Ethereum Executes Blockchain Hard Fork to Return DAO Funds
Ethereum has executed a hard fork of its blockchain, returning funds lost in The DAO collapse to investors.
The much anticipated hard fork of the ethereum blockchain has been implemented, giving those building on the decentralized application network at least the potential for stability after weeks of controversy and sometimes terse disagreements in the wider community.
At approximately 14:30 UTC today, China-based ethereum miner BW.com mined the ethereum blockchain's 192,000th block. Seconds later the mining pool also mined the first block on the new blockchain, which returned funds lost in the collapse of The DAO to an account available to its original investors.
The achievement, which returns approximately $40m worth of ether from an account owned by an unknown hacker to a new address, is being met with celebration by many members of the ethereum community. However, the actual implications of the decision, which essentially showed that a supposedly immutable blockchain history can be altered, is yet to be seen.
Co-founder of ethereum startup Slock.it and author of most of the DAO code, Christoph Jentzsch, wrote on his company’s blog to acknowledge those who helped pull off the implementation and execution of the hard fork code.
The hard fork of the ethereum blockchain moved the funds tied to The DAO to a new smart contract designed to to one thing: let the original token owners withdraw the funds. The token owners were given the original exchange rate of 1 ETH to 100 DAO tokens.
The original compromise occurred on 17th June when funds from The DAO, a distributed autonomous organization built as a fund for ethereum-based projects, were drained into an account controlled by an unknown hacker or group of hackers. Following multiple so-called white hat attacks designed to move the remaining funds to accounts controlled by the tokenholders, a series of efforts were attempted to recover the funds, or find another course of action.
However, by early this week, the hard fork option had emerged as the clear path forward, a decision that was influenced by the fact that, due to the rules in The DAO's code, the funds would have been made available to those who took the funds from the original contract on 27th July, at which point they could have been potentially sold or otherwise exchanged.
Any extra balance that now remains is expected to be withdrawn and distributed by the DAO curators, individuals appointed yesterday to oversee the distribution. Earlier curators appointed prior to the launch have stepped down, according to Alex van de Sande, who was among the original curators.
Multiple hard fork counters set up leading up to the event had yesterday predicted it would occur almost two hours later than it did, and it’s currently unclear why there was a discrepancy, though one likely possibility is that the ethereum blocks are mined at an inexact period of approximately 14 seconds.
Since the hard fork, an additional 153 blocks have been successfully mined. However, as suggested earlier, the move may not be without continued controversy.
The decision to hard fork was initially met with resistance by some members of the ethereum community who were concerned it might undermine the perception that the blockchain was immutable, and that contract agreements, once settled to the blockchain, would be final.
With major banks and startups alike now building with ethereum, this is a concern that will likely be followed closely.
CoinDesk is following this developing story.
Banana split image via Shutterstock; Ethereum blockchain image via Etherscan.io
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.