November of 2017 saw a large amount of cryptocurrency funding in the form of Ether frozen because of an issue that occurred with a popular wallet software. Since then there has been a debate going on as to whether or not the recovery of those funds is something that is morally justified. With over $260 million in Ether being frozen, the amount of Ether that has been frozen due to the code fault is that of significance to the Ethereum blockchain network. However, the many proposed efforts to recover those lost funds have been bashed by the cryptocurrency community at large. A new effort is now being made which is aiming to fix the problem without being too invasive.
For those not up to speed, back in November, the UK based startup Parity saw its multi-sig wallet hacked by an anonymous hacker and then subsequently deleted because the hacker accidentally activated the self-destruct code in the wallet. In the aftermath of the hack and the deletion of the wallet, Parity proposed making modification to the Ethereum software in order to recover the lost Ethereum wallet by removing the self destruct code altogether. This was a cause of concern because removing this would impose security risks on the whole Ethereum blockchain network.
The Latest Proposal
With the initial proposals being shunned by the community, the latest proposal by Parity to come in has been to just recover the wallet by a utilizing a version of the code that does not have the self-destruct code. This will allow the Parity users to recover the $260 million worth of Ether and it will protect Parity users from being subjected to something like this again. This proposal makes more sense considering that it will not remove the self-destruct code but just allow the recovery of funds.
The Real Difference In This Proposal
The most notable aspect of the new proposal is the case specific nature of it. It will only be focused on the users of the Parity software, and just the $260 million worth of Ether that had been lost when the wallet was hacked back in November. This contrasts the previous proposals that had been made, which suggested the idea of having recovery being done on a general basis if necessary.
The Parity Debate Continues
When the whole incident and then the subsequent proposals for the recovery of $260 million frozen in the Parity wallet being considered, even the latest proposal will not be anything short of controversial. The logic behind that debate is that if there is an allowance of a case specific recovery of funds, it implies a very dangerous precedent for the Ethereum blockchain network from that point onwards.
The Parity Ether funds being frozen happened due to the hack and because of an issue with the code that was exploited by the hacker. A lot of community members believe that developer interference in the matter will then go on to reduce the whole decentralized aspect of the Ethereum blockchain network.
The proposal has been made and it still remains to be seen whether or not it will be implemented any time soon.
Charlie Shrem is a Bitcoin pioneer, a social economist and digital currency trader. His work in this field is legendary. In 2011, at the dawn of the crypto era, he founded BitInstant, the first and largest Bitcoin company. In 2013, he founded the Bitcoin Foundation and serve as its vice chairman. Since then, Charlie has advised more than a dozen digital currency companies, launched and managed numerous partnerships between crypto and non-crypto companies, and is the go-to guy for some of the world’s wealthiest entrepreneurs. In short, he is the ultimate insider at the epicenter of the crypto universe.
Crypto.IQ is a premier advisory firm providing expert research, education and advice in the world of cryptoassets. The company is unique in that it combines the unparalleled expertise of crypto pioneer Charlie Shrem with the unparalleled market knowledge of three Wall Street experts with more than a century of combined financial industry experience. Together, they have managed and traded more than $1 billion in assets. In a world of "instant experts," who have little knowledge or trading experience, the Crypto.IQ team offers the proven depth, insight and knowledge to help their clients achieve success.
Raise your Crypto.IQ…and profit! Crypto.IQ gives you the insider knowledge you need to succeed as a cryptocurrency investor.