This is my contribution to the currently online debate on Reddit/r/ethereum (for instance).
It seems to me that any organization (be it “physical” or virtual or blockchain-based) is founded on trust with the help of some underlying, shared meaning legal stuff.
When you get your contracts wrong in the physical world, you run the risk of clients, contractors or employees, if not bandits to abuse you. That’s the risk any organization face. Only if the law is broken, you act toward changing that law. And because contracts are so difficult to write properly, we resort to lawyers.
Ethereum‘s the law here. A contract has been badly written, TheDAO should bear with the consequences. That is has been audited before (proofed by special blockchain-law firm slock.it as it seems) just prove that the digital world is prone to errors just like the real world.
The blockchain just increase the risk of making these errors unsolvable because it wants to make code immutable.
Yet we’re not supposed change the law just because some contract has been badly written. Or have the state intervene in one contractual problem.
Do people seriously consider having a central authority (Ethereum) intervene in what’s supposed to be the best of breed of P2P technology (blockchain)?! C’mmon!
If trust (even if cryptography and blockchain-based) should continue to be the foundation of contracts, TheDAO has to solve that itself, or, as stated elsewhere, the non-digital part of the blockchain will be seriously undermined.
Hint for later (or maybe just now): make Ethereum a DAO itself where people can take share (hopefully without contractual flaws), and let the crowd run the infrastructure. It would then seems to be a hell lot of issues will appear like “can we trust shareholders to know how to vote/run such a company as Ethereum?”