Ethereum has had many discussions over its lifetime on how to proceed with its development, but one of the biggest ones has always been the recovery of lost or stuck funds. This discussion has heated up recently as the result of EIP 867 (introduction of ERPs) and EIP 999 (restore contract code of Parity WalletLibrary contract which was destroyed), but the discussion has been mostly limited to the Ethereum community.
However, I think the discussion of these two EIPs has ramifications far beyond just Ethereum. The debate over these EIPs includes topics such as:
- Decentralization
- Immutability
- Changes at the protocol level vs the application level
- Cryptoasset governance
These factors are critical for ALL public blockchains. The general community, both in social media and on Github / Ethereum Magicians, appear to be against any EIPs relating to recovery. The reasons often quoted include:
- Sacrificing Immutability
- Providing too much power / responsibility to EIP editors
- Sets precedent which can lead to slippery slope (what do we allow to be recovered?)
- Sets precedent of too big to fail
- Bad code should have bad consequences
- Changes shouldn't be made at protocol level
- Many more - Check discussion links
The video includes details about what an EIP is, what these two particular EIPs are, and my overall opinion. Personally I am in favor of EIP 999 as I think it is undeniably an exception (due to both the amount and people involved), but am uncertain about EIP 867. EIP 867 will mostly benefit businesses who develop on top of Ethereum (in my opinion), which is excellent, but like many others, I am concerned of how it would turn out in practice.
What are your thoughts?
Links:
EIP Description: https://github.com/ethereum/EIPs/blob/master/EIPS/eip-1.md
EIP 867: https://github.com/ethereum/EIPs/blob/master/EIPS/eip-867.md
EIP 999: https://github.com/ethereum/EIPs/blob/master/EIPS/eip-999.md
EIP 867 (Discussion): https://ethereum-magicians.org/t/eip-867-standardized-ethereum-recovery-proposals-erps/139
EIP 999 (Discussion): https://ethereum-magicians.org/t/eip-999-restore-contract-code-at-0x863df6bfa4/130
Great topic, I enjoyed the video. One reason why EOS will be better than Etherium: EOS already figured out how to deal with these situations.
"Too big to fail" — I HATE HAAAAAAATE that phrase
This is why I’m putting my money in EOS and ADA. “Sarcasm”
Interesting debate. I support both of the proposals. If 999 is passed then 867 is necessary for similar situations in the future.
bad code having consequences is a foundation of blockchain security and reliability. However, in software this is not always a hindrance for success. Microsoft windows deliberately has a corrupt kernel that needs constant patching and updating to remain secure and reliable. Linux does not suffer from this problem, yet Microsoft is the commercial success.
Ethereum may end up in the same boat, being commercially successful but foundationaly a hot mess that costs 100x more to maintain than it should.
The second bailout of Ethereum will be the final nail in the coffin, just like it was for fiat money.
This is a complex issue with no easy solutions. Next to none smart contracts will be be bug free so major bugs will happen.
In theory there should be some roll back procedure but the problem is how do you police it and who does the policing. It could potentially open the door to "too big to fail". If the ledger is no longer immutable it kind of defeats the reason for using a block chain.
I side with "code is law" and would disendorse both EIPs, but I believe innovative fund recovery schemes should be studied.
A sample situation I came up with
If your house got burned down, there's no way to beg the universe to un-burn the house. Most people have home insurance to deal with this problem.
The universe is totally "immutable", as in the valid state transition sense, but blockchains are actually governed by consensus, for example, the DAO fund recovery was authorized by protocol change.
Insurance schemes are proposed in discussions surrounding EIP 867 and EIP 999, and they are application or off-chain solutions.
Solving the problem with better smart contracts
I know immutability is important. I have heard every arguments for it, but I also know that lost funds is sometimes not the victim's fault and "all software have bugs" is something almost every software developer on Earth have accepted. This means, smart contracts themselves need to be amended to fix their security holes. However, echoing the immutability arguments, smart contracts (from 2-party gambling sessions and atomic swaps to complex ERC20 tokens) are contracts and are not meant to be broken, or else they are useless.
Some smart contracts solve this problem with migration schemes, either activated by the contract's owner or through a vote by participants.
On-chain fund recovery scheme
A solution I want to explore is fund recovery through block rewards (also mention in EIP 867 discussions). Every block reward has a % allocated to slowly pay off those who lost their money. The lost fund is paid off in months or in years, so that the right amount of consequences of bad decisions are suffered ($100 fine, not death penalty, for littering). Since hacking and lost funds are socially recognized, on-chain voting to allocate fund recovery seems to be a good idea. But there are details to iron out: What kind of majority is required? What about vote buying (Vitalik thinks every voting system suffers this), voter apathy, privacy of wallet owners, and using it for non-fund recovery situations?). Depending on the voting system, this scheme can also suffer "too big to fail" problem since major dApps are better at campaigning for votes.
@cryptovestor Have you left youtube and steemit for good?
Hi. I find this topic really interesting. I was sceptic about Ethereum for a long time, I still am but it's good sign that they include the community in this discussion and don't just do whatever they feel like.
I have a question about something else. Today I've read this post on reddit:
It explains how no current currency can be decentralized, secure and infinitely scalable at the same time. It also talked about the consensus form of EOS being very centralized because not a lot of people have enough computing power to maintain such a node. Also the ones who will run such a node will have an incentive to bribe other users that own a lot of EOS to vote for them again in return for a few percents of the node owners earnings.
Then I thought about my NEO. I like(d) NEO and was really happy when I got it last december. It seemed pretty similar and I dug up the stuff that I've read about it a few months ago and it acutally is quite similar if not the same. Only with NEO there is also the chinese government with their fingers in the game.
So I thought about selling it because I don't want to be invested in a project with no intrinsic value. If the nodes shut down, the whole thing is gone.
On the other hand there are so many people working on this project, the community stands behind it very strongly, there are a lot of upcoming ICOs and as I already mentioned the chinese government is backing the project which can actually be seen as a security too. Because if the chinese government is involved they certainly won't let it fail.
I'm in conflict because on one hand this sounds like the opposit of what crypto is about but on the other hand it most certainly won't fail.
I just wanted to get my thoughts out and hear your oppinion if you have time to answer. Thanks.
EOS, a centralized cryptocurrency is what we might need at the current moment. To have the platforms, even though centralized, but to have them functioning. Like coinbase or gemini, they are centralized but required for crypto to function.
I believe EOS could be the first step and then Ethereum he second. Just like right now we have decentralized exchanges, but that came after the centralized ones.
Great topic,
Possibly the most technical video you've put out,and nice way explaining of it.
I was watching this with my 2 IT guys at work...well done.
Kudos @cryptovestor
A great video as usual. I am also a bit concerned about how this will turn out. The discussion is far from over though. I understand that it might be good for the users to have the option to recover lost funds- remedy their mistakes. On the other hand, the people in charge would have too much power and that could end badly. I guess only time will tell...
I loved the video, however I have found one wrong assumption: that "a lot of this rejection of this EIP is on the basis of principle as opposed ~ to what would actually happen". I do not think this is correct. Surely, many people just hate it based on the immutability principle, however after the DAO bailout, many have feared this exact moment; the time when EVERYONE asks for bailouts/recoveries/refunds. I saw a great post that illustrated this on r/ethereum titled "Why should the Parity Multisig Wallet be bailed out when all the other contract mistakes and Ether losses aren't? ". This is, in my view, the exact thing Vitalik and the part of ethereum community that backed the bailout said would not happen; that it would not set a precedent. That this was a one-time-only thing. If immutability is broken, the tech is no better than an excel sheet, where you can delete and undo anything just like you illustrated.
I think people are disturbed that not only the principle is bad, but that blockchains can and eventually will be editable. Censorable. Trust-ed, not trust-less. You are one of the smartest people that are in this space that I know of. Sure you do not day trade on leverage and make millions, but you are the man of critical thinking and deep research. Ask yourself: what will happen, when a financial crime is commited on the blockchain, masive amount of money disappears, there is a class-action against the ethereum foundation or literally anyone on the dev team, and the judge orders them to edit the chain and return the money, under the threat of inprisonment? They cannot say "no". There is already a "sleeping giant" like this with Nano development team, there are class-actions being prepared (maybe even filed, but I am not famiiar with this case) after the BitGrail hack. The defendants will stand before court, point the finger at Nano devs, and say "they stole our money, because they did not fork the chain". But Nano is immutable, and Ethereum may soon not be.
I stand by EIP999 since EIP 867 does little or no improvement to miss-transacted ETH. EIP999 also solves the current dillema and i support Vitalik's approach towards coindesk too. Thanks for the cover
Awesome post!! Have upvoted and resteemed :)))
Code is law. If someone makes a mistake, he has to live with it. If we let humans intervene then whats the difference between banks and cryptos
Correct me if I am wrong, but wouldn't the difference be that that decisions for change could be made through decentralized consensus?
i don't think so. There will be a body to review EIP and say which one are legit meaning a set of individual with power over indiiduals
Ahh, I took that body as more of a sub-committee. An important gatekeeper, but not the final arbiters. Perhaps I am completely wrong though.
I think the EIP process of voting for consensus is there for this reason. The community should weigh these proposals and vote on them for the benefits of the community and the platform. Unfortunately, there is a lack of consensus right now given some thoughts that sometimes dont make much sense. I feel there is a growing thought that forks are actually good as the lead to dividend like transactions but instead they will lead to more division in the community and less adoption.
That was very educational, thanks!
Correct me if I'm wrong, but it seems that the situation with Parity is partially the fault of the Ethereum's smart contract mechanism: for example, EIP99 mentions that "the Ethereum protocol does not allow the restoration of self-destructed contracts". So the issue is not as clear cut as "the users screwed up, they must pay for their stupidity". It's more of a "Etheureum is still a new system; we're all still figuring out the best ways how to use it, and uncovering bugs and design flaws while doing so". So in my opinion, the Ethereum developers should take some responsibility in this situation. This is a quite different situation from the one when the user "sent it to the wrong address, made a typo or something along those lines".
Thanks for the valuable info. I don't think that the adoption of even both of the discussed EIPs would be harmful. It is good to do reasonable things so people joining the crypto community wouldn't think that we are unable to resolve situations like that (lost funds).
It might even help the adoption which is the most important aspect missing and required for crypto nowadays .
I hope they reject both. ETH created the Code is Law. If they change the protocol again (remember DAO) they will probably change forever. I think that even if the community agrees, it is bad. It is bad at least for the Code is Law thesis. If People can agree off chain and will do it anytime a conflict occurs, i.e. code can be outlawed, code is not law at all.
And if code is not law, then ethereum smart contracts are massively overhyped and are not a good idea at all
Very interesting thanks for sharing!
However, I am in complete disagreement with you. First, I think that you overlook the power of incentives. Writing good code takes time and effort and review... You said that the EIP would be used by business but they are the one making the trade-off between time to code and the cost of loosing funds. Also, I think this might encourage the centralization of funds since one might be more secure to have everything at the same place instead of bearing the cost of decentralizing for security reason.
One of the reason for the existence of blockchain is to have a mutual truth that is shared on the internet. By playing with it we would loose the purpose for decentralization. By changing what used to be the truth, we introduce a point of failure in the blockchain and this is even more critical if that point rely on individuals.
Crypto investor is so wrong on this. One, you cannot support EIP-999 but not EIP-867 (or a variation). If we are going to be in the business of rolling back the network for one person, we need to set the rules for rolling back the network. Two, his argument that there is no contention about ownership doesn't work. In fact, that should be an argument in favor of not rolling it back. There is no malicious actor benefiting from some people's hard work. Imagine if instead of the funds being lost, instead, someone had figured out how to steal or hold 500,000 ether hostage. In that case, the malicious actor gets to keep proceeds of his crime because we can't roll back the chain. If EIP-999 passes but not some variation of EIP-867, ether is done. If both pass, ether will always be second to Bitcoin. Neither passing is the ideal situation.
PLEASE PLEASE mention your videos are on Steemit at the start, not the end. I do my usual searches on YT because there is still more content over there but I would rather watch your videos on Steemit. Just a simple annotation box is enough! Love your mature view on cryptocurrencies not just hype about price, keep it up!!
I think EIP999 is necessary. We shouldn't try to force decentralization on a network as we are trying right now on Ethereum. Forcing things never works out well and things like decentralization should come naturally.
Decentralized exchanges are working right now (mostly) and we didn't force Binance to become a decentralized exchange, just cause in the long term that is our aim. We need centralization first to have platforms we can rely on and have decentralized exchanges come afterwards.
Something I haven't really heard much of (but seems critical):
No blockchain is immutable... ever. Developers and miners can always change the rules. But, the rules can't be changed in SECRET. It must be public. It must be debated. It must be written. It must be reviewed. It must be adopted (by miners, and ultimately by users).
The advantage crypto has over the banking system is that our mistakes and corrections are public and transparent. Banks do their dirty work in the shadows.
EIP999 seems like a no-brainer and could serve as a model for an acceptable fix in the future.
Great! Liked video, upvoted!
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Again you have done an excellent job of explaining a complex issue to also a non-tech savvy audience. Enlightening and interesting. Thank you.
The conclusion is that unavoidable:
Code is Law, pero no mucho
Your insight into the crypto world is so valuable. Thank you for all you do!
@smartbot tip 10
Sorry @controllinghand, you can't tip yourself!
Wow, I miss these.
When its the next episode, @cryptovestor?
Crypto is the future of the world. It will be next marketing system like money
Hi there! Welcome back :)
I've been away for past 3 weeks (short holiday) and finally im back :) Loads of catching up is awaiting me now.
I checked your profile and im glad to see that you're still very active on steemit.
How have you been doing?
(I upvoted number of posts today so my voting power is runnig very low. For that reason I cant upvote your post today but i will be following you closely)
Cheers,
Piotr
also thx for interesting update about eth
Loved it!!! 👐
Hey! Great video. Unrelated to this subject- what are your thoughts of is going on with Monero at the moment? It seems that the mining malware story is driving the price down quite heavily. The question is - when would you consider it an opportunity and pick up some more Monero, while the fog of the news story still lingers on the currency?
Hello, I like your blog. Could you please contact me in Telegram for collaboration @StevenHeisenberg
Hope all is well. Just letting you know we miss your insights and commentary. Looking forward to your next post!
Cryptovestor, I hope you are well. Looking forward to more posts here and on youtube.
Visit https://cryptopiece.com/