How one kid inadvertantly froze over $150 Million worth of Ethereum by accident

Parity, a major Ethereum wallet is in damage control today after a vulnerability froze a minimum of $150 million within users accounts. The parity Ethereum multisig wallet is based on an Ethereum smart contract, coded by the Parity team.

The post above is the very moment the unknown person realised what damage their tinkering had caused. Smart contracts are basically coding to allow developers to create programs based on the Ethereum blockchain. Parity had coded their wallet like a 'bank'. Through sending your Ether to the Parity wallet you are essentially allowing the Parity wallet to store the Ether until you withdraw or send it.

There was an unknown 'bug' in the coding of the smart contract for the Parity wallet (not an issue with the Ethereum blockchain itself). This bug was triggered by the aforementioned unknown person. The Parity program is still holding the Ether, it just can't be recovered.

According to social media reports figures range from 0.6% of all Ether up to 1.0% in total. Parity have responded with the following tweet; confirming the bungle:

At this stage Ethereum's price hasn't been affected to badly. Some commentators have actually pointed out that it has made Ether around 1% more scarce. The following chart shows the market reaction at the time of the announcement.

Sophisticated blockchain technology such as Ethereum will continue to have possible vulnerabilities if the 'smart contract' side of things is programmed by end users incorrectly. Each vulnerability does allow an opportunity for blockchain technology to grow. There are already rumblings of a new fork due to this issue. Stay tuned on that front.

By Andrew Butler of CryptoCult
Sponsored by Bitbar (BTB)

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