Barry Silbert Sparks Controversy with Launch of Ethereum (ETC) Trust

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Barry Silbert, Founder and CEO of the Digital Currency Group, the parent company of Grayscale Investments and Genesis Trading, has caused outrage in the Ethereum community following the launch of a new product, Ethereum (ETC) Investment Trust, abbreviated to EIT, comparable to the Bitcoin Investment Trust (BIT).

The new unregulated product uses the twitter handle of EthereumTrust, clearly implying that their service relates to Ethereum, rather than EthereumClassic. A description that is considered by many to be somewhat deceptive with some describing it as outright fraudulent.

Barry Silbert Retweeting the Seemingly Deceptively Named EthereumTrust

Calls are now reaching fever pitch for the Ethereum Foundation to step in and enforce the trademark which has the specific function of preventing others from pretending to be what they are not.

Joseph Lubin, founder of Consensys, an ethereum incubator, publicly stated yesterday that the foundation must protect the trademark. Even Charles Hoskinson, an ETC developer, stated that a request should be sent to the fund to change its name.

However, the news was met with jubilation in the wider ETC community with no one publicly raising any complain regarding the name in the announcement thread. Elaine Ou, another ETC developer, without commenting on the name itself, stated the establishment of the trust was a good thing:

“[T]his means Silbert won’t be dumping his stash of ETC on the open market, which is always a possibility right now. The fact that it’s locked up in a trust should be a good thing for ETC.”

What’s in a Name?

Sometimes, everything. When you read the New York Times you make a number of assumptions. If instead, you are reading a fake article which convincingly states Russia is mobilizing ready for war in the New York Time, you would probably say you have been deceived by any common sense meaning of that word.

To further illustrate, a customer expects certain quality from an Apple Computer. One which outwardly looks exactly the same, but inwardly is utterly rotten, yet charges the same price, would meet the definition of theft, on a common-sense basis in any event, and accordingly court punishment.

But would the same apply regarding digital currencies and, more importantly, should the same apply?

Whose Name?

Although the law is often mired in technicalities and irrelevances with thick books of case laws and statues, judges, the better ones in any event, usually try to answer one question: what does the reasonable man down the street think is just or right under these specific facts?

The specific facts, in this case, are roughly as follows. Vitalik Buterin had a great idea around 2013. Instead of limiting the blockchain technology to just money transfers, he believed it can be extended through smart contracts to fully programmable money in a fairly accessible javascript like new language which allows one in effect to create a world computer where codable monetary applications can be run.

He was able to successfully execute this idea, forming a team which greatly helped and contributed, as well as creating an entire new ecosystem that gave birth to its most famous application so far, the Slockit DAO. An application which, unfortunately, was spectacularly hacked.

After much debate and consultation over two months, including a vote of token holders that lasted for weeks and ended at around 80% in favor of forking the network to take advantage of its digital nature and thus prevent the theft, as well as with the support of some 80% of miners in a pre-fork vote, ethereum undertook a community wide decision to upgrade the network so as to prevent the theft.

A tiny minority, around 10 to 20 percent, some of whom then changed their mind, were against the decision and formed a new currency they called Ethereum Classic. Some who were never part of ethereum’s community, and, according to public commentary, actually hated ethereum, such as Barry Silbert, supported the new currency. Charles Hoskinson, an ETC developer, apparently left ethereum and its community some years ago. Elaine Ou’s involvement prior to the hardfork is not clear.

Although some longstanding ethereum developers and developers of applications that run on ethereum did publicly and fairly strongly disagree with the fork, they unanimously supported Ethereum once the community wide decision was made.

Should ETC Use the Ethereum Name in the Circumstances?

The name ethereum classic is sufficiently distinguishable for most reasonable investors as the added classic would alert them just as apple classic would make it sound like a cheap clone and thus alert a potential buyer. On the other hand, Ethereum (ETC) is far more subtle, requiring some intellect to wonder why it contains an ETC bracket. In both cases, an average user might be easily misled, especially if a seemingly prominent figure verbally tells them its actually ethereum. Stating Ethereum while one means ETC is of course very much misleading.

That’s in this specific case. In other circumstances, who exactly retains the clean brand name may not be as obvious due to the decentralized nature of the currency. The most reasonable view would be that, unless it was an exactly 50/50 split, the currency with the majority support which objectively can be judged by the price retains the clean name.

What of the other currency?

If we are to analyze from a rational basis, it would largely depend on the split. At 60/40, one can reasonably say they deserve to use the same brand somewhere in their name. Perhaps the same might even apply at 70/30, but at 90/10, as is the case with ethereum judging by the price, having the name of ethereum in any part of the new currency could be considered deceptive from a common-sense perspective.

More concretely, if further changes to the plans everyone abided by before the split, that are not related to the split, are made, as has been the case with ETC, then any basis for continuing to use the same brand anywhere in the name are non-existent as the new currency becomes completely different and thus should likewise compete on a fair basis rather than based on the exploitation of a brand name.

In my personal view, therefore, and in these very specific circumstances, the Ethereum Foundation should take action against any website or service provider that uses the Ethereum brand anywhere in their name to refer to anything else other than ETH. Otherwise, it opens the way for an easy exploitation of the brand to unscrupulous entities who may wish to benefit from individuals that can easily be misled into believing they are buying something which is not quite true, no differently than misleading individuals into believing they are buying an original Rolex when it is actually fake.

To further illustrate the point, I could fork Ethereum today, call it Ethereums, with a ticker of ETHS, mine it in my laptop at super low difficulty, provide it a nice background story, then handsomely profit from the work of others, and at their expense, with little effort.

That is not to say ETC is any of those things, but considering their far inferior support, to call themselves Ethereum Classic would, in my view, appear to any reasonable man down the street as being fairly unjust and exploitative of Ethereum’s brand.

They could, instead, just call themselves ETC, especially as they are clearly fundamentally changing the protocol. Such action would further end the animosity between the two communities which now continues mainly due to their use of Ethereum in their name in a manner that some may say appears deceptive under the very specific current facts.

Whether they will do so is not clear as, although there is some floating debate, there does not appear to be any serious consideration of the matter. If they do, the different ideology of the new currency might have an appeal and use, if for nothing else but for the fact that their existence enriches the entire ecosystem through diversity, as well as strengthens it like nature’s mutations strengthen our species.

Moreover, if the two currencies are clearly distinguishable they can engage in co-operative competition, but if they or their supporters continue to choose outright confrontation, then it is perhaps time ethereum mans up and responds in kind.

What do you think?

Should Ethereum Classic Use Ethereum in its Name?Poll Options are limited because JavaScript is disabled in your browser.

Disclaimer: The views expressed in the article are solely that of the author and do not represent those of, nor should they be attributed to CCN.

Image of pitchfork from Shutterstock.

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