Those of you that invested in an Ethereum mining share through Bitclub Network, may have seen some press over the last few days concerning an attack on the Ethereum DAO (that is Decentralized Autonomous Organization by the way, in case you weren't sure). And you might be wondering if that mining share purchase is going to prove to be a dead duck.
Before I get into the detail below (and to be kind to those that hate to read long pieces), it is my humble opinion, but based on much research I've been carrying out, that nothing has happened that should concern any of us. If you wish to know why I believe that to be the case then read on. But first, what happened?
In a nutshell, some clever hackers found a fault or hole in the code that runs the Ethereum project and tried to take advantage of it. The press (as they always will) got hold of it and came out with scary articles like this one: THE DAO IS CLOSING DOWN
But having looked into this some, myself, that doesn't seem likely as far as I can see. I was sort of hoping that there would be some feedback via Bitclub as to how this incident would impact us as ETHER mining pool shareholders but none, so far, has been forthcoming.
So, in the interests of plugging a void that will inevitably be filled with rumour if someone doesn't, here is my take, based on my research, about what has happened in, of course, non-techy speak (I don't talk the techy language you see). A recap on what Ethereum is would be useful and a separation of its two component parts. There is the currency of Ethereum (ETHER or ETH) which we are all hoping grows massively in value and then there is the Ethereum project itself.
The ETHER had reached around $19 per (coin) in value. It is now back down to around $13. Note it still has reasonable value and is starting to climb slowly back up. If it were a dead and buried project as the article above seems to be suggesting, then it would have plummeted to zero.
Ethereum is a public blockchain platform with programmable transaction functionality. It provides a decentralized virtual machine that can execute peer-to-peer contracts using a cryptocurrency called Ether. It is all about the ability to write contracts and programmes within a system that is supposed to be hugely secure and is, of course, decentralised and controlled by consent rather than controlled by Government, Corporations etc. The hackers were able to interfere with how this works.
Please understand that I am no expert on this stuff but I think of it as a huge, Internet based computer programme that allows clever individuals to come up with all sorts of wonderful ideas to allow us to trade and exchange various contracts in all sorts of different ways. It also allows for the transference of monetary value using the ETHER in the same way that THE BLOCKCHAIN does for Bitcoin.
Wow, gets confusing doesn't it...
Here is Vitalik Buterins' take on the incident (he's the really clever chappie who came up with the Ethereum idea in the first place): ETHEREUM BLOG
I've read several other articles and blogs and it seems to me that there are as many opinions on what has happened as there are colours in a rainbow. What comes through is that actual money (ETHER) hasn't really been "stolen" or hacked away but rather sent somewhere and it can't be taken any further (I know, hellishly confusing isn't it).
I think, but it is just my opinion, that this is a case of baby having teething troubles that baby will eventually get over and, in the process, baby will learn and get better for it.
That's me being techy - see I told you I wasn't very good at it!
I think it will be business as usual for ETHER and ETHEREUM once the dust settles but, again, at the risk of droning one that is just my humble opinion. |
