Ethereum, Crisis, and Code as Law

The crisis that is currently facing the Etherum community with the upcoming hardfork to recover The DAO funds brings up the fascinating question of what is the role of those who write the code which acts as functional law in the land of cryptocurrencies? The Code may very well be The Law within these systems, but what happens when the rules of such a society starts to break down, and the very core of those laws seems to be threatened? Must the law be maintained no matter what, including the destruction of the society? I think not.

Salus Publica Suprema Lex

This latin phrase came to be one of the highest laws in the Roman Republic. It loosely translates to, “public safety is the highest law,” which includes the guiding principal that necessity does not acknowledge any law. What we uncovered here is the very real political praxis that operates within the Ethereum community, and the cryptocurrency community at large. The political action behind the code can always find itself in the most extreme scenarios, in which it must operation outside and beyond the principals of the code as it was written. We find that at the extremes of the breakdown of the code, there is always the meatspace where the intentions of those who make the code can reactivate it to what it was intended to be.

For the Ethereum community, the DAO hack was not just a challenge to the code that has been written, but to the very foundation of what is to be done. If the NSA or GCHQ had hacked The DAO, or compromised the Ethereum protocol itself, would we sit aside and proclaim, “The code is law, and there is nothing we can do,” or would we choose to fight back?

Direct Action has no code

There was no code, no digital currencies, and no method of digital economic action to resist the corrupt banking and economic machine in 2007. This did not stop Satoshi from his radical dream of create a new digital compact through code, in which we could create a new economic system which the state was banished from entering.

Flash forward 7 years and see what we have now. There is not just one, but hundreds of digital currencies all which pose some degree of threat to the contemporary economic system. Each and every one of these new forms of money is not just code–it is a protocol of direct digital political action.

There is no code for direct action. There is only the principals that guide us in the same way that there are principals that guide the functions of cryptography. Does it serve the function of public safety for what we need it (in this case, is the crypto secure) or has it been compromised? This is the same function that the direct action of a hardfork serves when it is to help preserve the integrity of the system as a whole. There is no code to ensure the system functions as it should–only the will of those who code it.

Crisis as Consensus Building

If the DAO hacker gets to take control of the amount of Ether that is on the line, there is a very real possibility of the whole system of Ethereum being compromised. The DAO hacker can control a significant % of Ether and use that to stake for much more Ether once Caspar has been implemented. More importantly, however, would be the display of callowness from the Ethereum core devs, and their willingness to let their vision be compromised, all because they see the code as the highest law, and not their ability to affect it.

At this point we can choose to move forward with the code as it has acted, or we can usurp the unintended action of the code in the name of the safety of the system. The Law of the code is not what is written, but what is intended by those who operate it and give it real power.

The Ethereum hardfork that will happen tomorrow is simply the reactivation of the code as it was suppose to be. I support these actions because they show the strength, courage, and tenacity that the Ethereum core devs have. They will see their vision of an open financial system birthed into the world, and it is because of their own willingness to demand that. They are allies in our quest to free the world of statist fiat money, and this is just the first of many test of what shall be done when we are face-to-face with what can either destroy us, or make us stronger.

Facing such crises together and choosing to lead us through these times of crisis is what shall allow for us to change the world! The code is not law, but what we choose to support and manifest is!

Here is my salute to the Ethereum core devs! Keep pushing forward the code that will help us change the world, and know that you are supported in your efforts!

Ethereum as Finance, Bitcoin as Money


As I pointed out in the start of the essay The Revolution of Bitcoin Banking, we are still in the 11th century of online exchange with bitcoin. Today we are slinging around digital coins online with very real value; which has no difference from paying for any goods or services with gold or cash. While this does not seem to be an issue at this time, we need to remember that we live in a modern society where such basic transactions hit their limits quite quickly. What we need are complex forms of contracts that can create debt, insurance, and other forms of contracts. In other words, we need real finance and not just money.

While I don’t believe that bitcoin will ever fade as a storage of value, it does seem to be a strong payments system. While the ‘is bitcoin a payment or storage of value system’ debate has been going on from the start of bitcoin, it has more recently picked up steam with the blocksize debate. Regardless if bitcoin does increase the blocksize or not, it may not matter very soon, and that is because of another star we are seeing rising to take bitcoin’s place not as a money system, but as a finance system: Ethereum


Vitalik Buterin

Vitalik Buterin

Ethereum was developed by Vitalik Buterin in late 2013. It was not developed as an altcoin, but rather as a full contracts platform to be able to work as a layer on top of bitcoin, or any other digital currency for that matter. To steal a remark I saw on /r/Ethereum, bitcoin is to digital gold as ethereum is to digital oil. Ethereum purpose isn’t to be a deflationary money like bitcoin, but a contract platform and the engine of digital finance.

Perhaps this will finally answer the question; is bitcoin a storage of value or a payment system? It seems as though it can work as the later, but it is better as the former. Whereas Ethereum was built specifically to create contacts and has a higher inflation rate to account for the more robust use of Ethereum. What bitcoin is to hard money, Ethereum is to finance.

Ethereum enables the bitcoin bank that I speak of in The Revolution of Bitcoin Banking. What this can realistically do is create a robust full banking and finance platform that is completed decentralized and non-state based. This is how the internet not only gets its own money, but its own banking system, economy, and the tools for digital natives to secede from our current economies to new digital ones.

Finance 2.0

Ethereum is the ubermensch of bitcoin. It not only wants to be everything that bitcoin is, but it goes over and beyond bitcoin to create something larger, something beyond it. Bitcoin has masqueraded as a payment system for long enough, and now it can come to do that which it was made for: to become the storage of value for the modern technological world, and to create the base value for the future digital economies that will come to govern the world.