What's crazy to me about the whole thing isn't the bug in the DAO nor the fact that it's being taken advantage of. As you say, it's all very early stuff, and there's no surprise that it hasn't been fully worked out yet.

What does surprise me is that people poured the equivalent of tens of millions of dollars into this new, unproven thing. To me, this says that while Ethereum itself may be technologically fine, the community is completely bonkers.

There is a lot of speculative fervor going on. It's like any fad, except you can count the "value" generated by the waves of PR.

The underlying tech is clever though; the speculation is just a side-effect of cryptocurrency systems that they attract a lot of people who attempt to make a quick buck from during the rapid growth phase.

As others have pointed out, this is not a bad thing b/c speculation is one legitimate way that cryptocurrencies can bootstrap themselves, even if (over time) their strengths are not likely to result in more speculative behavior than is found in other established currencies.

Isn't pouring millions of dollars into new, unproven things the entire premise of venture capitalism? Great risk for great reward.

The outrageous investment in Ethereum/DAO does seem to highlight a desire for governance models outside of the corporatist status quo we live under today, though. Personally, I don't think it's bonkers to yearn for something better. But it's a hope that needs to be tempered with vigilance if people are going to avoid being duped.

Usually the millions of dollars comes after there's some sort of promise shown. This is basically the equivalent of doing an IPO with nothing but a nice-sounding business plan, and having people shower you with money only to discover that, oops, your real business plan is to take the money and flee to the Cayman Islands with it.

To be fair, people poured millions of dollars into a drunken pirate investment company (pirateat40). "I'm going to take your money and drink it away, har har" was somehow better than the alternatives, which often involve basically-impossible-to-circumvent paperwork requirements(buying stock without a phone/mailing address, say), obtrusive spy-on-your-customer policies, risk of having your wealth appropriated by governments like the government of Venezuela and so on.

Consider the fact that many who bought ETH did so with BTC, and that these BTC might have been acquired for a lot less than what the equivalent ETH are now worth.

Tulips.

Or their other options are ripe for disruption

This is fascinating. How do ancaps propose that DRO's will enforce their judgments? With violence? What's to stop the losing party from just gathering a bigger militia and shooting back to prevent collection?

The most effective way is likely ostracism, or some other penalty based on reputation. If someone doesn't pay their debts, people just stop trading with them. I'd posit that most people are interested in restitution, rather than punitive measures, which would be the primary goal of a DRO -- making the victim whole again. This is why DROs would likely function similar to an insurance agency.

The non-aggression principle is a central tenet in ancap philosophy which would preclude violence in most cases, however, it is permitted in self defense of ones person or property. Still, most people who subscribe for a DRO probably aren't going to want to pay the high costs for a standing militia. Would you voluntarily pay taxes for the War on Terror, or the numerous other military boondoggles across the globe, if you had a choice and knew the actual costs?

This ventures into the territory of private defense agencies, which decentralize security services, and is a deeper subject. If you want to dive in, I'd suggest Michael Huemer's book "The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey" in which he debunks the Hobbesian war of all against all scenario. "Practical Anarchy" by Stefan Molyneaux is also a decent (and free to read) overview of how ancap voluntarism could work, but Huemer's arguments are more comprehensive.

"If someone doesn't pay their debts, people just stop trading with them."

... Unless that impacts their bottom line. In reality, this is unsolvable - if it were, boycotts, divestments, and employer blacklists would be far more effective. You can always find scabs that will compromise on principle in order to put food on their table.

> The non-aggression principle is a central tenet in ancap philosophy which would preclude violence in most cases, however, it is permitted in self defense of ones person or property.

What if someone disagrees with the non-agression principle or uses a very liberal definition of "self defense"? If I'm the only one who is permitted to use violence to defend myself, does this mean I have to carry a weapon with me at all times (and hope the other one doesn't have a bigger gun/has hired the more expensive security force)?

The collection could be written as part of the smart contract that wants to use the service of the DRO (of course that part would have be be bug-free…).

Generally, I think ancaps would argue that violence wouldn't occur because it is too costly (as they do in the context of private defence agencies [1]).

Anyway, I believe this argument is flawed, in the sense that people have resorted to violence, despite the fact that it was nonsensical in economic terms (I'm looking for the quote of some prominent intellectual who argued around ~1914 that no big war could ever happen again, because it would be devastating in economic terms. He was proven both wrong and right in the sense that it indeed was devastating for the economy and that it occurred anyway as we know. If somebody knows the name of this gentleman please let me know).

[1]: https://en.wikipedia.org/wiki/Private_defense_agency

A counter-argument is that most of the American population did not want to enter either of the world wars, but were dragged into it by state and corporate interests who, unlike the general population, did stand to profit enormously from the war. PDAs would not have the authority to do this.

As far as I understood it though, ancap wouldn't forbid any of the corporations that did profit from the war. (Or, in fact couldn't forbid it as this is the whole point). So what would prevent those corporations from engaging in the same war propaganda that the states did?

One solution would be for (some) individual contracts to be programmed to have "curators" with an expanded role. These curators would have dictatorial powers (via a supermajority vote of the curators) to nullify and replace the entire contract. However, they would promise to do this only in case of a genuine software bug, or if ordered to do so by a court with jurisdiction over them, not for any other reason. There would be many curators. Many of them would be professional curators, similar to professional accountants or trust executors, who work for huge firms which, like Big Four accounting firms, have a lot to lose if any of their members are caught misusing their power.