DAO rollback made them untrustable for me. You do you but a key required feature of my cryptocurrency should be sovereignty.

I hear this criticism a lot. And I don't disagree with it fundamentally, but I would be interested to hear how its advocates justify the decision. How do the Ethereum founders attempt to rebut it? Are there any good counterarguments?

I wasn't involved in Ethereum that early. But in retrospect I find it allowable/acceptable.

The reasoning is Ethereum is an early project, its design is highly centralized like a startup because very few people have the convictions and breadth of knowledge that Vitalik and co. possess. It's aspirations are not the same as Bitcoin: Bitcoin wants to provide value by being irrefutable property. Ethereum wants to be the world computer.

Ethereum's technical complexity makes Bitcoin look like a Ford Model T, while Ethereum is trying to be a space ship with warp speed capability. Obviously it is not the within the spirit of blockchains to conduct a rollback to save people's funds from hackers. But at that early stage, it might hurt adoption more than help if people get burned so badly. If we look at the tradeoffs, I think its worth it. If people prefer absolute immutability, they can use Ethereum Classic.

Ethereum was only about a year old at the time. When Bitcoin a year-and-a-half old, it had a bug that required a five-hour chain rollback.

Bitcoin people will object and say that was a bug with the blockchain itself. However, sample code on ethereum.org had vulnerabilities similar to TheDAO's bug, so arguably it was a platform issue on Ethereum as well.

There have been large thefts from contracts since then, including a >$100M theft from Parity, the most popular client at the time. Parity made several attempts to get another fork to recover their funds, and they were roundly rejected by the community.

>Ethereum was only about a year old at the time. When Bitcoin a year-and-a-half old, it had a bug that required a five-hour chain rollback.

>Bitcoin people will object and say that was a bug with the blockchain itself. However, sample code on ethereum.org had vulnerabilities similar to TheDAO's bug, so arguably it was a platform issue on Ethereum as well.

I think the main difference here was that bitcoin never had a "code is law" belief, whereas ethereum did.

Propose another large Bitcoin rollback and see how the community reacts. The idea that the longest chain always wins has been a core value in Bitcoin since its inception; the manual rollback was a complete violation of that.

It was also necessary for success, but the Bitcoin community has little grounds for moral superiority here.

I'm pretty sure that rollbacks to fix bugs in the chain itself would still be ok today.

Some rebuttal:

1) There wasn't a rollback of the blockchain - the method to fix this was an irregular state change (I.e - at block z, change balance at address x to address y). This was only possible because the nature of the attack left all of the compromised funds locked in place for 30 days. Arguably, if it required a rollback of the blockchain, people probably wouldn't have gone along with it. (Though node operators and miners may still have as evidenced by the bitcoin supply bug and rollback in 2010)

2) The funds in the DAO at the time were roughly 14% of the total supply at the time. This is ~1.5x the amount of ether currently custodied by the largest ether custodians today.

3) The common argument of this event being a slippery slope and that it would lead to frequent recovery of hacked funds has turned out to be false.

4) Since the state change was introduced as a software upgrade, node operators (mining pools & infrastructure providers) all had to opt into the change - which a large majority did. This would indicate that most organizations and individuals were either in favor of this solution or were apathetic to the solution

I'll preface the following by saying I fundamentally disagreed with rolling back the DAO as the entire purpose of these networks is immutability and their trustless nature.

The reasons for it, even on their own, all make a lot of sense:

- Ethereum has always wanted to move to Proof of Stake, a move that would have been impossible if 25% of the networks funds were suddenly in the hands of a nefarious actor.

- The DAO was intended to seed development into projects that would benefit ethereum and the blockchain space as a whole. It was an incredible amount of capital that was all intended to help evolve the network. Losing all this capital and momentum would have been detrimental to that goal.

- The DAO was arguably an unlicensed security and losing the funds of that many investors would have been a problem for many who had a hand in building it. By returning investments, they basically made this a non-issue.

So again, do I agree with the choice? Absolutely not, you should not proclaim "code is law!" until it's inconvenient for you. Did they have a choice? No, the roll-back was inevitable as soon as the DAO contract was deployed.

In the end, this is software used to reach consensus in a distributed manner. I don't see it much differently than any other hard fork; the stakeholders reached consensus.

not just DAO rollback, they're basically changing every key protocol rule at whim. most of their nodes run on aws. I was interested earlier but now i'm big skeptic of Ethereum quite centralized IMO

Ethereum removed the 100M soft cap on EIP 669.

This was quietly slipped through with no debate. ETH shouldn't be trusted.

Can you provide evidence of no debate, and reasons on why the soft cap is a bad idea when transactions burn eth anyways and the eth inflation rate is around 4% per year, and slated to drop to 0.5%-2.0% with the transition to ETH 2.0?

typical monetary policy issue, if it is easy to change - they will keep changing

EIP669 was a difficulty bomb delay. The difficulty bomb was never intended to make monetary policy. The point was to keep upgrades from failing to deploy due to node operator complacency. The difficulty bomb forces them to upgrade their code in some way, either to the upgraded version, or to the same old version with a bomb delay.

Issuance right now is 2 ETH/block. The white paper just promised 5 ETH/block forever.

https://ethereum.org/en/whitepaper/

Inflation is good for currencies / anything that's meant to be used.

One exception to this that pops to mind is computers, which have gradually gotten cheaper. Even though you always get a better one if you wait, it hasn't deterred consumers.

That's not a exception; in fact it's probably the most blatant supporting evidence available for "Inflation is good for [...] anything that's meant to be used.". Computers have been undergoing borderline hyperinflation (factor of two every year-and-a-half or so) for decades, and this is extremely good for anyone who wants to use a computer.

You got it the wrong way round. Deflation means when prices are dropping. The price of computers has fallen over time predictably and exponentially, and yet that hasn't stopped people from buying them. The Keynesian argument against deflation is that it disincentivizes people from spending money as they expect prices to drop. This disincentive hasn't prevented the computer industry from being a huge success. The fact that you know that if you wait some time you can get a faster and cheaper computer doesn't prevent you ad infinitum from buying computers.

Kinda unintuitive, but if you look at processing power as a currency, it is actually undergoing hyperinflation (number of computers + processing power increases every year). Meaning you buy a computer, assuming its value will drop (due to the inflationary nature).

> if you look at processing power as a currency, it is actually undergoing hyperinflation

So in relation (for this particular scenario) the USD is undergoing hyperdeflation..?

Whatever you call it the psychological effect with computers is the same as with a rising bitcoin price - you get more bang for the buck the longer you hold off on your purchase.

> So in relation (for this particular scenario) the USD is undergoing hyperdeflation..?

Relative to computers/processing power, yes, although you generally wouldn't describe it that way, since USD is (comparatively) stable with respect most other stores of value - it's computers that are changing in value, so it's computers that should be described as undergoing inflation.

Relative to (the relevant average of) other stores of value, dollars are undergoing inflation, just more slowly than computers.

Except processing power is not a currency, so it's the opposite way round...

If you're looking at USD as the base asset, computers are undergoing inflation, not deflation. Both USD and computers are inflating in supply, but computers are inflating faster (in terms of processing power at least)- hence the continuous drop in price. You could argue USD is deflating in comparison to computers, but computers are not deflating in comparison to USD.

Edit for a bit more clarity: Inflation / Deflation is relative to a "base asset" which is considered unchanged in value. For USD this is normally a standard basket of assets (foreign currencies or a "market basket").

> Meaning you buy a computer, assuming its value will drop (due to the inflationary nature).

Exactly. Similarly, if you buy a dollar, its value will drop (though not as quickly).

OTOH, bitcoins are the opposite of both dollars and computers: bitcoins are deflationary, and rise in value. This is a terrible property for a currency, since it encourages speculation and hording in preference to circulation.