Regulating DAOs

We think that the most useful way to understand the speech issues involved with regulating Tornado Cash and other decentralized autonomous organizations (DAOs) is through an analogy: the golem. There are many versions of the Jewish golem legend, but in most of them, a person-like clay statue comes to life after someone writes the word “truth” in Hebrew on its forehead, and eventually starts doing terrible things. The golem stops only when a rabbi erases one of those letters, turning “truth” into the Hebrew word for “death,” and the golem ceases to function.

Regulating DAOs - Schneier on Security, [no date]. Online. [Accessed 24 October 2022]. Available from: https://www.schneier.com/blog/archives/2022/10/regulating-daos.html

Posted on October 14, 2022 at 9:08 AM

[…] This disagreement highlights the awkward distinction between ordinary language and computer code. Language does not change the world, except insofar as it persuades, informs, or compels other people. Code, however, is a language where words have inherent power. Type the appropriate instructions and the computer will implement them without hesitation, second-guessing, or independence of will. They are like the words inscribed on a golem’s forehead (or the written instructions that, in some versions of the folklore, are placed in its mouth). The golem has no choice, because it is incapable of making choices. The words are code, and the golem is no different from a computer.

[…] Further complicating the matter is that individual DAOs can have very different rules. DAOs were supposed to create truly decentralized services that could never turn into a source of state power and coercion. Today, some DAOs talk a big game about decentralization, but provide power to founders and big investors like Andreessen Horowitz. Others are deliberately set up to frustrate outside control. Indeed, the creators of Tornado Cash explicitly wanted to create a golem-like entity that would be immune from law. In doing so, they were following in a long libertarian tradition.

[…] Other elements of Tornado Cash—­its website, and the GitHub repository where its source code was stored—­have been taken down. But the protocol that actually mixes cryptocurrency is still available through the Ethereum network, even if it doesn’t have a user-friendly front end. Like a golem that has been set in motion, it will just keep on going, taking in, processing, and returning cryptocurrency according to its original instructions.

[…] The question is whether the First Amendment covers golems. When your words are used not to persuade or argue, but to animate a mindless entity that will exist as long as the Ethereum blockchain exists and will carry out your final instructions no matter what, should your golem be immune from legal action?

[…] It’s a mistake to defend DAOs on the grounds that code is free speech. Some code is speech, but not all code is speech. And code can also directly affect the world. DAOs, which are in essence autonomous golems, made from code rather than clay, make this distinction especially stark. This will become even more important as robots become more capable and prevalent. Robots are even more obviously golems than DAOs are, performing actions in the physical world. Should their code enjoy a safe harbor from the law? What if robots, like DAOs, are designed to obey only their initial instructions, however unlawful­—and refuse all further updates or commands? Assuming that code is free speech and only free speech, and ignoring its functional purpose, will at best tangle the law up in knots.

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Clive Robinson • October 14, 2022 11:00 AM @ Bruce, > “There are many versions of the Jewish golem legend,” That’s not quite right it’s a Jewish “religious” story with “golem” meaning, “my light form”

Implying the essence of life from the god head. Effectively something on the journey to being a human but not yet there, essentially something unfinished.

When you look at the various stories what is essentially missing in the Golem is the sense of “Good or Bad” or societal mores and moarals. It’s “Right or Wrong” determination is based on hard rules not emotions thus uses bivalent not multivalent logic.

That is there is no “Man made God in his likness” just flow charts. There are no human rights, no merciful justice only the rules. If the rules are wrong and they almost always are, then so are the behaviours which in part are what some of the Golem stories are about. But if you take as an example the stories of one religion then you should give equal weight to another. The US is not technically a country of religion, there is supposadly clear lines between church and state, and some legislation supporting this. However if you make the mistake of believing what US politicians publically say about themselves, then the US is run by those who believe in the Judeo christian god of the many Abrahanic religions, primarily Anglo-Saxon derived Protestant Christianity based on one of the more modern bibles with it’s new and old testiments (moral stories).

When you say, > “Language does not change the world, except insofar as it persuades, informs, or compels other people.” The Bible takes a somewhat different view, most christians can quote some or all of this from Genesis, > “In the beginning, God created the heavens and the earth. The earth was without form and void, and darkness was over the face of the deep. And the Spirit of God was hovering over the face of the waters. And God said, “Let there be light,” and there was light. And God saw that the light was good. And God separated the light from the darkness. God called the light Day, and the darkness he called Night.” From which many very firmly believe in “The Word of God” and use of “language”.

Many belive from Hebrews that the word of god has very real corporeal power and the ability to control, > “For the word of God is living and powerful, and sharper than any two-edged sword, piercing even to the division of soul and spirit, and of joints and marrow, and is a discerner of the thoughts and intents of the heart.”

And strengthend from Jeremiah, > “’Is not My word like a fire?’ says the Lord, ‘And like a hammer that breaks the rock in pieces?’” I could go on and delve into hebrew beliefs about the word of god and how it controls.

One of the lessons I learned early on is that religion can be a dangerously powerfull driver of humans to do the worst of bestial behaviour through the command of a deity. These days we wrap it up in words like “cognitive bias” but in short religion is a form of brainwashing frequently applied to those to young to have any defense against it, thus it is a form of “child abuse”.

Which is why I avoid using any religious teachings for analogies, and advise most others to do the same, as refrence to “religion” and their deities will always get in the way of the message you are trying to explain. The issue by the way is not language, that is at the end of the day just a method of communicating information, that is knowledge, methods, feelings, understanding and yes instructions or rules. The actual issue is what the receiving entity of language be it spoken or written choses to do with it. That is it’s a question of the entity having sentience and free will or not. As humans we have the notion of “free will” which alows us to treat any communications in what ever way we chose. However it alows others to come up with the notion of “responsability” and as you walk down that path the determination of good or bad under the current social set of mores and morals, which constantly change. Language be it poetry or codified rules is just information. Entities that are not sentient interpret it via rules that are built in usually by a sentient entity.

Whilst DAO’s are language which both communicates and instructs, they are not intended for sentient entities but the “unquestioning obeyant systems” we call computers or even wider autonomous systems such as industrial control systems. We do not expect nor do we want sentience in such systems, we want every state to be fully defined and progression from one state to another fully defined such that the system behaviour is fully deterministic.