In an event that shook the world of cryptocurrency, more than $300 million of the cryptocurrency ethereum evaporated in mere seconds. And it was all at the hands of a single developer named “devops199.”
This incident is not the first-time cryptocurrency has been lost, hacked, or stolen, and it certainly won’t be the last. Here’s what went down. Back in July of this year, there was a theft of $32 million in ether from just three multi-signature wallets, which the community responded to by a marathon of coding and hacking efforts to secure another $208 million against further theft. The developer Parity had been fixing that bug, but in doing so left a flaw in its systems that allowed a single user, devops199, to take control of every single multi-signature wallet—by accident.
When devops199 realized what they had done, they immediately attempted to undo the damage by deleting the code which had transferred ownership of the funds. It didn’t work. Instead of returning the money, devops199’s panic move simply locked all the funds in those multi-signature wallets permanently, with no way to access them. And just like that, poof! $300 million was lost, permanently frozen, or whatever you want to call it.
So, What Happens Now?
One way to undo the damage is to pursue what’s known as a “hard fork” of ethereum, which would effectively ask 51% of the currency’s users “to agree to pretend that it had never happened in the first place.” In order for the hard fork to work, it would require a change to the code that controls ethereum, which would then have to be adopted by the majority of the user base. But there’s a big risk to this approach – if some of the ethereum community decides not to accept the change, it could split the community into two groups at odds.
It’s a risk, but it’s been pulled off before by the ethereum community, and chances are they will opt for it again in this case. But time will tell.
For some readers, this type of story may all that’s needed to steer clear of cryptocurrencies in general, but ethereum in particular. That’s understandable. But in reality, any interested investor should first conduct as much due diligence as possible, to learn everything you can about cryptocurrency before making an informed investment decision. Tickeron can help. You can use the resources on the website to learn more about cryptocurrency, and soon there will be Artificial Intelligence tools you can use to analyze patterns in the cryptocurrency markets to help you make investment decisions.