Parity hack restore proposal
Ethereum is currently the second biggest and most recognizable cryptocurrency next to the Bitcoin. It succeeded as the project didn't mean to compete with Bitcoin, they wanted to provide new features and new technologies. Thanks to their smart contract system, thousands of projects, decentralized applications and platforms are being built. Most of the ICO project that we are being announced almost every day, are based on Ethereum protocol.
A few months ago, in the November, 2017, the possible biggest incident happened to Ethereum. Due to a code issue with Parity wallet software, almost $264 million worth of cryptocurrency were frozen as it's been now estimated. Parity is the second most popular wallet choice for Ethereum. According to data from EtherNodes.org, Parity constitutes roughly 20 percent of the network. The vulnerability affected any Parity wallet created after particular period of time, which used "multi-signature" functionality. Multi-signature requires more than one key to get access to the wallet. The enormous amount of funds that got lost, may have a significant impact on the currency. Therefore, there were some developers suggesting at the time that a hard fork is the only way to fix the problem.
In November, a pseudonymous hacker managed to delete the multi-sig wallet, by the exploited function called "self destruct". In a response, Parity proposed a modification to the Ethereum software, where this self destruct feature would be disabled. However, it turned out to have some considerable security risks and couldn't be applied.
This time, while still looking for a possible solution and answer, Parity suggested restoring the lost wallet library with a code without this self destruct function. If applied properly, this could mean that the users would be able to restore their wallets and unfreeze the trapped funds. Moreover, the fixed code would prevent similar disasters in the future.
Ethereum Core developer Nick Johnson talked with CoinDesk. The developers have been doing their best to not give up on restoring people's money. He said: "I think simply recovering funds is both more technically sound and more honest than the original proposal to modify the self-destruct opcode". The same goes for the co-founder of Augur, a project built upon Ethereum protocol. Joey Krug said: "I do believe it doesn't make sense to just have all this capital senselessly locked up".
What is interesting about this proposal, that it is not only a general update to prevent future extortions, but it is a direct attempt at restoring the lost funds. It targets specifically 513,774.16 ETH lost that day. However, the debate goes about whether the community should stand for such action. Joey Krug believes that "proposals like these should be accepted provided the code was actually audited, if it wasn't the community should be less forgiving". There are users who say that Parity should have prevented such extortion and even if it happened, there shouldn't be official updates and actions to get these coins back. One user has written on a forum: "Allowing case-by-case proposals for mistake reversals is a terrible idea and opens up all kinds of concerns. This would set a terrible and dangerous precedent".
You may also like
Monero Leads Market Recovery with Ethereum. XMR +15% in Two Days - Monero News
Whale Moves Chunks of Ether Hoard - Ethereum News, ETH Price
Fake Ethereum App Amasses 100 Installations. Ethereum News, ETH Price. Thursday, August 23
Ethereum News and ETH Price Chart: Ethereum Co-founder Lubin Says Market Situation Will Not Affect Growth. Monday, August 20
You need to login to create comments.