Background

The purpose of this essay is to state the facts and correct the common misunderstandings around the Parity Multi-Sig wallet issue while proposing a better way to frame the debate.

Folks supporting a patch to the Parity contract believe users should be allowed to access their Ether while folks arguing against a patch believe users should not be allowed to access their Ether.

We are debating whether hundreds of people should be allowed to access their money.

It is incumbent on the Ethereum stakeholders to find out what is true and right. If at the end of this debate we decide that allowing folks to access their money is not the right thing to do, then everyone must live with the consequences of that decision, both past and future.

This essay is written for businesses, developers and innovators committed to furthering decentralized technologies. Thus, this essay assumes you have a basic understanding of Ethereum Recovery Proposals (ERPs), a subset of Ethereum Improvement Proposals (EIPs).

You can vote in support of EIP 999 on Etherchain.org and view EIP 999 on Github.

Facts

EIP 999 does not propose transferring any money, nor does it propose moving any funds. EIP 999 proposes restoring access to inaccessible funds.

In November a bug in Parity’s Multi-Sig contract was exploited by an anonymous user who rendered 587 wallets holding 513,774 ETH inaccessible to their owners.

Included in these 587 users who are unable to access their money is Moeda, a cooperative banking system build for developing nations, IMMLA, an international logistics service, TapTrust, an open source frame work, Musiconomi, a “small company of driven entrepreneurs fighting for our company, its supporters and our families”, and many, many others.

A popular, though admittedly convenient, misconception is that Parity lost Ether. This is a falsehood, used to deceive and distract. Parity didn’t lose access to any Ether, but their users and their customers did.

We are now debating whether or not these companies and individuals deserve to access their money.

The Web3 Foundation is commonly conflated with Parity because Gavin Wood helped set-up both organizations. (It should be noted that Gavin is the architect of the Ethereum’s Web3 stack, helping Vitalik move from Ethereum’s original vision of programmable money, if/then functions, to a decentralized computer and technology stack that includes Swarm and Whisper and other decentralized technologies the inaccessible Ether would fund). However:

Web3 Foundation and Parity are entirely different institutions, in different jurisdictions, with different mandates.

The Swiss Foundation’s deed (a company charter) is monitored and regulated by Swiss law and mandates that all 306,276 ETH ($184,000,000 at today’s spot price) is allocated towards researching, developing and furthering decentralized technologies. A mandate any reasonable person would agree is a worthy and indeed a noble cause.

Lazy Definitions, Cognitive Fallacies & Dogmatism

In order of weakest to strongest, below is a list of the most common arguments against EIP 999:

Ad hominem. The lowest and weakest form of argument is insult. These attacks are most commonly leveled against Parity (remember, the company that lost no money?). The attacks question Parity’s motives and bizarrely enough their competence. While nearly irrelevant to this debate, we can understand Parity’s motives by looking to their actions: Parity is the developer behind second largest Ethereum client, MyCrypto/Parity Signer, Parity Substrate, the United Nation’s Syrian Aid Program, Parity 1.10.1, LibP2P, Parity Bridge, WASM contracts and a lot more. If you hear folks questioning Parity’s motives [for supporting their users], simply remind them that if they’ve ever used Ethereum then they implicitly trust Parity’s motives :) Everyone loves a conspiracy. Occam’s razor suggests Parity wants to fix their contract. After all, 587 of their customers have > $300,000,000 sitting idle, the majority of which will, by mandate, be allocated towards furthering decentralized technologies. But that’s not sexy enough for the arm-chair conspiracy theorists who insist that the prospect of projects like Musiconomi and TapTrust accessing their own money is an implicit corruption of the protocol. Bailout. Bitcoin’s Genesis block contained the text “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” and the DAO-hack response on Ethereum moved money back into affected DAO-token holder’s wallets, so it makes sense that the term “bailout” is top of mind in crytocurrency circles. However, it holds no relevance to this debate as EIP 999 proposes no financial assistance to a failing institution nor does it propose money changing hands. The use the term “bailout” in this context is either due to ignorance of the word’s definition or intellectual dishonesty. There exists no excuse for either. If someone retorts that a contract patch is financial assistance (moving the goal posts), then they should look up that definition, too. Slippery Slope Fallacy. “The slippery slope fallacy works by moving from a seemingly benign premise or starting point and working through a number of small steps to an improbable extreme.” In the context of this debate this sounds like this: “If we let these projects access their money we will soon be reversing state everyday!” or “If we fix this bug, we will soon have to fix all other bugs, too!” Gasp! At this point ask what terrible next thing does allowing users to access their funds lead to, exactly? Not Systemic = Don’t Fix it. This backwards logic says that only at an indeterminate point of “systemic importance” is something worthy of fixing. This line of thinking is akin to the “too big to fail” policies of large banks and corporations and has no place in debates about decentralized systems (reference Martin Köppelmann’s Twitter poll). Incentives for > Incentives against. Folks claim that there is no incentive to be against EIP 999 while there is an incentive for the 587 users to support it. This is not reality. Because of the way the debate has been framed to this point and the lazy use of words like immutability, bailout, cronyism, “the community” (use of quotes explained later) on /r/Ethereum, Twitter and other forums where informal governance occurs, have turned righteously indignant at the prospect of folks like Musiconomi and TapTrust being allowed to access their money. Anyone who sticks their neck out in favor of EIP 999 runs the risk of being heckled and shamed by a hoard of angry /r/Ethereum Redditors and Twitter know-nothings. The fear of the seemingly unknown, as well as the vivid picture of a bailout and cronyism painted by armchair conspiracy theorists, creates social conditions that reward virtue signaling in the form of Upvotes and Likes at the expense of decentralization and progress. Immutability. This word has been debased to the point that it’s nearly impossible to know what people mean when they use it. They could mean anything from “tamperproof”, to “the Ethereum protocol disallows human judgement”, to even “inaccessible Ether is the cost of doing business on the protocol — do better next time!” Ethereum Core Developer Nick Johnson says immutability describes “how things change”, it doesn’t prohibit “all change… [and it] has nothing to say about obviously bad changes like adding an opcode that gives you someone else’s money.” “Bad” Precedent. This argument suggests allowing these 587 projects and individuals to access their money would somehow set a precedent where no one would know where to draw the line. This argument’s premise is that human judgement doesn’t exist, and if it does it’s either unreliable or has no place in Ethereum. This is a false dichotomy with a touch of the slippery slope fallacy. EIP 999 proposes a patch to a contract code where the wallet owners are known parties, nothing else, future or past. Period. The Community Says “No”. Folks using this argument rely on Twitter polls, in-person discussions, and sentiment analysis of the places where informal governance takes place, e.g. /r/Ethereum. Oddly enough, the people using this argument are the same ones claiming that human judgement has no place on the Ethereum protocol (the immutability argument, #7). Obviously, they will have to concede on one of these points. At press time those in support of EIP 999 constitute the majority, in terms of absolute numbers and Ether-weighted votes.

Reframing the Debate

The debate is currently framed in terms of bailouts, cronyism and immutability, not what is in the best interest of furthering decentralized technologies. Part of this is question dependent.

If we are asking the wrong question, naturally we will arrive at an incorrect answer. The question is not “should we bailout a well-funded company because they made a mistake?”. Instead the question is:

“Should people and projects be allowed to access their funds?”

Proponents of EIP 999 should refrain from using terms like “lost Ether” or “refund” as these are incorrect words and not at all descriptive of EIP 999. Instead say “inaccessible Ether” and “gaining access”.

Proponents of EIP 999 should help users understand that there is no cost to them or anyone else to recognize and fix this contract bug. Once you’ve helped them understand that you can ask questions like “what do you have against fixing bugs” or “what bad things does enabling people to access their money lead to?”.

Proponents of EIP 999 should describe the proposal as “fixing a bug” and “allowing people to access their funds”. Help remind and correct people when they inappropriately use terms like immutability, bailout, and cronyism (remember, Musiconomi is not a nation-state and TapTrust is not a big bank).

Proponents of EIP 999 should remind people that Parity has access to all their money, and their only desire is to help the companies, people and families who lost access to their funds. Make a point of learning the names of projects who are affected by this bug so that there is a personal face associated with why we are doing this, not some monolithic entity or vested interest.

Proponents of EIP 999 need to lift up and amplify the logical, considered voices in the room that are drowned out by virtue signaling and rabble-rousers.

To this point, the loudest voices in the room have held the floor. However lacking in reason, there exists a strong incentive (Upvotes/Likes) to bash a “big” businesses like Parity to signal to the rest of the community you stand against corruption and cronyism. If one fails to understand what is being voted on or who is affected by this bug, this makes sense. However, as you peel back the layers and understand what EIP 999 proposes, this line of thinking crumbles.

It’s easy for folks to oppose otherwise benign and logical change since they have a good thing going (reference ETH price). It’s much more difficult to stand-up for what is true and right. We are a community that does the latter. No matter how difficult or contentious it may be.