A hard fork of the Ethereum network has officially taken place, in an attempt take back funds perceived to have been stolen from the DAO. The fork allowed the funds to be relocated to an account where rightful owners are now able to withdraw them. Earlier solutions had included orchestrating a soft fork, which would have simply blacklisted the offending ether address, but this was found to be vulnerable to further attacks. With options being sparse, and many in the community seeking to be made whole, the hard fork became the last viable option.
Did the network make the right decision?
Low turn out
In Ethereum, as with all PoW currencies, changes to the network must be ruled valid by miner consensus. While the fork did have majority support, the methods by which it was achieved have been the subject of debate within the community. Mining pools used hash rate to determine the preference of their users, with most supporting the fork. However, the number of people participating is perceived to have been low, leading some to argue that votes were not representative of the larger community.
At least one pool, Ethermine, over ruled miner decision, and have supported the fork anyways. 65% of miners on their site voted against the fork, but it was decided that, since other major pools were supporting it, they would support it as well. This was billed as a safety measure, as supporting an orphaned blockchain could ultimately jeopardize the standing of the pool. This has been criticized as distasteful by some of their users, as it undermines Ethereum’s guiding principle: “Code is Law”.
In the hours leading up to the fork, prices rose a bullish 10%. This may suggest that, despite the dramatic events taking place, the effects on Ethereum will be positive in the short term. Many exchanges paused withdrawals, and in some cases suspended trading of ether entirely. Once normal operations resumed, nearly half of all the relocated funds were withdrawn.
Though no one can be certain what the repercussions for Ethereum will be in the future, the currency does not seem to have been hindered by the outcome of the fork. The community made the decision to fork together, likely encouraged that there was something they could do about an attack, for once. If we can weather this storm, the lessons instilled by the DAO may prove invaluable. Such mistakes have the potential to make the platform and the community stronger than ever.