
Trust: the inside story of the rise and fall of Ethereum - kawera
https://aeon.co/essays/trust-the-inside-story-of-the-rise-and-fall-of-ethereum
======
mistermumble
The article is sensationalist, especially with regard to the "fall" part of
the "rise and fall of Ethereum".

The reality is that Ethereum as a platform has gained strength, credibility
and market traction over the last six months. There have been 3 hard forks and
1 soft fork, partly in response to the system being under almost continuous
attack (mostly denial of service). The effective response by Vitalik and
company has increased trust, not decreased it. As the saying goes: "What does
not kill you, makes you stronger."

More and more developers building applications on top of this platform. The
MelonPort token sale ICO (on the Ethereum platform) sold out in 2.5 minutes
yesterday.

It's not just independent Ramen-fueled startups, but "enterprise Ethereum" has
become a thing. JP Morgan, Santander, Microsoft, Redhat, Cisco, Accenture, etc
-- for better or worse -- are joining the Ethereum bandwagon.

I think it is still way early to call a winner in the blockchain platform
wars. There are dozens of well-funded competitors trying to gain dominance
over established platforms like the Bitcoin technology stack and the Ethereum
platform -- including IBM-led Hyperledger Fabric and the bluechip banking
consortium led by R3CEV.

But if there is one dog at the top of the blockchain platform heap right now,
it is Ethereum.

See:

[http://www.coindesk.com/jp-morgan-santander-said-join-
enterp...](http://www.coindesk.com/jp-morgan-santander-said-join-enterprise-
ethereum-blockchain-group/)

[https://media.consensys.net/the-birth-of-enterprise-
ethereum...](https://media.consensys.net/the-birth-of-enterprise-ethereum-
in-2017-ebe7f7abed92)

[https://www.reddit.com/r/ethereum/comments/5u6uhb/melonport_...](https://www.reddit.com/r/ethereum/comments/5u6uhb/melonport_ico_is_filled_in_25_minutes_many_thanks/)

~~~
shuzhang
Not sure why the url path includes 'rise and fall' in it, it doesn't look like
it's the actual headline in the article, nor is 'rise and fall' mentioned
anywhere in the article.

The main point of the article isn't that people are losing trust in Ethereum.
It's that there's no platform that truly avoids the need to trust other human
beings (as some apparently believe). That code is not absolute law because the
community can choose to change it and affect pre-existing contracts. I don't
think he bashes Ethereum at all, but is just making the case that, if you
believe you can rely on a platform like this to avoid the need to trust in
human decisions, you're fooling yourself.

~~~
neilk
> Not sure why the url path includes 'rise and fall' in it,

These days publications are continually A/B testing headlines.

~~~
shuzhang
Fair enough. Then I'd argue maybe one headline they're A/B testing is
sensationalist, but the article itself isn't, nor does it feel like the
article is at all making a point about the 'fall' of Ethereum.

------
Animats
The only reason there was a hard fork was because it was Buterin's company
that got ripped off. If it had been anybody else, they would have lost the
money.

As for "The DAO", the biggest question on their forum is "How do I get
out?"[1] Apparently the DAO is dead, but they seem to have kept the money.

[1] [https://forum.daohub.org/](https://forum.daohub.org/)

~~~
heliumcraft
First of all the DAO was a decentralized organisation, it didn't belong to
Buterin, it isn't "Buterin's company"...

The hard fork had a lot more to do with the fact the overall community didn't
thought the system would survive the eventual switch to proof of stake if 15%
of all ether was in the hands of malicious actor. There was also the moral
matter that something could indeed be done to actually return the stolen money
to their original owners, there was consensus to do the fork and so the fork
happened.

~~~
nunyabuizness
> the overall community didn't thought the system would survive the eventual
> switch to proof of stake if 15% of all ether was in the hands of malicious
> actor

The author of Casper, Vlad Zamfir, clearly stated on numerous occasions on
Reddit that there was no risk to PoS b/c of the hack.

> There was also the moral matter that something could indeed be done to
> actually return the stolen money to their original owners

That's a really nice way of phrasing "we have a moral right to help gamblers
recoup their losses."

~~~
heliumcraft
I have seen stated that even 7% could be an issue depending on the parameters
used. Regardless, it was certainly a big concern at the time for most of the
community.

That's a bit cynical to call the token holder gamblers, sure many of them
"invested" thinking they would get some return back, but a lot of people were
genuily curious in participating in this decentralized democracy experiment
that never came to be. Regardless even if these people were 'gamblers'
stealing is still stealing and returning stolen money is the right thing to
do.

------
Jtsummers
Has the primary language for writing Ethereum contracts been improved? Or is
it still a poor language with respect to its type system and other features?

I wasn't that interested in it, but the idea of programmable contracts was
intriguing. The main issue is that they should be declarative/logical in
nature, as that's what most contracts are, instead the primary language was
imperative and had a weak type system (inexpressive). Has this situation
improved or are all contracts written in it still destined to have many bugs
due to the poor language design?

EDIT: Had to look it up, forgot the name, it's Solidity.

~~~
seagreen
Nope, they're still using Solidity.

[http://www.stephendiehl.com/posts/smart_contracts.html](http://www.stephendiehl.com/posts/smart_contracts.html)
:

> "Solidity, while being an interesting proof of concept, is dangerously
> under-contained and very difficult to analyze statically."

Solidity docs are here: [http://solidity.readthedocs.io/en/develop/solidity-
in-depth....](http://solidity.readthedocs.io/en/develop/solidity-in-
depth.html)

No referential transparency, no purity, no algebraic data types . . . it's
scary stuff for writing contracts.

It sounds like the core team has realized what a hole they're in and are
taking it seriously, which is great. But I think a lot of the Etherium-related
businesses still have no idea what a sandy foundation they're building on.
It's going to be ugly.

~~~
mistermumble
Solidity is the most widely adopted language, but there are other choices
including Serpent (Python-like)and LLL (lisp-like).

A few developers I know use Serpent because it is simple and stable (meaning
it has not been changed or updated for a while, unlike Solidity which they say
is continually being tweaked in a manner that can be aggravating).

Interestingly, Vitalik's preferred language (say for prototyping Casper
algorithms) is Python. He created Serpent and is now working on Viper, which
sounds like a next-generation Serpent. Viper is being implemented in Python3.

You can see the work in progress at:
[https://github.com/ethereum/viper](https://github.com/ethereum/viper)

~~~
seagreen
Python is a nightmare for static analysis. Basing anything contract-related on
it is the opposite of reassuring.

I think there are some really cool ideas in Etherium. Proof-of-stake is great.
Provably terminating functions are great! These ideas deserve to be paired
with a higher level language worthy of them.

------
Pent
Ethereum lost all my trust when they hardforked over a contract mistake. They
are never getting that back. I'd recommend rebranding the project to focus on
the community-driven aspect. They are no better than our current legal
framework.

~~~
heliumcraft
smart contacts are just code, they are not 'legal documents', not everyone
(most?) subscribes to the whole 'code is law' meme.

------
drcode
In related news, a company built on top of ethereum performed a crowdsale
earlier today that ended after 2.5 minutes when their 2 million dollar funding
goal was successfully reached. (There is some initial disagreement about how
to measure the time appropriately, it may have been several minutes longer)

[https://www.reddit.com/r/ethereum/comments/5u6uhb/melonport_...](https://www.reddit.com/r/ethereum/comments/5u6uhb/melonport_ico_is_filled_in_25_minutes_many_thanks/)

~~~
vkou
... And it's quite probably illegal in the US, given SEC rules with respect to
privately held companies with large number of owners.

Relatedly, from the Reddit thread:

> ICOs have nothing to do with ethereum. They can raise by any cryptocurrency
> existing or that will exist in the future. So far, they've mostly been used
> for scams, although I'm sure some legitimate projects will also be funded.

Is there a meaningful response to this? This is a serious question - how can I
tell the difference between an ICO scam, and one that isn't? Are there any
examples of sustainable businesses arising from ICOs, or are all of them pump-
and-dump schemes?

If I get defrauded by a company putting out an ICO, will anyone go to jail?

------
riprowan
This article veers between erroneous sensationalism and strategic deception.

I will attempt to debunk a few of the most important errors in this article.

In short, the author takes the position that the promise of blockchains is
immutability; and that by hardforking, Ethereum proves that "immutability"
requires trust:

> We aren’t actually trusting the blockchain technology; we are trusting the
> people that support the blockchain.

We should start by observing that un-mutated Ethereum - Ethereum Classic -
still exists. You can mine its blockchain and run contracts on its virtual
machine. So whatever point there was to be made about the untrustworthiness of
"immutability" seems false, since the "immutable chain" is still there
chugging along. The only problem is that nobody _actually_ wants immutability,
once they really think through its permutations.

\---

I will posit that "immutability" is a red herring. While some people did
promise immutability, this was a false promise made by _some_ people. _Other_
people have instead said for years that consensus blockchains like Bitcoin are
not - and don't need to be - in fact shouldn't be - "immutable." I will
further posit that this is in fact the majority view.

In fact there is a perfectly clear reason why a blockchain might "mutate" and
fail to honor the contract as it is written in code: the contract sufficiently
harms the economic majority of miners and holders.

And that is why such "mutability" is not bad, but in fact desirable.
_Otherwise, all that is needed is the invention of some sort of poison
contract, and then the network would be unable to administer its own
antidote._

This is in fact what happened when someone mined some 90M Bitcoin in 2010
_while everyone else was running code that considered these to be valid
coins._ Obviously, there was a fork, and the perpetrator's 90M Bitcoin were
taken out of the ledger. And a good thing, too: if "the code was _really_ the
law" then those would still be 90M valid Bitcoin and the whole project likely
would have been dead some time ago as the malactor would own something like
90% of the money supply.

> The code was supposed to be the law. If you didn’t see the weakness in the
> software, that was your problem

Ironically, because this is in fact a true statement, the author's point is
exactly wrong.

The code _is_ the law - not just The DAO's code, but also _Ethereum 's code_,
on which The DAO depends. Ethereum code is not only also "law", but in this
sense, it's the "highest law in the land" with respect to contracts executed
on its virtual machine.

It should be patently obvious that Ethereum's code permits forks, "soft" and
"hard." It should therefore be patently obvious that any promise of
"unstoppable contracts" is simply _overpromise._ The Ethereum global VM came
to consensus that The DAO was not just a failed contract (buggy Ethereum
contracts happen all the time) but a failed contract so toxic as to be a
threat to consensus.

So, by following one chain, a group of users may declare its will that The DAO
contract be "held invalid." By following another chain, a different group may
declare its will that the DAO contract be held "valid." Each group actually
got its will.

\---

Consensus blockchains like Ethereum and Bitcoin are not "immutable" and never
were, in the sense that all it takes is someone to mine a fork, and the chain
"mutates." This is the "permissionless innovation" aspect of blockchains:
_anyone can create a fork - though it takes a lot of hashpower to protect a
fork from hashpower attack._

But on the other hand, consensus blockchains _are_ immutable in the sense that
nobody can compel you to follow a "mutated" chain and you are always free to
continue to mine on the original chain. Moreover you can hold coins on either
- or both - chains. This is the non-compulsory nature of blockchains: _nobody
is forced to hold coins on anyone 's fork - though it takes a lot of money to
protect the value of a forked coin._

Since anyone can create a fork, but it takes a lot of hashpower and coin
holdings to sustain a fork, the system on the whole is highly resistant to -
but fortunately not completely immune from - hardforks.

Even "contentious" hardforks. Like the DAO rollback.

The beauty is that hardforks provide automatic market choice. One day there's
only one Ethereum, and the DAO attacker who holds a not-insubstantial
percentage of the entire money supply. Then there's a fork, and everyone who
held Ethereum now holds coins on _two_ chains - Ethereum and Ethereum Classic,
and can signal to the market by holding coins on one chain and selling them on
the other - or hedge by holding coins on both chains.

Do we really want true "immutability?" In the case of Ethereum, the market of
Ethereum users was offered a choice of either "mutated Ethereum" and "non-
mutated Ethereum." Since the split, the market has fairly consistently valued
"mutated Ethereum" over "non-mutated Ethereum" roughly 10:1 - and as the
article points out, even "non mutated" Ethereum Classic found itself facing a
hardfork. Uh oh.

Forks are good, because they allow markets to place bets on which outcomes
they prefer. It's also good that it's really, really hard to create
economically-viable fork.

Getting back to the first paragraph of the article:

> on that day, after much deliberation and hand-wringing, in the aftermath of
> a multimillion-dollar swindle from his automated, algorithm-driven,
> supposedly foolproof corporation, Vitalik Buterin, then 22 years old,
> announced the ‘hard fork’ of the cryptocurrency Ethereum.

Vitalik is a respected developer. I think there's a valid argument to be made
that certain high-profile devs carry more influence than is their due - but no
developer controls any consensus blockchain - not Ethereum, not Bitcoin.
Ethereum, like all consensus blockchains, is "controlled" by its ecosystem of
miners and users.

"Devs propose, the market disposes." And we have seen - the market preferred
the forked Ethereum.

> By making that announcement, Buterin shattered certain tightly held
> assumptions about the future of trust and the nature of many vital
> institutions that make modern life possible.

I hope by now we see that the only thing that Ethereum shattered is the
overpromise and undesirability of "immutability."

\---

I hold in each hand a cryptocurrency.

In the left hand, I offer a truly immutable cryptocurrency. The economic
fundamentals of this currency _cannot be changed by the will of man even if
things start going wrong with the initial assumptions upon which the money was
based._

In the right hand, I offer a _self-improving_ consensus blockchain-based
cryptocurrency. This currency cannot be easily forked, but when it does, two
things will be true: the market must value the change quite badly to stimulate
a fork, and you will be permitted to hold coins _on either side of the fork as
you see fit._

Take your pick.

[edits: a lot of stuff - I got onto a bit of a long topic and realized it
needed some editing. It still does.]

~~~
erikpukinskis
> anyone can create a fork - though it takes hashpower to protect a fork from
> hashpower attack.

Minor aside, unlike Bitcoin, Ethereum doesn't use hashpower (proof of work) as
its voting currency, it uses proof of stake.

So in order to convince the network of a lie, you need to be willing to put up
monetary bets against the truth, and then pay them.

This is very unlike Bitcoin, where you buy your mining rig, and then own it.
If you pay to fork Ethereum, your real money is at stake.

And the financial incentive for people with even more money than you is to
call your bluff and put up a bigger bet against your lie and get the cash
_and_ get your lie taken off the books.

Although they have the price structure set up so that calling a bluff is much
cheaper than lying. So really even someone with a tenth of your budget can
afford to call your bluff.

~~~
DennisP
That's a pretty good description of Ethereum's proof of stake but it won't be
in production for a year or so; for now it's still on proof of work.

------
id122015
I started to read about Ethereum and installed the Wallet but I dont
understand why the blockchain size increases so big and how fast ?

It downloaded 500MB on my SSD and I stopped it, I've read that it has to
download about 15GB. Thats too much for me. Do the other projects download
such big blockchains also ? I mean 15GB for each project ?

~~~
tromp
Popular cryptocurrencies process many thousands of transactions per hour, and
many wallets choose to retain a large fraction of that data. In which case a
few years of operations easily yields dozens of GB of storage.

In theory though, through the magic of Merkle trees, a superlight client could
get away with needing only a few KB of storage, accounting for the paths
through the Merkle tree that witness its spendable outputs. A discussion about
such a setup for Bitcoin can be found for instance at

[https://bitcointalk.org/index.php?topic=88208.msg1896213#msg...](https://bitcointalk.org/index.php?topic=88208.msg1896213#msg1896213)

I don't know of any crypto-currencies that have implemented these UTXO
commitments that would allow for such wallets though...

------
arisAlexis
for sure Etherum's hard fork was not and will not be the most important thing
that happened in my or our lifetimes as said in the blog post

~~~
aarpmcgee
The article says "philosophically interesting" – unless I am missing
something, that's a very different thing than what you're claiming the article
says.

------
singularity2001
What does he even mean by "fall of Ethereum"
[https://coinmarketcap.com/currencies/ethereum/](https://coinmarketcap.com/currencies/ethereum/)

------
realPubkey
Yes of course. Ethereum is dead. Bitcoin is dead. China banned bitcoin.

Exactly once a week, a story like this pops up. Mostly written by someone who
thinks that "blockchain is the new big-data of the cloud".

~~~
rebuilder
I didn't get that from the article at all. The point that blockchains haven't
done away with trust is an important one. That the argument that a post-fork
blockchain would be less trustworthy than it was before the fork gets made so
often tells me this article offers useful information. (The issue with forks
isn't whether or not they do occur, but rather whether or not they can occur.
A fork that can occur is a fork that just hasn't occurred yet.)

------
milansuk
Big part of releasing new technology is timing. And Ethereum came too soon.
Ethreum is big, but people just don't know it and I'm very curious what "news"
will send ether up.

