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Should Ethereum fork or ingore the DAO attack?

DAO was hacked and 3.53 million of Ethereum was lost on June 17, 2016 due to a bug in the written contract codes, based on the report from blog.ethereum.org. It is known that DAO collected 8.26 million of ETH from its ICO, which takes up to 10% of total Ether supply. DAO is based on Ether’s platform and writing its contracts to operate itself as its name indicates trying to create Decentralized Autonomous Organization. Now it is the backbone of Ether’s ecosystem.

Ether and DAO’s price were crashed after the attack was spread out. DAO lost 42.7% of ICO funded ETH and will be probably dead. People lost the faith into Ethereum’s platform and dump it although Ethereum’s main chain is still working smoothly. Even Vitalik Buterin were panic and pleaded with the exchanges to freeze the exchanges of DAO and Ether, stop processing deposits and withdrawal until further notice. The two dominating exchanges Kraken and Poloniex took the actions as Vitalik suggested.

ether price crashing

This hack is really hard blow to Ethereum’s reputation. The good news is that we still have 27 days to act against it before the hacked ETH becomes spendable by hackers. We still have some time to think out a good solution to fix it.

This leads to a hot debate what we should do. There are too solutions on the table at the moment.
First, we do nothing. This transferring (lost of ETH) is just performing the DAO’s contract code, nothing got compromised or hacked in fact. Because it is the issue of the DAO’s contract’s code that leads to the loss of Ether. There is nothing wrong with Ethereum’s platform. The consequence is that hackers will dump the hacked money on the market and crash the price. It will be a disaster and the investors will have to take the loss. DAO will probably be doomed. Ethereum’s reputation will be completely ruined and will be very hard to recover to the level of prior attack. Business owners or corporate will be cautious to trust the Ethereum’s system and write contracts to attach with any amount of money.

The second option is to software fork the Ethereum’s blockchain and roll back the transaction
of the hack as proposed by the founder of Ethereum, Vitalik. All of the other records on the blockchain won’t be affected. But it requires the consensus of the miners and mining pools. If the proposal is approved, software fork occurs, it will dramatically affect the reputation of Ethereum as the concept of decentralized platform. It sets a very dangerous precedent that whenever money was stolen from a smart contract,we could easily roll back it and get back the money. So what is the meaning of decentralized platform? The Ether community face this dilemma.

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