Would it be possible with the SAFE network (when every vault upgrades), to make it possible to ‘undo’ a theft like the DAO hack with Ether or the theft from Finex or would this be fundamentally impossible?
It’s an interesting question that I wonder goes beyond technical.
Money only exists because there is a consensus about what has utility in communicating value.
The DAO was a major fail, rather than a minor theft; so, majority consensus I expect will rule Ethereum’s future. Useful to learn from the way that plays out then.
Obviously, any monetary system needs rigor and integrity for there to be consensus but the exception appears perhaps where the consensus is that something should be done to fix a major flaw.
Eitherway, I would expect that any money will need heritage to be adopted as de facto first choice and that would suggest that it has to move beyond a point of having options available to fix and patch any errors that should not have ever existed. That suggesting then perhaps the first wave of any money subject to an uncertainty about its rigor and the real limits on it.
By default, of course, would be great to have such integrity that no chance is possible and no fix is needed… and SAFE coinage has a good chance of that where it’s built within an environment that isn’t liable to hacking at the money directly.
Safecoins are files stored on the network. If someone forks the network, they won’t get all the files of the main network, they start from scratch. So it’s not a blockchain technology where all you need is to copy the blockchain in order to branch out.
This means you need to do it within the same network. Assuming you know the address of a Safecoin, you then need to control most of the close group handling that file in order to change its owner without the owner consent.
Then you need to do this again for every single Safefoin.
Keep in mind that getting the control of a Safe group is the biggest threat to Safe’s integrity, once the network is mature, don’t expect to be able to do this without a massive amount of resources.
Yes, point is, if everyone upgrades (consensus) would that work or wouldn’t you even know where the coins are after a few transfers; so basically impossible?
I believe a Safecoin always keeps the same address in XOR space regardless of the owner (don’t quote me on that). So you would not be able to make it vanish.
If everyone decides to upgrade to a new vault to banishes / change ownership of those Safecoins that could be done. But you need to convince a great majority of people to do it if you want this to work. I think there’s no way out of this as this is a decentralized peer-to-peer network, if all peers decides to go right, then the network goes right.
EDIT: also it’s not that simple either. The owner could simply keep on trading his Safecoin on an exchange and you would lose track of what belongs to who pretty fast.
Does raise questions about fungibility though if it works like this, much more than with bitcoins. Coins that are known to have been stolen can be blacklisted at exchanges for example.
I agree, but remember that Safecoins can be transferred outside of an exchange and they can also be consumed by the network when paying to store data. Banning a Safecoin address is pretty futile in trying to stop someone from using them and it would probably end up hurting someone completely unrelated instead.
Also, any serious exchange would need pretty solid evidence that a Safecoin as been stolen before banning it, they wouldn’t go banning Safecoins left and right simply because someone asks for it.
And this is without considering autonomous exchange that could run without human intervention.
All in all, I’m not too concerned about this.
How? My understanding is there is no mechanism for tracking further than “prior owner” and only the 32 closest nodes would know that information. Beyond that, there is no mechanism for refusing payment… If 28 of the 32 neighbors say “this coin is owned by Bob” Bob owns the coin. And really he doesn’t know one coin from another other than a very large jumbled up address…
That very large jumbled up address can be marked as ‘stolen coins’ which might pose a fungibility issue, but due to the decentralized nature of being able to exchange for other assets of which no ownership history is kept, it cannot be proven that the holder of the coin had anything to do with the theft and simply got them in exchange for something else for ‘fair’ value.
If they are marked stolen, How does anyone prevent themselves from getting paid with them?
By not accepting them? Exchanges and merchants can filter.
Becomes another story with decentralized exchange though.
A developer can correct me if I am wrong, but I don’t think it works that way.
A user doesn’t get any input into what coins he controls. The network determines the owner. Coins don’t exist outside of the network in any form. There is no “Accepting” mechanism, so the user wouldn’t be able to refuse.
Suppose that is right, but as a merchant receives a stolen coin he can opt to send it back instead of sending the merchandise.
Perhaps, but there really isn’t ample reason to keep a blacklist if nothing can be done about it, and it is very difficult to keep anyway. We keep track of our bitcoin addresses because we have to keep track of the keys to spend the money – But SAFEcoin isn’t going to work that way. It’s going to be tied to your account— It is doubtful that you would even know the address of the coins you controlled because there really wound’t be any useful purpose in knowing such – The software does it for you… It’s kinda like trying to know which RAM addresses you stored your last blog post in… You could work hard and find it, but chances are good that you don’t care.
It depends on the kind of exchange, if selling for merchandise a seller can opt to send back the coins instead of sending the merchandise.