cryptocurrencies) is still "working", because some "people" are still allowing it. And if we want things to stay this way, then we'd better not screwing with ICO's/crowdsales/whatever, because some authorities can find their reasons to get more deeply involved and then we are all f*cked.

[Ultrabat]

I like how you think, but its not necessary to talk about long term "value". There are also a lot of "day traders" and I was mainly referring to them. On the other hand, my personal opinion (well, it may sound like a conspiracy theory, but its what I think) is that Bitcoin (by saying BTC I am referring to the entire market of cryptocurrencies) is still "working", because some "people" are still allowing it. And if we want things to stay this way, then we'd better not screwing with ICO's/crowdsales/whatever, because some authorities can find their reasons to get more deeply involved and then we are all f*cked.

You are right about the day traders. The volume of ETC + ETH was about 100,000 bitcoins a few weeks ago. But today's volume is just 15,000.

[raphma]

Personally, I think DAO is a joke, from a certain point of view, it personally split the ETH, the emergence of ETH and ETC

That was not intended as a joke. It was a good experiment. But it failed due to a bug in the software implementation.

it was a joke... the biggest crowdfunding ever without proper auditing and testing... a joke.

[Hueristic]

Personally, I think DAO is a joke, from a certain point of view, it personally split the ETH, the emergence of ETH and ETC

That was not intended as a joke. It was a good experiment. But it failed due to a bug in the software implementation.

As if it can be expected that complex code will not contain a bug or an exploit.  That was the first failure but it is a *fundamental* failure: one cannot write complex software from scratch, without having it used, and the guarantee that no bug or exploit will exist.
Normal software gets around this, by updates, when bugs or exploits are detected.  But, by definition, smart contracts cannot be updated because they are a contract which has, of course, to remain in place as it was originally convened (unless you make the update part of the contract, which opens even more the Pandora's box of potential bugs and exploits).

The principle of complex, Turing complete, bug free and exploit free smart contracts from the start, unstoppable and unalterable, is an oxymoron.

Moreover, the *economic function* of the DAO was ridiculous, as I posted earlier.  There's nothing the DAO could economically accomplish which simple crowd funding cannot accomplish.   It just got vastly more complicated, where some privileged got more to say about other people's money.

I really wonder what was the sense of this experiment, of which the disastrous outcome was evidently predictable.  Did one really need to mess with $150 million to find out the obvious ?

Keep in mind that not only the DAO got hurt, but the entire market. Before the attack, market cap of the cryptocurrencies was about $14.2Bn and it was shrinked to ~$12.5Bn in a ~week. Bitcoin was at its peak since the beginning of 2014. Look what I've said 2 days before the attack:

You can't just take $200Mn from the people, without doing vast amount of researches on your product (though I admit again that I didn't make any deep researches on ETH or DAO)! This could kill all the crypto!

... and what Hueristic answered:

...This could kill all the crypto!...

LOL, not a chance in hell. When it crashes and burns it'll just get more peops interested.

I believe its safe to say that the DAO failure caused a few hundred million $ (quite possible to be even over a billion $) in losses. Its not like I'm bragging or anything, but I was expecting this to happen and it was the main reason to start this thread. Projects are coming and going all the time, but when it comes to a project with such funds, then we should all worry about on what may happen in future.

The night is young my friend, it will come to pass.

[Fanpant]

Personally, I think DAO is a joke, from a certain point of view, it personally split the ETH, the emergence of ETH and ETC

That was not intended as a joke. It was a good experiment. But it failed due to a bug in the software implementation.

it was a joke... the biggest crowdfunding ever without proper auditing and testing... a joke.

That is right. In the future, all the program/codes need to be tested throughly on the testnet before they can be released on the main net.

[dinofelis]

That is right. In the future, all the program/codes need to be tested throughly on the testnet before they can be released on the main net.

I think that is not sufficient.  First of all, you can hardly test a contract for a year on a test net, because then it is much less hassle to go through the normal legal system.  The idea was to make contracting "light quick and easy". Also, contracts can contain ideas, and agreements which are confidential until they are made.  If you make them public before the deal is real, you lose a lot of competitive edge.

But most of all, if contracts run on a testnet, there will not be the same incentive to hack them than if they are for real.  In fact, I would look at contracts running on test nets, try to find hacks into them, not reveal them until the contract runs for real and then attack it.  The test net phase simply gives me more time to find a hack.

[Ruhtilg]

That is right. In the future, all the program/codes need to be tested throughly on the testnet before they can be released on the main net.

I think that is not sufficient.  First of all, you can hardly test a contract for a year on a test net, because then it is much less hassle to go through the normal legal system.  The idea was to make contracting "light quick and easy". Also, contracts can contain ideas, and agreements which are confidential until they are made.  If you make them public before the deal is real, you lose a lot of competitive edge.

But most of all, if contracts run on a testnet, there will not be the same incentive to hack them than if they are for real.  In fact, I would look at contracts running on test nets, try to find hacks into them, not reveal them until the contract runs for real and then attack it.  The test net phase simply gives me more time to find a hack.

That is right. It is quite difficult to test the contracts on the test net. Hackers will not be interested. They have less incentive to do that.

[Gaugh]

There should be a regulatory body to ensure coins comply with a set of minimum standards.
Developers have to stop rolling out coins that are copies of existing ones, and their coins must not be of low standards.

[dinofelis]

There should be a regulatory body to ensure coins comply with a set of minimum standards.

You really understood the sense of crypto, didn't you ? 

[nova-rider]

Hard to know that's the biggest crowdfunding ever in crypto.

[spartak_t]

The night is young my friend, it will come to pass.

Sure, agreed, but that won't change the fact that probably some people out there committed a suicide because of what happened.

There should be a regulatory body to ensure coins comply with a set of minimum standards.

You really understood the sense of crypto, didn't you ? 

Sounds funny, but I was implying this in my previous comment.

[Minecache]

The DAO didn't fail, it was hacked. There is a MASSIVE difference.

And even if it had failed, which it didn't, there is no dishonour in trying to innovate or succeed. The shame is in doing nothing.

I hope there is a DAO2.0. I'll invest in it in a heartbeat.

[Hueristic]

The night is young my friend, it will come to pass.

Sure, agreed, but that won't change the fact that probably some people out there committed a suicide because of what happened.

Many people deserved alot more pain than the bailout scumsuckers ended up getting.

[dinofelis]

The DAO didn't fail, it was hacked. There is a MASSIVE difference.

"the safe didn't fail, it got cracked by the burglar".   
A smart contract "getting hacked" according to its own terms, is about the biggest failure you can imagine for a smart contract.

It is the equivalent of having on your fire insurance contract small print that says that you owe the insurance company 10 times the value of your own house if they re-imburse you for fire.  And then you are amazed that you're broke whenever your house burns down and they send you a lawyer to get 9 times your house's value from you.  Wonder whether you would consider that fire insurance a great success or a failure.

I hope there is a DAO2.0. I'll invest in it in a heartbeat.

Give me the weekend, I'll write one for you.  On ETH if you want...

[spartak_t]

The DAO didn't fail, it was hacked. There is a MASSIVE difference.

Your stupidity always amuses me.

Fantastic article by Alex Van de Sande dispelling all the FUD and lies currently being propagated by the ETC criminal coin tards.

https://medium.com/@avsa/the-truth-about-the-fork-fd040c7ca955#.ho7lo8uxv

[loveofmylife]

The DAO didn't fail, it was hacked. There is a MASSIVE difference.

Your stupidity always amuses me.

Fantastic article by Alex Van de Sande dispelling all the FUD and lies currently being propagated by the ETC criminal coin tards.

https://medium.com/@avsa/the-truth-about-the-fork-fd040c7ca955#.ho7lo8uxv

LOL, stupid people wouldn't admit dao has been failed, it is delisted from coinmarketcap, which means dao has been officially dead.

[iCEBREAKER]

The DAO didn't fail, it was hacked.

Quoted for hilarity.

Nice distinction without a difference you've made there.   

I hope there is a DAO2.0. I'll invest in it in a heartbeat.

Also quoted for hilarity.   

If Mindcrash didn't exist, we'd have to invent him.  Nobody else so neatly encapsulates the blithering hubris of the ETH Bailout Fork mindset better than he does.

[bbc.reporter]

The DAO didn't fail, it was hacked.

Quoted for hilarity.

Nice distinction without a difference you've made there.  

I hope there is a DAO2.0. I'll invest in it in a heartbeat.

Also quoted for hilarity.  

If Mindcrash didn't exist, we'd have to invent him.  Nobody else so neatly encapsulates the blithering hubris of the ETH Bailout Fork mindset better than he does.

Minecache is so desperate that he will say anything to justify his denial and blindness. The DAO did fail because it was hacked. You know why it was hacked? The answer will give you more clarity. I suggest you read and reread everything that happened with the DAO hack. It was not secure. It was a failure waiting to happen the day it was released.

I hope you invest in the DAO 2.0 too. I also hope the slock.it team is the one developing it again. Good luck bagholding that because you will be the only investor.

[anthonydar]

The DAO didn't fail, it was hacked.

Quoted for hilarity.

Nice distinction without a difference you've made there.  

I hope there is a DAO2.0. I'll invest in it in a heartbeat.

Also quoted for hilarity.  

If Mindcrash didn't exist, we'd have to invent him.  Nobody else so neatly encapsulates the blithering hubris of the ETH Bailout Fork mindset better than he does.

Minecache is so desperate that he will say anything to justify his denial and blindness. The DAO did fail because it was hacked. You know why it was hacked? The answer will give you more clarity. I suggest you read and reread everything that happened with the DAO hack. It was not secure. It was a failure waiting to happen the day it was released.

I hope you invest in the DAO 2.0 too. I also hope the slock.it team is the one developing it again. Good luck bagholding that because you will be the only investor.

If the DAO 2.0 is secure, I will invest in it. But I will just invest in a smaller amount. After it is proved safe, I might invest more.