Why Ethereum Can No Longer Be Trusted as it Breaks Away From Immutability & What That Means for SteemIt

in #steemit6 years ago (edited)

I wrote this piece for my weekly newsletter, Crypto Brief, that went out last night. However, I feel it is an important topic to talk about. Let me know what you think below.

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The Ethereum hard fork commenced last week, which was essentially the removal of the stolen ether from the wallet of The DAO hacker to be placed in a new smart contract. That smart contract would have a single job: to distribute 1 ETH for every 100 DAO tokens. On the surface, that doesn't sound so bad.

But it actually completely breaks the nature of the Ethereum blockchain and, quite frankly, ruins the entire project. Perhaps in the short-term, it won't, but let me explain what actually happened when this hard fork executed.

A transaction had been made that essentially moved funds from The DAO smart contract into a new DAO. This was a transaction executed by the code of The DAO. While it left many people without their money, it was a transaction that the code allowed for.

Essentially, this hard fork reverses that transaction even though it is technically forcing a second one. By doing that, the Ethereum core developers have basically decided that a certain transaction is unacceptable and have changed that transaction.

Part of the reason that people trust blockchains such as Bitcoin's and, previously, Ethereum's is because the transactions on the chain could not be changed. Proof of work exists, in part, to ensure that previous transactions are not changed; that is the point of the blockchain. As each block goes farther back, it becomes increasingly expensive to change a transaction.

Yet, the core developers decided to change it because people lost money. And by doing that, they showed that, with enough pressure, future transactions could also be altered if enough people don't like them.

Now we see that there are two Ethereum chains: Ethereum One and Ethereum Classic. And there is a market for both of them.

I wrote this piece for my weekly newsletter, Crypto Brief, but I wanted to share it here, as well, because I think it's an important topic to talk about. 

One of my good friends sent out a tweet storm talking about the new market that is showing up. The market is between a mutable (changeable) versus an immutable (unchangeable) chain. Will people opt for the former or the latter?

If I were investing in Ethereum, my money would be on the immutable chain. I want to know that any transaction that takes place cannot be changed because people don't like it. That's the point of a decentralized ledger. Otherwise, why are we even doing this?

I know there are many people who will disagree, but the reality is that people need to trust that the blockchain will be secure. And if they can't, they'll find a new chain that they do trust.

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Impact to SteemIt?

So what does this mean to SteemIt? Why does Ethereum having a hard fork that changes a transaction have to be discussed with regard to SteemIt?

Fundamentally, if you can't trust the blockchain, you can't trust that your transactions are secure. Part of the SteemIt community's independence is in its ability to vote up whatever you want. That's the freedom to vote. 

If, however, those with commit ability started to change votes, you'd be dealing with a blockchain that was mutable (changeable). As writers, how could you trust that your content was being fairly influenced?

I'm very much of the belief that for blockchains to survive, the people need to know that the transactions on said chain cannot be changed. If, on the other hand, they can, there are real problems. So as a community, it's important to ensure that the chain stays immutable. 

Thanks for reading. Let me know what you think. 

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Wow, that didn't take long for @ranko-k to down vote it. I wonder why...

"if enough people don't like them." or if a central authority with enough power doesn't like them. I feel this event is very significant and very bad for the entire crypto community,

That's very true. The ability to pressure them has increased significantly. It's why I believe Bitcoin is lucky that Satoshi left. No one can be pressured.

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