RE: Smart Contracts in a Free Society
This means we need to be very explicit that there is no legal recourse to losses as a result of bugs in smart contracts.
Contracts as presented by the DAO are partnerships, where all participants in this partnership are bound by not taking actions that will harm the contract or any other participant in the contract. When the hacker used the bug, he actually had to become a participant in this contract first, to be able to use the hack. When you are a partner all actions you take as a partner will have to be considered, and draining the funds was an action that caused harm to other partners. Taking action to reverse this harm should be based on that fact alone, especially if the action can undo the harm done. A decision has to be made one way or another even if we are to follow the law of common sense alone. Was the DAO explicit about losses from bugs?
This means that communities must develop alternative systems to ensure that intent is judged fairly and that bugs don't result in disputes that eventually yield jurisdiction to governments.
I agree, but while we are on that learning curve, why not consider the legal precedents that took years to develop as a starting point. Do we need to create a law of the machine, meanwhile all is open for anyone to pass his own moral judgment of what it right and what is wrong . We all agree we do not want to yield back our decisions to a faulty legal system, or better yet yield jurisdiction to governments. But are we to strike down every aspect of the legal system, where a bug becomes a feature, and theft becomes a stroke of genius.
Actually, the attacker has a very strong case and is likely to win in a court of law, as stated in the opening sentence of "his" letter:
I have carefully examined the code of The DAO and decided to participate after finding the feature where splitting is rewarded with additional ether.
Especially when we consider the crucial sentence from the DAO's terms & conditions:
The DAO’s code controls and sets forth all terms of The DAO Creation.
Yes, it was very explicit:
The DAO concept is both experimental in nature and unproven. There is a risk that, as an open source project, any contributor to The DAO’s software could introduce weaknesses or bugs into the DAO software, causing the loss of DAO tokens or ETH in one or more or even all of the DAO Token Holder’s accounts.
It's not likely to win in court because the attacker can never expose themselves without taking risks. And the court is not likely to side with the attacker. In any case if the attacker were to bring it to court the community might view the attacker as some kind of government plant to bring down all of crypto including Bitcoin and Bitshares.
The whole point of decentralized governance on the blockchain is to be self governing. Self governing requires taking responsibility when things go wrong. If there is a hard fork because something went wrong and the developers of the smart contract say it's a bug, then the exploiter has no legal leg to stand on anymore. It's only if we find that the developers of the smart contract say it's a hidden feature that there might be some chance but even then I highly doubt anyone would win because it would be in court in all jurisdictions where some would win and some would lose and no one would know what would happen.
It would be bad for everyone.