I think that you've become confused about the distinction between the Ethereum virtual machine and the Ethereum public blockchain.
Raiden is a project that will work on any blockchain running EVM code, not only the blockchain that has had this DAO drama. So, for example, many of the internal private blockchains in use at major banks and corporations will be able to benefit from Raiden.
There is an interesting discussion to be had about the merits of Turing-complete (EVM) vs not Turing-complete (Bitcoin script), but you have chosen to focus on some off-topic drama instead.
This doesn't really make sense to me, an example would be helpful. Also, wouldn't it be trivial for a "vetted but not trusted" party to mount a 50% attack against the private blockchain since there is very little hashing power backing up the network?
The private blockchains are generally using proof of stake protocols like Tendermint, or just classical byzantine fault tolerant protocols instead of proof of work. These protocols can be trusted if at least 2/3 of the participants can be trusted and there is no hashing involved at all.
They are generally replacing trusted third parties like clearinghouses. Instead of needing to trust (and pay for) a third party clearinghouse running a centralized db, these enterprises just need to trust that 1/3 of the participants in the consortium running the blockchain won't collude to attack the protocol. And even if there is an attack, there will be a big paper trail.
You may ask "why not just use a BFT database system with signed logs?" Well, this is what a blockchain basically is, wrapped in a package with a bunch of other stuff.
Say BOA, Citi, Goldman Sachs etc want to create a settlement network on blockchain. By using a centralized service, it would result in them trusting a third party (which they currently do) but by using the blockchain, they don't have to rely upon each other, and they all take equal responsibility.
Any entity which can mount a 50% attack in a private permissioned blockchain, would be known to all participant. Average Joe isn't mounting such an attack, because his key doesn't really have write access to the blockchain, only read access.
I was completely on board until the second paragraph. Isn't this almost exactly the argument the DAO used?
It seems like in cases where extremely large amounts of money are at risk, we still haven't developed computers that should be completely trusted with it.
I was completely on board until the second paragraph. Isn't this almost exactly the argument the DAO used?
No. The DAO attack wasn't a 50% attack - it was a bug in the contract.
It seems like in cases where extremely large amounts of money are at risk, we still haven't developed computers that should be completely trusted with it.
not sure what OPs reason is, but I agree. I am really disappointed by the Ethereum team considering the option of providing a revision in their chain's history in order to prevent a loss caused by an independent application. There is a conflict of interest since very prominent Ethereum devs have vested interests in the DAO and revising this history goes against many of the ideas that they stated Ethereum was built around.
Watching some of the talks from the first Ethereum Dev convention highlights this hypocrisy as they specifically advocate for "the code is law".
I still have a vested interest in Ethereum as an Ether holder, but the last few weeks have not really impressed me about it's communities adherence to their stated values.
Completely agree with this sentiment... I'm extremely disappointed by even the consideration of this idea by the core team. This could be a very hard but valuable lesson for both the community at large and the core team, but instead it is turning into a political drama fest in complete violation of the principles this entire idea was founded on.
I am curious - what principal(s) do you or gp think Etherium was founded on that which a hard fork decision will go against?
I think you can tell by the way I phrased the question I disagree. I own < $10 in DAO so I don't think I'm too biased here, and I believe in a pow system if you can get a majority the miners to agree than nearly any decision is justified.
I am pretty sure they are referring to "the code is law" as quoted above. That is apparently changing to "the code is law unless we think that is unfair".
I am not as worried about it in the longer term, but it's a big setback in the immediate term. Ethereum will have to convince the world that it has truly returned to "the code is law" at some point in the future.
That was either edited in or I missed it - but in either case I see it as "The code is law and the participants use a work-based consensus system to decide which code is run"
Code is not law. Code will never be law. No one is going to pay attention to records in a database that say something different from what everyone wants it to say. Despite this, blockchains are an incredibly powerful platform for social and economic software. They help people come to consensus on what those records in a database should say with very little effort, and bug-tolerant systems will be built that take advantage of this power to make trade easier without monopoly middlemen.
Not OP, but it bothers me because a hard fork means that bad investments are bailed out by all currency holders.
The reversal of opinion in parts of the ethereum community regarding bailouts is incredible. The only thing more shocking is that they appear unable to recognize it.
I don't want that in my cryptocurrency voting pool, so I'll pay less to enter it.
I still don't get how you can have any kind of verification of state if you make transfers off of the blockchain. After all, that's the whole freaking point of the blockchain: verifying the integrity of the transferred item, verifying the entire network state, and ensuring that fradulent coin cannot enter the network. But then, I suppose that's why I'm on XT's side.
As for Raiden itself, I think that the forthcoming return of the Snake network will largely bring cheer to those who dislike it, and largely overshadow it. [JOKE]
Basically, you give the counter party a transaction that they could write to the blockchain and trust that they won't because you're going to give them a better option shortly.
It's kind of like giving someone a signed check for $1 and telling them "I'll give you another check for $2 tomorrow if you don't actually cash that one." The party doesn't have to trust you for the $1 you've already given them.
...That makes forcing verification possible, but that's more like saying "I'll give you a check for one dollar that's definitely real, or you can come back tomorrow for two dollars, which might be fake." Nobody carrying out a serious financial transaction would take the ladder option.
Real world financial transfer systems are often used for net settlements. And writing the entire history of the world's transactions on a single append-only ledger that has low throughput and costly storage may not be ideal, while approaches like Lightning might allow instantaneous transactions.
Still many ifs, but if it works, there could be some interesting advantages for speed and scalability.
Lol, its almost as if Ethereum is the alpha stage test environment for Bitcoin.
It even has its own bug bounty program called "The DAO" that pays up to 150 million dollars!