Ethereum Inventor: We Got ‘Very Lucky’ In Gamble to Save $56M From Hacker
Ethereum just survived a controversial hard fork.
Image: Flickr/Ralph Hockens
Ethereum, a virtual currency and coding platform, passed one of the most important and potentially dangerous milestones for any piece of software on Wednesday: A hard fork in its code that effectively created two different versions of the currency.
The fork was made to erase a glitch that enabled an anonymous hacker to drain millions of dollars worth of the platform's currency, ether, from a crowdsourced investment fund built on top of Ethereum called the DAO—or the Distributed Autonomous Organization. The idea is also to refund the money that was stolen from the DAO and its contributing members.
The hard fork created two blockchains—the ever-growing record of every Ethereum transaction and the basis for any code on the platform—one with the old code, and one running on the new. Ether deposits and withdrawals on popular platforms such as Poloniex and Kraken were suspended until the Ethereum community definitevely moved over to the new chain by updating their software.
"This event absolutely does not signify that every single future incident on the Ethereum blockchain will be grounds for yet another fork"
Vitalik Buterin, the creator of Ethereum, told Motherboard in an email that there was "a single unambiguous winning chain" with over 80 percent of the community moving over.
"I am happy that the community was able to come together so smoothly to implement this," Buterin wrote. "That said, in my mind, this event absolutely does not signify that every single future incident on the Ethereum blockchain will be grounds for yet another fork."
Ethereum got "very lucky" this time, Buterin wrote, and another hard fork may not be as easy to implement if the platform grows and more stakeholders—as well as their money—join the community. In contrast, the bitcoin community has been arguing about whether or not to fork their software for more than a year, with absolutely nothing to show for it.
The move didn't pass without controversy. Some users expressed that they planned to resist the fork by not updating their software—the point of contention being that a hard fork to return funds would compromise the idea of a blockchain's permanence and unchangeability.
Still, the successful fork was seen as a victory for Ethereum by some observers, since it's a process that can only be completed if the entire community works together to first approve of the terms, and then actually move over to the new version of the software.
Adding to the pressure was the fact that hard-coded limitations made it so that the community had roughly a month to decide what to do after the hack in June.
But a successful fork doesn't mean that Ethereum's woes are finished. Hacker and Cornell University researcher Emin Gün Sirer noted in a blog on Tuesday that the hard fork's new code depends on trusting the old DAO, except for the one glitch that supposedly allowed the hacker to steal the millions. If the rot is deeper than initially thought, this could spell trouble for Ethereum. A second hard fork may not be as palatable to the community.
Some virtual currency exchanges are set to begin processing deposits and withdrawals of ether later today, however, and the value of ether is slowly climbing.
For now, at least, it seems like Ethereum has survived its first trial by fire.