Why the DAO Fall Happened?
What happened in these days with the actions of a daring character, which could undermine what was considered an inviolable network, it left the users of the cryptocurrency wondering how can this happen? As well, accord to the attacker who made a publication where the fact is attributed declares that their actions are legal.
Ethereum was first proposed by Vitalik Buterin in 2013 and was launched with its first beta release in 2015. It means in a record time compared with bitcoin which began in 2009 and its first transactions they took place in the years 2010 and 2011; it has had a gradual growth, in addition to the bitcoin has gone through various tests, audits, with small quantities of money to ensure that its code is not a requirement.
Meanwhile the DAO system, is the opposite since this is based on technology from Ethereum which seems to have the need to overcome the bitcoin, offering more services and creating different projects such as intelligent contracts in wich DAO is based as a use of the cryptocurrency Ether, but beyond their cryptocurrency all the functionalities offered by the Ethereum project seemed to fit quickly in the mind of the investor and was of this way that it was believed that the Ether could switch the BTC as main cryptocurrency of exchange.
No doubt the ether reached to a price record in a short time this because of the large sums of dollars invested in the project to develop DAO’s smart contracts, the same that brought the Ethereum Blockchain quickly to be the most valuable second after bitcoin.
William Mougayar the author of “The Business Blockchain” and Advisory Board to the nonprofit Ethereum Foundation that oversees the development of the protocol is all an authority on the Ethereum community and has left his impressions in respect to the process of the building of the network and the confidence loss of that the project has recently suffered.
In accordance to the opinion of Mougayar the amount of money invested in DAO ($150 million) is very high to start a smart contract, practically it was placed on the table all the chips without considering the risks Mougayar considered that it was not needed much money to set up an experiment, in his opinion between 10 to 15 million dollars it had been enough since with this amount the developers would have sufficient monetary incentives. “It was explained to me…” Said Mougayar “that the project was an experiment meant to distribute funds to other ethereum projects, and I thought it was a noble goal if it was tightly managed with clear and strict guidelines”
According to Mougayar, in mid-May, the issues of financing of the DAO began to swell to new heights, “I worried”. On May 18, at the OuiShare Conference in Paris, Mougaya warned that the DAO experiment could be too big and too risky. In particular, he said: “I would like to warn about not going too fast and assuming that we can have the DAO from the beginning, It takes practice, it takes some tests. I would like to see evidence of these with small values in dollars not millions of dollars where losses could have some serious repercussions throughout the whole system”. They ignored him and the consequences are evident.
Mougayar says that this is not the time to get philosophically an explanation, or claim that the hacker hasn’t done anything bad because he fell with a smart valid contract, using a feature that “allowed” him the movement of DAO funds. “We shouldn’t buy that argument. The hacker is trying to stay with 3.6 of ETH as a selfish reward for doing anything except the exploit itself”. It is to say that there is an undue appropriation according to the expert and it can be punishable it is to deserve a pay without doing the job.
These vulnerabilities were known?
Otherwise, these defects were already known as Vitalik Buterin explains on his blog and is being done gradually. There was no need for a spectacular exercise for pointing out the weaknesses of the DAO and its set of smart contracts. However the history would have been another if the hackers had a shred of goodness in them, it could easily be ethically exposed failures in the contract code, which could have put an end to its operation just to try it, and return immediately the Ether as an ethical hacker would do. There is nothing ethical about this hacker or a team of hackers. It is all a ethic lesson that usually not abounds in this society of “every man for himself”.
Disclaimer: This press release is for informational purposes only. Information does not constitute an investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent infocoin views and should not be attributed to Infocoin.