back to article A month to save cryptocurrency Ethereum?

Digital currency Ethereum may have less than a month to live. In just one day, the currency has plummeted in value by nearly a third after it was revealed one of its main backers had been hacked and $50m worth of "ethers" were moved to a different entity. "An attack has been found and exploited in the DAO [decentralized …

  1. tony72

    Is it just me?

    I never heard of Ethereum until I read this story. And a quick search of El Reg reveals only two minor passing mentions of it ever prior to this story, so I guess it's not just me. So I'm having trouble assessing the significance of this story. Is Ethereum singnificant and we all somehow missed it? Or should I just go back to not caring?

    1. neilm

      Re: Is it just me?

      It's not just you. I've been surprised by El Reg's lack of coverage (and I think they commentary in this article is far below their usual standard).

      The Economist had a nice piece called "The great chain of being sure about things", but the ecosystem and its funding have expanded quite a bit since it was written.

      You can think of ethereum as a global singleton virtual-machine-cum-ledger that styles itself as an "unstoppable and uncensorable" "world computer". Filtering the genuinely useful applications from the hopelessly idealistic ones the subject of much debate right now, but I can imagine that automatically and instantly executing "smart contracts", between parties that need not trust each other, could be a boon. And not just for the worlds under-/un-banked and/or those in countries without strong legal systems.

      At he same time, the "unstoppable and uncensorable" styling will make it plain why mitigating today's theft might be controversial.

      Some see ethereum's Turing complete execution environment as a security worry, but so far the biggest problems have been in the smart contract code written by third parties running inside ethereum's virtual machine (the JVM doesn't stop you writing buggy Java code).

      The Ethereum Foundation has an extremely ambitious road map to scale the system by a few orders of magnitude, which would open up micropayments and far more complex applications than are currently viable. If they can pull that off -- and if those building applications can avoid further multi-million-dollar screw ups like the today's -- then ethereum could be genuinely world changing. But it's a massive if.

      1. Anonymous Coward
        Anonymous Coward

        Re: Is it just me?

        > "unstoppable and uncensorable world computer"

        In other words, a bunch of libertarian bullshit that will get wrecked on its first contact with reality.

        Which is basically this event right here.


  2. J. R. Hartley

    It's fucked

    Pull it.

  3. Anonymous Coward
    Anonymous Coward

    What the fuck. ..

    ...was that all about?!

  4. Derek Jones

    The code is the definition of behavior

    Ethereum's 'smart contracts' are essentially programs whose execution is intended to have a contract-like nature. Existing programs, err contracts, include lotteries and other fun stuff.

    Of course a new language was needed for the new age of smart contracts. Solidity is its name (essentially C plus extras that were thought to be a good idea from Python and other languages that presumably the Ethereum people have used). God forbid anyone would design a language with reliability in mind:

    Of course the key to code reliability is following the Ethereum smart contract coding style guide, which of course the majority of people don't seem to be doing:

    The site has not been hacked. The terms of service quite clearly state that what the code does is the definition of the system. Somebody simply put the time into understanding what a 'smart contract' did and executed it appropriately.

    "The terms of The DAO Creation are set forth in the smart contract code existing on the Ethereum blockchain at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413. Nothing in this explanation of terms or in any other document or communication may modify or add any additional obligations or guarantees beyond those set forth in The DAO’s code. Any and all explanatory terms or descriptions are merely offered for educational purposes and do not supercede or modify the express terms of The DAO’s code set forth on the blockchain; to the extent you believe there to be any conflict or discrepancy between the descriptions offered here and the functionality of The DAO’s code at 0xbb9bc244d798123fde783fcc1c72d3bb8c189413, The DAO’s code controls and sets forth all terms of The DAO Creation."

    1. StaudN

      Re: The code is the definition of behavior

      Well that clears that up then!....

    2. JRBobDobbs

      Re: The code is the definition of behavior

      Well quite - and the smart contract allows the 'hack', so they don't really have a leg to stand on with their reset proposal. If the developers do intervene then it defeats the whole point of smart contracts.

      They wrote a buggy contract, they're going to have to suck it up.

  5. Pascal Monett Silver badge

    Another virtual toy is broken

    Insofar as I couldn't care less, I don't see why - apart from the supposed monetary value, obviously - this thing shouldn't simply be killed. Somebody got hacked, somebody else is taking the money. That means that the system is broken. Tear it down, start over again. Do that until you get it right.

    The only interest I find in all these playmoney projects is that someone, somewhere, is going to one day produce something that will be worth it : a secure, reliable fund-trading platform that can actually be used to pay for legal stuff legally.

    That will be the day I will look at participating in such a project. Until then, all such projects are just catastrophes like this waiting to happen.

    1. Voland's right hand Silver badge

      Re: Another virtual toy is broken

      Not just that.

      Money theft is part of the way of life and normal money movement. If someone robs an armored deposit van, the country bank does not reissue the whole country currency. Sure, some of the numbers (where known) will be tracked for a while, but the currency itself is not reset - it is the way things work, real currencies have operated under constant possible theft scenarios ever since the first coin was minted in Ancient Greece.

      So I do not quite see why a virtual currency should be any different. It is virtual toys of a spoilt brat which is throwing them out of the pram while crying "Maaaaamaaaaa".

      1. Anonymous Coward
        Anonymous Coward

        Re: Another virtual toy is broken

        and most countries now days if someone robs an armoured van all the monies destroyed by glue anyway.

  6. Arthur the cat Silver badge

    First as tragedy, then as farce

    As Tim Worstall, late of this parish, once remarked, crypto-currencies are replaying all the scams, frauds and failure modes of historical real world banking. Another couple of centuries and they might be reliable.

    1. Tim Worstal

      Re: First as tragedy, then as farce

      "Another couple of millennia and they might be reliable."

      1. Anonymous Coward
        Anonymous Coward

        Re: First as tragedy, then as farce

        ""Another couple of millennia and they might be reliable.""

        Currencies are only as good as the amount of trust people place in them. Whatever the faults of the banks, they've been building up trust networks since the Middle Ages; at the bottom is a complex underpinning of relationships and when (as in 2008) it goes wrong the results are very damaging and trust takes a long time to build up.

        So anything that says "trust me, I'm based on something you can't see, feel or talk to" has a major problem right there. After all, we tried it with religion, and outside the US much of the West is getting right over that.

    2. phuzz Silver badge

      Re: First as tragedy, then as farce

      There is something to be said for re-testing long held assumptions.

      In physics every so often someone will design a new experiment to measure the speed of light. Not that we imagine it has changed, but it's good to test things in new ways.

      Similarly, although people have predicted that unregulated, decentralised currencies would be rife with pyramid schemes and confidence scams, but these brave souls are testing those assumptions with their own money.

      And mainly losing that money, but it's nice to sure yes?

  7. Androgynous Cow Herd

    I am having trouble

    That any part of this thing is worth fifty million real honest to gosh dollars to anyone.

    1. Anonymous Coward
      Anonymous Coward

      Re: I am having trouble

      Look at Twitter's "valuation".

      At least monopoly money has a value - if you fill a sack of it and take it to a primary school they can make papier-maché out of it.

  8. Grifter

    Currency schmurrency, can't we get to Post-Scarcity already?

    1. Peter Gathercole Silver badge

      Currency scarcity

      Arthur - "What's that smoke"

      Ford - "It's just the Golgafrinchams burning the trees"

  9. Anonymous Coward
    Anonymous Coward

    the value of bits...

    I'm more amused about the notional value of what is being stolen. The reality is likely most of these developers have the 'ethers' only because they were the early adopters. They didn't 'pay' anything like the amount they are/were valued at (and possibly just paid in their time or cpu cycles or similar) so are really only reaping the reward of lousy security in their storage system (as opposed to being left penniless in any real world sense). The protocol that defines the currency and thus a transaction in it can be run by anyone who has access to the private data that defines the 'ether' I would assume.

    So, upshot, there's nothing here to suggest the currency is flawed, only that they need a better safe in their bank. You'll note though I said "nothing _here_ to suggest", not that there's nothing wrong with the currency... the juries still out on that as it is for all the other new digital cash proposals.

  10. JimmyPage Silver badge

    however:blockchain != "currency"

    (FSVO "currency")

    Having been tasked by my employer to deep dive blockchain in general, it seems most people - *especially* "experts" have been a little bit starstruck by BitCoin, and can't separate the concept of virtual currency from blockchain. As even the tone of this article demonstrates.

    Like it or not, there is a slow development of blockchain for all sorts of uses. Just one example is a distributed ledger for the provenance of gemstones - an attempt to address blood diamonds.

    Blockchain is like paper - yes, you can print banknotes on it. However you can also do a lot more with it (including burning it :) )

  11. Anonymous Coward
    Anonymous Coward

    Blockchain could be used to manage gold certificates ...

    ... representing gold bars or coins stored in secure places like Fort Knox. In that case, on should really be worried if certtificates valued at 50 millions are stolen by cybercrime methods.

    Bitcoin, Euthereum and other cryptocurrency pipe dreams just represent wasted electric energy, and should be valued as such. Then there would be no reason to worry ...

    But there is real reason to worry when people keep implementing financial applications on unsecure platforms that obviously get hacked routinely - no matter whether those applications are based on blockchain or more traditional methods. And if poor programming can have the same effect, then the situation is even worse.

  12. lukewarmdog

    Not real money

    It's not real and someone stole it but we could revert that theft. Now there's something I could get behind, after stories of untraceable Bitcoin thefts this seems an improvement.

  13. Anonymous Coward
    Anonymous Coward

    you got ta laff

    They want to fork my nethers?, sorry lad i M TOO BUSY SCRATCHING THEM.

    Should we not get them kickstarter page for their nethers.. I thought bitcoin had died out and all the other pseudo currencys

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