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Comment by MereInterest | Hacker News Reader

Wait, the cryptocurrency community is going back to smart contracts? I thought the hype had died down there after (1) the DAO hack showed that smart contracts are nothing more than self-funded bug bounties, and (2) the founders using social pressure to override the DAO contract showed that smart contracts are just as vulnerable to human interpretation as any real contract.

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They never stopped? Smart contracts have grown vastly more sophisticated since the old DAO, with flash swaps, decentralised exchanges, overcollaterised loans, bridges, NFTs, and more ERC20 tokens than you can count.

Has the added complexity had a corresponding increase in correctness?

They are and they keep getting hacked and losing millions of “dollars”

Here’s the most recent (that I’m aware of) https://www.theverge.com/platform/amp/2021/12/2/22814849/bad...

They never learn their lesson

Here's a site that follows most of the hacks: https://rekt.news

The difference between this and the private business world is that private businesses don't publicize when they've been hacked and extorted for millions of dollars.

...because if they did their insurance would tell them to fuck off. Conversely, these "DAO leaders" have nothing left to lose. I'm not surprised that they throw their cards on the table when they've been screwed.

The incident you linked was due to a front-end exploit rather than anything with smart contracts.

Oh, well in that case I definitely feel more comfortable putting my life savings in.

Were these all front end exploits too?

https://ndxfi.medium.com/indexed-attack-post-mortem-b006094f...

https://www.elliptic.co/resources/defi-risk-regulation-and-t...

https://arstechnica.com/information-technology/2021/12/hacke...

https://therecord.media/hackers-steal-29-million-from-crypto...

https://www.cnbc.com/2021/08/19/liquid-cryptocurrency-exchan...

https://www.dw.com/en/hackers-steal-600-million-in-record-br...

https://fortune.com/2021/06/24/bitcoin-ameer-raees-cajee-the...

No offense but your comment pretty clearly shows you don't know what you're talking about if you think there has been some recent "going back" to smart contract

Well, yeah. That's why I asked it in order to learn more. I don't keep up with the latest trends in cryptocurrency, for the same reason that I don't keep up with the latest trends in astrology: Because the fundamental concept is so egregiously flawed that anything built on top of it is doomed from the start, and that nothing in any of the investigations I've done over the past decade have changed that conclusion.

But I at least like to know the general terms that are floating around, both in case one of them happens to change my mind on cryptocurrencies, and so that I know what to warn family members away from if they ask.

Could you explain why you think the fundamental concept is egregiously flawed?

All the standard reasons that cryptocurrency fans dismiss as having heard over and over, but I have yet to hear good responses to.

* Proof of Work is unethically wasteful. Proof of Stake is unethically oligarchical.

* Far too wild of price swings to be used as a currency.

* Inventory tracking with blockchain has the same problem as any other inventory tracking system, that it relies on humans putting in truthful information.

* Smart contracts assume that the hard part of a contract is the enforcement, not the meeting of the minds. Having a human as part of the conflict resolution (i.e. the legal system) is necessary.

* Irreversible transactions are a bug, not a feature, and are what drove the rise of ransomware.

* Negative impact on the GPU market for actually productive uses.

Cryptocurrencies are fantastic for money laundering and paying for illegal services, but I don't think those are exactly good reasons to keep them around.

And yet the value keeps going up. I appreciate you people, the constant reminder that so many of you hold these incorrect views really magnifies the sense of "getting in early".

Markets can be irrational, especially when they're unregulated.

Smart contracts are huge in crypto currency and are likely here to stay. Afaik all of the top 10 crypto currencies by market cap have smart contracts or plan to have them except bitcoin and tether.

They power decentralized apps and defi. Without them then a blockchain doesn't have much utility aside from processing transactions.

Well to be fair, blockchain doesn’t have much utility with them either.

Bitcoin has smart contracts now.

> Bitcoin has smart contracts now.

Mmmh, that's a little bit of a stretch.

They're building infrastructure (eg taproot) with a goal to support them in the future.

But doing ETH-like dapps on Bitcoin is nowhere near ready (or, if you listen to some Bitcoin folks, even desirable).

Bitcoin‘s scripting is not Turing complete and therefore does not lend itself easily to sophisticated smart contracts. It will probably always be limited to variations on money transfers.

However, Bitcoiners consider this an advantage as this makes it less vulnerable to exploits. And the Lightning Network is quite an exciting development.

I consider the competition between the two networks good as they are exploring different but nonetheless useful niches.

>except bitcoin and tether

Tether is a smart contract itself

Pretty much everything "non-standard" on the blockchain is a smart contract, it's just a piece of code describing some expected behavior. NFTs are smart contracts for example.

You may want to do a health check on your filter bubble.

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