As a multi-million theft changed the future of Ethereum

Imagine that a thief broke investment Fund and stole millions of dollars. What would you do if you had a magic button that allows you to "undo" the theft and return the money? You would use this opportunity or not? It would seem that the answer is obvious, but it is not. This is precisely the dilemma recently faced the creators of Ethereum — innovative platform for smart contracts.

The Ethereum project was founded in 2015 by a canadian of Russian origin, Vitaly Butterini and currently ranks second in the list of currencies with the largest capitalization after Bitcoin.

However, a few weeks ago disaster struck — the unknown hacker managed to steal the air in the amount of $ 64 million. Hot on the heels Buterin decided to return the entire system to its previous state — in fact, go back in time to return to investors the stolen money. This led to the so-called fork, causing the Ethereum divided into two systems. Obviously, Buterin thought that users will agree to return to the previous state, but a small group opposed this decision and continued to use the old system, which was called Ethereum Classic. Needless to say, this confused many investors and made the future of Ethereum is much more vague.

Smart contracts
Of course, the most famous cryptocurrency is Bitcoin, but in fact there are already several hundred decentralized payment system with its own digital tokens. At the heart of each such system is the blockchain — a database that records transactions performed by users of specific cryptocurrency.

Bitcoin is allowed to get rid of paper money and the Central Bank, but for more complex transactions, such as regular mortgage payments, it still requires the assistance of a lawyer or any third party. It is assumed that Ethereum and it will make unnecessary by using so-called smart contracts are programs that are automatically coded actions upon the occurrence of predetermined conditions.

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Buterin heads the group that founded the project Ethereum in 2015.

"For example, a smart contract could automatically transfer the right of ownership to the user who made the highest bid at the auction, or to transfer a certain amount from father to son in his birthday," explains Rob Price Rob Price) from Business Insider.

Like Bitcoin, Ethereum, over time, moved beyond online forums and small start-UPS — interested giants such as Microsoft and Deloitte.

"Project based dropouts student from Toronto, was able to attract hundreds of developers from around the world and has become a platform worth more than a billion dollars", — said in this regard, Alex Tapscott (Tapscott, Alex), one of the authors of the book "the Blockchain revolution: how technology behind Bitcoin, change, money, business and the world".

Breaking and fork
However, after one and a half years of successful development of the Ethereum got into an unpleasant turn. In April, a group of developers created a so-called decentralized Autonomous organization (DAO) — in fact, venture investment Fund. It was assumed that the members of TAO will live to invest in promising projects. The DAO has attracted more than $ 160 million on the air from 11 million investors, becoming the largest crowdfunding project in history.

On 17 June, before anyone was able to spend at least 1 ether from the funds of The DAO, an unknown hacker used a vulnerability in its code and brought her 3.6 million ETH. The rate of air immediately fell from 27.6 to $ 18, and subsequently even lower. The total value of the stolen airtime was variously estimated from 64 to 101 million dollars.

The creators of Ethereum is not responsible for The DAO, but since the stolen amount was 15% of the ether, decided to block the stolen funds in the "DAO child", so a thief could not use them. Buterin with his assistants performed a hard fork of the blockchain, returning the system to the state that it was in the day before creating The DAO, and bringing back the stolen aether to the original owners. In fact, the community declared stolen by the ether void.

All operations with The DAO was facing," said CBC News, Anthony di Iorio (Anthony Di Iorio), one of the founders of Ethereum and CEO of blockchain, the company Decentral. "The contract was changed so that people could get their investment back."

Ethereum Classic
The hard fork was made on July 20, but some users took it as censorship. Instead of trying to come to terms with a fork, a small but vocal minority continued to use the old blockchain.

"They do 'code is law," said di Iorio. "They believe that smart contracts must be unchanged even if the purpose changes the code to return the millions stolen by the ether rightful owners."

Tapscott calls this rejection of interventions of any kind — even proposed by the creators of the platform was "very naive."

"They confuse the Board of control, and authoritarianism," he said. — "A global resources don't belong to anyone and are not controlled by anyone, but nevertheless, require complex control structures, for example, the Internet."

Can Ethereum and Ethereum Classic to coexist peacefully?
Tapscott believes that the presence of two Ethereum blockchains "causing confusion about which one is 'real', which has a bad effect on the morale of investors and developers".

"'The more, the more interesting' — this is the normal position for the ideologues and traders, but for people who really want to develop and use smart contracts, blockchain, two create unwanted confusion," he told the website Coindesk investor Elioseff Jacob (Jacob Eliosoff). In another article he stated that, if the current fragmentation continues, "the technology that we love so much, will never become a mass". It seems that many users agree with him: so, last week course Ethereum Classic fell more than 23%.

In General, the debate about the fork Ethereum reminiscent of heated debates that stirred the bitcoin community a few months ago, when some developers proposed to increase the block size to enable the system to process more transactions.

And yet what a fate neither would have suffered the Ethereum, Bitcoin or any other cryptocurrency, Tapscott believes that cryptocurrency and blockchain technologies excellent prospects:

"Ethereum is only a small part of the blockchain-a world that is rapidly coming at us from all sides."