RE: The Legal Basis of Cryptocurrency Forks

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RE: The Legal Basis of Cryptocurrency Forks

blocktrades in #cryptocurrency • 5 years ago (edited)

Hi Glen, I'm trying to answer that particular legal issue in this section of the post: "But what about property rights and harm to property holders from a fork?"

As a specific issue, it has happened on Steem before. Steemit Inc create a fork (I think someone said recently it was HF9) that changed balances on accounts (actually on further reflection, I think they changed the keys on those accounts to keys owned by Steemit itself), after someone obtained the keys of many users due to a bug on the steemit.com web site and began moving the funds of those accounts to their own accounts.

5 years ago in #cryptocurrency by blocktrades

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glenalbrethsen 5 years ago

I read through that and did so again now. What I get from the section is, if an account is forked out, they can go ahead and try to run a version of the blockchain where they're not.

re: HF9

I hadn't heard about that. There seemed to be a reluctance to do anything like that, even to obviously bad actors, in the time I've been here, other than starting to pull whatever initial delegation from the Steem account.

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blocktrades 5 years ago

What I get from the section is, if an account is forked out, they can go ahead and try to run a version of the blockchain where they're not.

That is one of the key points of the section.

But the other point is even more significant: even if they didn't have the recourse to run a copy of the software where their stake is still there, they still would have no legal recourse, because the node operator ran the software on a completely voluntary basis and has no contractual obligations to run any particular form of the software (or even to continue running any form of the software). This isn't destruction of property in the traditional sense, because the "property" in this case was just a free benefit/service offered by the software operator (plus the other people who run computer nodes of the software).

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bashadow 5 years ago

Thanks for the post and commentary back and forth with Glen. It has help me understand a little bit more.

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glenalbrethsen 5 years ago

Okay.

I'm not sure if this makes me feel any better. :) On the one hand, I guess knowing that Justin Sun can't necessarily win a lawsuit against STEEM et al for minimizing the Steemit stake is good to know, since it in essence eliminates one tack he could take that would no doubt be devastating to the blockchain if he could win.

On the other hand, from the account owner standpoint, it's kind of terrifying to know that such a thing is possible without any recourse. Whether the likelihood of it happening is high, low, or in between. I wish I had known this over two years ago. I would have made a more informed decision when I joined STEEM. :)

Thank you for all the answers. I appreciate you writing this post and taking the time to respond.

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blocktrades 5 years ago

Hi Glen, I put a Q/A section at the end of my new post, the last one trying to address your concern about the potential for destruction of your coins in a fork. There's no complete comfort in the answer, but maybe you'll find some.

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glenalbrethsen 5 years ago

Hey, @blocktrades.

Thanks for doing that. I have read through it. From a purely technical standpoint, I get the dynamics and mechanics of it. The problem is, as you mention in the post, there's human beings involved, with all of their myriad of emotions, principles, experiences and vested interests.

So, knowing it can occur (however unlikely it may be for most of us), is better than not knowing, as I guess I did up until now. Or rather, I knew it was allowed by code. I guess it was the social contract idea, which seems to be tossed around quite a bit right now for other things, that I felt would keep such a thing in check.

Obviously, it has its limits, and for many here, that limit has been met, temporarily or otherwise.

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darrenfj 5 years ago

Love this point...

What's both great and terrifying is the very nature of a decentralized digital idea of value.. You are safe if enough people agree you are safe. And you are not if enough people think you are not..

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blocktrades 5 years ago

One interesting thing that may not be obvious, is that this is actually true of regular "fiat currencies" like dollars and euros. If people lose faith in those, the same loss of value can occur. You can see this today in countries that have hyperinflation, where the residents begin to use currencies from other countries as a medium of exchange in preference to their country's currency. Essentially fleeing their native currency for a fork that is perceived to be safer.

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darrenfj 5 years ago

I was going to say something similar, tbh.. the only difference being whatever government exists might back the currency.. rather than code.. but then they can't really control inflation..

but then, a Government is often only as valid as the faith the people put into it..

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blocktrades 5 years ago

Yes, and I'll cover that reluctance based on socio-economic reasons in a separate post, probably published tomorrow. Of course, some people are reluctant/scared simply from a legal perspective, so that's all I wanted to address in this post.

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