All new technologies involve learning curves and teething problems, and Ethereum has been no different. In terms of creating confidence in a new technology, there’s a chance that Ethereum has already blown it. In June, an anonymous coder tricked a smart contract belonging to virtual firm Distributed Autonomous Organization (DAO) into executing multiple times, extracting around $80 million (about £60 million, AU$105 million) worth of ether.
“It caused a loss of confidence, which knocked about 25% off ether’s value in a few hours,” explains Hrycyszyn. “In response, the people who cryptographically create the ether decided to amend the history by simply ignoring the fact that the attack had ever occurred.”
Since Ethereum’s contracts are defined in computer code, stored in a blockchain, and executed by Ethereum itself, Ethereum’s controllers were able to ‘hard fork’ the ledger’s history and delete the fact that there was ever an attack. That kind of intervention goes against the whole point of the blockchain’s ‘trustlessness’ ethics in the first place.