Block chain fork: Can now FinCEN legally go against Bitcoin core devs?

[Sergio_Demian_Lerner]

The block chain fork has left us with many interesting technical teachings but maybe the most important consequence is legal:

The core developers, made a coordinated and centralized effort to convince control the miners. During this event, more than 51% of the mining hashing power obeyed the advise commands of the core developers. So they have proved they are (at least to some extend) in control of the network. The same argument Patrick Murck used in https://bitcoinfoundation.org/blog/?p=131 can now be used against the code dev team.

Has anybody thought about the legal consequences of this ?

Can the core devs now bear "the legal liability for managing and providing an unlicensed, unregistered pre-paid access program that allows private and unlimited peer-to-peer transactions"?.

Obviously is up to discussion if the core devs suggested to downgrade the version or they commanded to do so. I think the FinCEN will be reading the chat transcripts right now, looking for incriminating words.

Best regards,
 Sergio.
    

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[flix]

The core developers, made a coordinated and centralized effort to control the miners. During this event, more than 51% of the mining hashing power obeyed the commands of the core developers.

"Control" is a strong word. You mean "convince". Thankfully bitcoin remains 100% voluntary, as does the blockchain.

The difference between leadership and power is still one that most Bitcoin users appreciate. It is also one of the things that sets Bitcoin apart from its competition.

From the legal perspective I think that the devs have pretty good plausible deniability that they have any effective control. They can convince the network to do what it wants to do anyway. Call me when Andresen et al manage to convince the miners to do something that they don't want to do.

[Sergio_Demian_Lerner]

The core developers, made a coordinated and centralized effort to control the miners. During this event, more than 51% of the mining hashing power obeyed the commands of the core developers.

"Control" is a strong word. You mean "convince". Thankfully bitcoin remains 100% voluntary, as does the blockchain.

The difference between leadership and power is still one that most Bitcoin users appreciate. It is also one of the things that sets Bitcoin apart from its competition.

From the legal perspective I think that the devs have pretty good plausible deniability.

Yes, I will change the original message to soften that.

[Sergio_Demian_Lerner]

http://bitcoin.org/chainfork.html says:

"What is being done: Large mining pools running version 0.8.0 were asked to switch back to version 0.7, to create a single block chain compatible with all bitcoin software."

[TheButterZone]

The miners switched because of my tweet.

http://twitter.com/TheButterZone/status/311288045439688704

I'm not a dev of any sort.

Sorry, FinCEN.

LOL

[Sergio_Demian_Lerner]

The miners switched because of my tweet.

Check this ...

http://bitcoinstats.com/irc/bitcoin-dev/logs/2013/03/12

...
00:22    gavinandresen    the 0.8 fork is longer, yes? So majority hashpower is 0.8....
..
00:23  gavinandresen    first rule of bitcoin: majority hashpower wins
(Gavin wants NOT to take the decision)
..
00:23    Luke-Jr    gavinandresen: majority hashpower has never ruled on a hardfork before
...
00:28    sipa    gavinandresen, Luke-Jr, jgarzik, MagicalTux, Eleuthria: i don't think we can choose the 0.8 fork at this point, there is too much risk
(Sipa uses the word "choose")
...
00:53    sipa    we have ~decided that getting miners temporarily back on 0.7 is the best solution now
(Again Sipa uses the word "decided", but "we" is not clear)
...
01:12    gavinandresen    Everybody mining on version 0.8 should stop mining for now. When you start again in a few hours, you should set your maxblocksize to 500k or less.
(Gavin tells people they "should" stop mining with 0.8 )

Now check this:

http://sourceforge.net/mailarchive/message.php?msg_id=30587843

[Bitcoin-development] Warning: many 0.7 nodes break on large number of tx/block; fork risk
From: Pieter Wuille <pieter.wuille@gm...> - 2013-03-12 00:18

...
Immediate solution is upgrading to 0.8, or manually setting the number of
lock objects higher in your database. I'll follow up with more concrete
instructions.

If you're unsure, please stop processing transactions.

(here Sipa is talking about "instructions"). This word has many meanings, but one of them is "An authoritative direction to be obeyed")(http://www.thefreedictionary.com/instruction)

But the worst part is the alarm itself because it's SIGNED by the dev team:


CAlert(
nVersion = 1
nRelayUntil = 1363051236
nExpiration = 1363064736
nID = 1030
nCancel = 1001
setCancel =
nMinVer = 70001
nMaxVer = 70001
setSubVer = "Satoshi/0.8.0/"
nPriority = 5000
strComment = ""
strStatusBar = "URGENT: chain fork, stop mining on version 0.8"
)

Now that's clearly an order.

En Spanish there is a proverb: "el pez por la boca muere" which means "fish die by the mouth".

[flix]

The miners switched because of my tweet.

http://twitter.com/TheButterZone/status/311288045439688704

I'm not a dev of any sort.

Sorry, FinCEN.

LOL

Clearly TheButterZone is on the hook for this one. The dev team were just following his orders.  ;-)

[jimbobway]

But the worst part is the alarm itself because it's SIGNED by the dev team:

CAlert(
nVersion = 1
nRelayUntil = 1363051236
nExpiration = 1363064736
nID = 1030
nCancel = 1001
setCancel =
nMinVer = 70001
nMaxVer = 70001
setSubVer = "Satoshi/0.8.0/"
nPriority = 5000
strComment = ""
strStatusBar = "URGENT: chain fork, stop mining on version 0.8"
)

Now that's clearly an order.

En Spanish there is a proverb: "el pez por la boca muere" which means "fish die by the mouth".

In defense of the dev team they could have also coded instructions to execute upon a signed order.  Instead, they did not do that.  It is just an alert msg that is voluntary.

[Sergio_Demian_Lerner]

Please understand that I'm not trying to go against the core dev team.
I KNOW the did not order anything.

I just want to analyze if there is any piece of evidence that can be used against them.

[Stephen Gornick]

I just want to analyze

Let's say I am a distributor in the wholesale flower business.  Some of my business comes from selling flowers to street vendors.  Street vending requires a license in my town, let's say, but I suspect none of the street vendors I sell to are licensed.  So a particular vendor normally sells on the corner of Main Street but I know the city will be closing that street for construction.   So I advise the street vendor to sell on a different street.

My advice was used and flowers were sold.  Without my advice those flowers might not have been sold.  Am I in trouble for selling flowers without having a vending license?  I don't think so.  I didn't sell on the street and I didn't receive the revenue or profits from the sale (at least not directly).

[markm]

If "they" wanted to maybe "they" could claim that just like the source code is the specification, so also is the source code the contractual agreement through which the authors of that "contract" direct and order and control the distributed operation of [such a venture] ?

To what extent do "they" get to just [kill anyone Obama says is a terrorist / do WTF they choose ] ?

-MarkM-

[nikkisnowe]

Can the core devs now bear "the legal liability for managing and providing an unlicensed, unregistered pre-paid access program that allows private and unlimited peer-to-peer transactions"?.

I'm trying to follow your question here.  What legal liability do you think the developers of bitcoin have?  You refer to bitcoin as being unlicensed?  Licensed by who?  If I create an iPhone app, there's no licensing involved.  The same is true with registration.  Registration by who?  And for what?  And what do you mean when referring to a pretty paid access program? 
I'm trying to wrap my head around what kind of duty that you think would exist between a user and developer of bitcoin.

[nikkisnowe]

Never mind.  Under FIN-2012-R003, you might have a point.  If the government wanted to make things difficult, they might make an argument that developers of bitcoin could get shoehorned into the definition.

[Come-from-Beyond]

Sorry for a little derail but I'd like to ask USA citizens:
- Are u just kidding in this thread? I can't believe u care about what FinCEN can do with ur bitcoins.

[nikkisnowe]

The question is not about what the government can do to bitcoins or the bitcoin network.  The question is directed at how the government can hold accountable the developers personally as a result of the laws related to prepaid access programs.  You can make the argument that if the developers are penalized personally in some way, some other developer will take their place.  Still, you have to age that such action will result in a chill regarding project development. 

[Walter Rothbard]

Has anybody thought about the legal consequences of this ?

Oh no!  Free people doing what they want with their own hardware!

Can the core devs now bear "the legal liability for managing and providing an unlicensed, unregistered pre-paid access program that allows private and unlimited peer-to-peer transactions"?.

Why would people need a "license" to operate their computers as they desire?

[justusranvier]

If FinCEN ever wants to go after the Bitcoin core devs they'll just do it. The details of the laws aren't particularly important because if they want you bad enough they'll go through the law and regulations with a fine toothed comb until they find something, somewhere you've violated.

Even if they miraculously can't find anything specific to hit you with they'll just harass you into bankruptcy by with prosecutions that they lose in court, but which cost you a fortune in legal bills.

If they decide they want you they'll get their pound of flesh, one way or another.

[benjamindees]

Downgrading is standard industry practice when faced with new bugs.  It would have been worse for the devs to try to push forward their new version.

[K1773R]

The block chain fork has left us with many interesting technical teachings but maybe the most important consequence is legal:

The core developers, made a coordinated and centralized effort to convince control the miners. During this event, more than 51% of the mining hashing power obeyed the advise commands of the core developers. So they have proved they are (at least to some extend) in control of the network. The same argument Patrick Murck used in https://bitcoinfoundation.org/blog/?p=131 can now be used against the code dev team.

Has anybody thought about the legal consequences of this ?

Can the core devs now bear "the legal liability for managing and providing an unlicensed, unregistered pre-paid access program that allows private and unlimited peer-to-peer transactions"?.

Obviously is up to discussion if the core devs suggested to downgrade the version or they commanded to do so. I think the FinCEN will be reading the chat transcripts right now, looking for incriminating words.

Best regards,
 Sergio.

i always enjoyed reading ur stuff but this is utterly bullshit, im disappointed.
Pools / Miners didnt "obey" to the core dev, they were simply working together fixing the chainfork.
IF the core devs would tell pools/miners to do stuff that hurts/destroys bitcoin, pools/miners obviously would ignore this request.
its a shame. the core devs fixed a problem which had to be fix, so you and all other users can continue to use bitcoins. if they would have done nothing, then bitcoin would be ruined and you would be outraging why they didnt do anything. this is hilarious and just prooves that the bitcoinfoundation is a huge joke...

[benjamindees]

This thread is a good example of the infection of the legal system by people who are completely unable to recognize agency.

[Sergio_Demian_Lerner]

i always enjoyed reading ur stuff but this is utterly bullshit, im disappointed.

You're "disappointed".
What kind of i@!@t are you?
Just don't read my damn posts!

[HiveLibrary]

Bitcoiners, create something soccer moms will relate to or soccer moms will kill Bitcoin by begging them to shut down them evil drug dealers on the Internets.

Stop hoarding you morons and start building.

Some of us already are.

[Timo Y]

Influence is not the same as control.  They made a recommendation.  The market decided in favor of them. That's it.

If Linus Torvalds proposes a Kernel change, and the change gets accepted, and it ends up costing Facebook millions of dollars, can Facebook sue Linus for damages? Of course not.

[HiveLibrary]

Please understand that I'm not trying to go against the core dev team.
I KNOW the did not order anything.

I just want to analyze if there is any piece of evidence that can be used against them.

I think at this point the real danger is not what they could do in an honest manner, but what they want to do.

Even if they demanded that people switch, short of buying up botnets galore at a loss, they could not force it as there is no contractual binding by which they could legally punish those who refuse. A contract requires two parties or none exists.

What's really dangerous is their ability to confuse regulators with more power than they have.

This is where the libertarian ideal of leave me alone fails. Being left alone does not excuse you from reality. If we fail to inform and educate we deserve all the consequences.