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The DAO Community Shudders With Misfortune


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Well, it’s never a dull day in crypto-land as yesterday’s overnight was pretty eventful. Bitcoin took quite a hit in value, but the talk amongst most of the community is the coordinated attack against the DAO. The DAO Hub project which had raised close to $160 million USD had caused quite a bit of attention towards this experimental project, as it was exposed for being very vulnerable last night.

“The leaked ether is in a child DAO at https://etherchain.org/account/0x304a554a310c7e546dfe434669c62820b7d83490; even if no action is taken, the attacker will not be able to withdraw any ether at least for another ~27 days (the creation window for the child DAO). This is an issue that affects the DAO specifically; Ethereum itself is perfectly safe.” Statement from Vitalik Buterin Inventor of Ethereum

Last night an individual or a team of hackers managed to drain the DAO for 3.53 million Ether (roughly $50 million USD) which was routed to an unknown address. A vulnerability was found within the code which allowed the severe leaking of the autonomous organizations ship. There have been attempts to fix the situation with a counter spam attack, and there have been talks of a hard fork as well. Following the attack, a significant dive in the Ether exchange rate had taken place as well resulting in the token valuing at $15 USD per ETH. At the time of this writing, the price has rebounded to $17.75 for one Ether. The Slock.it team leader Stephan Tual had this to say in the event:

“A community driven solution minimizing damage looks within our grasp.—The Ethereum Foundation has published its statement and a description of the solution. In summary, a hardfork will retrieve all stolen funds from the attacker. If you have purchased DAO tokens, you will be transferred to a smart contract where you can only retrieve funds. Since no money in the DAO was ever spent, nothing was lost.”

Vitalik Buterin had supposedly saved the day when in regards to the attack, and there was a post written about it in the Ethereum Foundation blog. Yet the website is experiencing a severe DDoS in traffic, and it seems the post is not publicly available anymore. However, talks of forks within the Ethereum blockchain is not welcomed by all. This is not the first “roll back” attempt or hard fork fix to recover a situation in crypto-land. This has happened in the land of Bitcoin, Vericoin and many others with different variables and actions taken. Ethereum developer Alex Van de Sande has stated that there was no hard fork proposal stating on Twitter:

“We did not propose a hard fork to recover funds. Miners and exchanges can do their blacklist but not the EF. The DAO needs to upgrade asap.”

When asked why the hard fork message was posted to the official Ethereum Foundation blog Van de Sande said, “that’s the line we disagree on. Vitalik wrote that without consulting other devs and we are telling him to strike it out.” The line other Ethereum developers wanted striked out was, “This will later be followed up by a hard fork which will give token holders the ability to recover their Ether.” Many in the DAO community and Ethereum camps as well are concerned about the implications of a hard fork as this procedure doesn’t make cryptocurrency fans comfortable.

The DAO price has lost a significant amount of value as well with an average exchange rate of roughly 12 cents USD at the moment. Alongside this news posts on the subreddit r/bitcoin have filled up with discussions of the DAO. Others have correlated the situation with the 2013 Mt Gox scandal, but many have said just like that situation it’s not the fault of the cryptocurrency network. Andreas Antonopoulos gave his opinion of the situation today saying, “Remember how Gox and April 2013 felt. Now is the time to be supportive and gracious. Growing pains are part of growing.”

There surely will be more information about this matter to come out over the next day or two. Live Bitcoin News is following this story very closely. The Ethereum and DAO camps seem to be fairly transparent about the entire situation even though there is some disagreement. We shall see what happens with the Space Oddity Ethereum and the interesting experiments associated with it.

Source: Medium, Twitter, the Ethereum Blog, The DAO Hub live feed, Reddit, Coinmarketcap

Images: via Slack, Ethereum Blog, and Pixabay

Jamie Redman
Jamie Redman
Jamie Redman is a financial tech journalist from Florida thats been entrenched in the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written hundreds of articles about the disruptive protocols emerging today.


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