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Ethereum Users Lose Money from Hacks?

ethereum

Ethereum is said to be the next big thing. Many investors are actually optimistic when it comes to its possibilities especially being the second largest cryptocurrency based on market cap. Many believe that Ethereum has what it takes to one day dethrone Bitcoin from the top spot. However, despite the soaring price in 2018 and then followed by a correction, one thing is quite clear—and that is users are losing money due to hacks, human errors, and faulty codes.

It has been an old issue that has split the platform already. And as recent activity on GitHub, it shows that there are tensions yet again.

Parity last year lost 513,000 ether. The debate escalated in the forum after the release of a sketch for a standard recover proposal that could be standardized in order to make things easier to implement.

Led by Dan Phifer from Musiconomy, an ICO issuer that witnessed 16,475 ether lost in the Parity freeze, and two developers from Tap Trust, the document offers to make it easier for Ethereum clients to be able to implement so-called state changes or upgrades. The upgraded software will allow users to reflect redistributed fund balances.
There are others who look at things differently. They believe that this isn’t exactly needed. This mechanism is suggested to be out of line with the guiding methods of Ethereum.

Ethereum founder Vitalik Buterin, developer YoiChi Hirai, and communications manager Hudson Jameson have already rejected this proposal. Hirai, for instance, mentioned that it is “at odds with the Ethereum philosophy” saying that he isn’t going to support any changes. The same is true for Alex Van de Sande, the founder of Ethereum’s Mist browser. He mentioned that lost funds should be “rare and increasingly exceptional”.

Previous Hack

If you will look at the past hacks, 2016 DAO hack was one of the worst in the history of Ethereum’s platform. In fact, we saw 3.6 million ether worth $2.6 billion in today’s prices get stolen from users’ wallets. And the sad news is that it is all due to a problem in the code that someone exploited.

Developers then implemented an update that was able to reverse the DAO theft despite the reality that many community members were actually against the idea of such. And because of this, it gave birth to Ethereum classic that is now valued at $1.7 billion. In fact, the event “left many scars, a split community and talking points that ethereum detractors seem to want to point to forever” according to Van de Sande.

And just when the parity exploit happened, tensions have begun once again. Parity wants to offer a solution that requires a software upgrade. And since many people have criticized this move, it was DAO theft from last year all over again.

However, Hirai puts it simply in his blog. He mentioned that “each user of ethereum is responsible for their use of ethereum”. And given the nature of cryptocurrencies, this is the truth that every investor has to deal with. And though you can potentially earn a good amount of money from price fluctuations, keep in mind that these problems occur within the community specifically to Ethereum.

Janneke Eriksen

Janneke is a writing ninja and has vast experience in journalism, specifically in the crypto space. As a blockchain believer and avid Bitcoin fan, she’s incredibly excited to share to our readers the latest news around so they are always updated wherever they are.

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