Ethereum freeze

Roger asked 1 year ago

I read that a smart contractor somehow accidently deleted a library and caused millions of dollars of Ethereum to become unaccessable. How does that happen?  Sure doesn’t sound like the coin is very safe.

1 Answers
Steven Hay answered 1 year ago

Hey Roger,
Yes, that did indeed happen to the Parity multisig wallet, which is a smart contract-based Ethereum wallet. The hack has resulted in 150,000 ETH becoming totally inaccessible. It’s unclear if Ethereum will hardfork to restore the coins or not. This is similar to the previous major hack of The DAO smart contract, although in this case it appears to have occurred by accident rather than malicious design.
Ethereum is a lot more open-ended than most cryptocurrencies in terms of what you can instruct it to do. For eg. you can tell Bitcoin how much to send and to who, and when, and with another party’s permission… and that’s about it. I may have left some out, but the point is that Bitcoin has an intentionally far more limited instruction set than found in Ethereum.
This gives Ethereum a much larger attack surface; people will try all sorts of things which the smart contract coders never anticipated. We only hear about things going wrong when large amounts of money are lost but I imagine small things go wrong all the time. Coupled with smart contracts which are frequently poorly coded and full of bugs and you do indeed have a very risky model for financial contracts.

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