$280 Million Ethereum Blunder May Result In Hard Fork

A developer with the pseudonym devops199 has confessed to erasing the library used to access Ethereum stored in multi-signature portfolios created by the firm Parity. As a result, the equivalent of about $280 million has been frozen, with no possibility of being released.

The error is human

According to preliminary information, the problem seems to be the result of an accident by a novice who was able to cancel a contract in the absence of measures protecting the system. The developer immediately documented his error on GitHub. On the other hand, the incident is very important since the affected portfolios are often used by SMEs to store certain funds raised with various investors.

“We are analyzing the situation and will release an update with further details shortly,” Parity said in the security alert.

Difficult decision

The only solution today is to make a “hard fork”, that is to say that we change the code and that users of the cryptocurrency agree to act as if nothing had happened. The problem is that if a segment of the public refuses to submit, the Ethereum will be maintained by two parallel groups, which will plummet the confidence of the markets and ipso facto the value of the currency.

In July, Parity’s coding error had enabled hackers to steal $32 million in ETH and the company appears to be at the center of more similar issues that may have affected thousands of users as the latest problem affects all the multi-sig wallets deployed after July 20.

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About the Author: Nicolas Melendez

Nicola has over six years experience as a educator, business owner and financial adviser. He has a B.S. from Cornell University, and a Ph.D. in Sociology. Nick has worked as a computer tech for a major insurance provider before becoming a freelance tech and financial writer. To contact Nicolas, just click here

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