Ethereum Must Fork Again - Is this the End for ETH?
From Bad To Worse
The Ethereum cryptocurrency recently underwent a hard fork to return funds from a hacked application/smart contract called the DAO. See my previous posts for more info - here, here and here.
It seem the hard forked version of the currency (ETH) and the ethereum foundation who implemented it just can't get a break these days.
The community has been surprised by the unexpected success of the continuation of the original blockchain known as ethereum classic (ETC). It is continuing to gain support with more and more exchanges adding it, including most recently Shapeshift.io and the largest bitcoin exchange, Kraken. It has consistently outperformed ETH (the hard fork version of ethereum) at times having double the volume.
The Replay Attack Problem
Unfortunately since this was unprecedented and the ethereum foundation expected the original chain to die - they did not code any protective measures into the new fork to prevent "replay attacks".
(See this article by Timon Rapp on Medium for an explanation of what replay attacks are.)
The TLDR is that ether on either chain can literally disappear due to such attacks. This necessitates one of the chains being forced to do another hard fork.
It is already clear that the ETC community will not accept such a fork under any circumstances.
Catch-22 but not the novel
This leaves the ethereum foundation and ETH in a catch-22 situation. By doing nothing the chain remains open to these sorts of attacks which reduces it's viability. As the larger chain they must act to prevent losses but if they perform another hard fork so soon after the last they could cause a catastrophic loss in value and confidence in ETH.
Forked for Good?
Whatever they do it seems they (the foundation/ETH) will lose. Could this be the final nail in the coffin for ETH?
It just seems this whole saga gets stranger by the day. What do you think will happen? Is there a workable solution that doesn't kill either chain?
Please have your say in the comments below.
This is completely wrong and misleading. Its ETC that has to fork if they want their chain to be safe from replay attacks. ETH doesn't have to do anything. Their have been some ETH supporters who have encouraged ETC that they need to be aware that ETC holders and ecosystem participants are at risk of sophisticated attacks and that it will be hard for people who lack technical sophistication and a great deal of caution to perform transactions on ETC that do not suffer from these risks.
To be clear, replay attacks are ONLY an issue for people using the ETC chain and for the ledger that exists on the ETC chain. Here is the security researcher who uncovered TheDAO's security flaw saying: Do Not Mess With ETH Classic, It Will F You Up . This is an ETC issue, they can fix it or not. We'll see what they do.
Not upvoting because your article confuses the issue and is full of inaccuracies.
I'm sorry you feel that way. I am just reflecting current opinion and discussion. It is up to you what you up-vote and I wouldn't want you to up-vote something you didn't like that would be wrong.
There is much confusion over this so though I would disagree with you on your reasoning you may ultimately be right that it is more of a problem for ETC. Unfortunately the way that the chains divided means large ETH holders are also potentially large ETC holders.
I doubt they would be happy if their ETC just disappeared whether you consider it free money or not.
If it happens who gets the blame and who potentially ends up getting sued? Most likely it will be the ethereum foundation because those who support ETC will blame them creating the split in the first place. Since they have already pushed the argument that hard forks are fine they have painted themselves into a corner. Vitalik's attempts to sit on the fence and be agnostic have not helped.
I'd be interested to know the other "inaccuracies" though. I get the feeling that you are pro HF. That's fine but not everybody is. Without the HF this issue would not exist.
Crazy stuff. There is so much drama around the situation. If both chains survive I think one of them should rebrand so there isn't so much confusion on what is what.
@eeks Slept on it and have realised I probably did get it backwards - ETC is the one that will have to fork because of the way ETC is being credited to ETH holders on exchanges (not the other way round). Sods law - I can't correct it now!
Anyway if magically the ETC people reverse their stance and do HF we could end up with 3 different chains as some people will inevitably resist that HF too. The possibilities just get more and more crazy.
This stuff is making my head explode now!
As a libertarian and advocate of decentralisation, ETC all the way :)
ETH stuck their finger in their own meat grinder when only 3% of the community actually voted either way.
ETH should have just bitten the bullet the first time. The hard fork went against the core principles of ETH and now its sad to see it happening again. I hope ETC stays and grows.
I can sympathise though they were stuck in a really difficult situation and I think personal involvement affected their judgement.
I can certainly sympathise. I was very uncomfortable about the hard fork.
I'm so glad the tag I created is working as intended, so I don't have to go digging for amazing updates like this
What tag is that?
#craigrant
It makes sense that there would be more trade volume in etc. It was basically free money and people want to capitalize. It's trading at .11 eth/etc last time I checked. That means everyone's ether hold would increase by 10% if they trade it back into eth. I can see people wanting to hold tight with their normal ether and fool around with this additional stuff until the market stabilizes.
Will the market ever stabilize is the question?
I hope not haha. This is fun! I'm having fun! But doesn't it have to? Even if it stabilizes at 0.
One would assume it would stabilise eventually.
Unfortunately it is not that simple. We have seen the dramatic consequences of this HF. Another one will be catastrophic PR.
To me this situation is a great opportunity. It'll bring attention and volatility, which together often provide paths for profit. There is a chance they bring each other down, but for anybody too scared at the state of ether they at least got a little reward for sticking through the hardfork.
Yes but it depends on whatever does better in the end.
My solution to the problem ( I hope )
https://steemit.com/cryptocurrency/@cryptoninja/secure-your-eth-asap
Merge them!
That is now impossible or at least as good as.
I'm gonna go ahead and suggest you're spreading FUD. If you deal strictly with ETH and pretend ETC doesn't exist, you don't have to worry about anything. If you want to access your ETC for some reason, you just need to use the splitter contract first. Here's a guide for this process:
https://steemit.com/ethereum/@pauls/ethereum-fork-step-by-step-guide-to-safely-splitting-your-eth-etc#@exyle/re-pauls-ethereum-fork-step-by-step-guide-to-safely-splitting-your-eth-etc-20160726t194543626z
Then you are good to go.
Lol I'm proud of you! Now I'm going to suggest you don't know what you are talking about. Replay attacks are a real problem.
It's definitely a real problem, I just don't think it affects ETH as much as you think it does. Also, does it affect anyone who deals strictly with ETH? From what I've read the last couple of days, it does not.
Maybe not but the perception is that it does and I have seen conflicting opinions on this. I will leave it to the experts to argue it out. That said some of those very experts created the DAO debacle that started all this. If even they don't understand things fully what chance do the rest of us have?
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