Submitted by Micah Smith on Tue, 11/28/2017 - 11:39
Cryptocurrency
Cryptocurrency

There are those that think that the most controversial content of our time is President Trump’s tweets. However, for us business Cyber enthusiasts, a much more divisive and captivating subject is cryptocurrency.

It seems that public opinion still stands at around 50-50 on whether cryptocurrency is a good investment. Even the business maverick Gary Vaynerchuk himself is undecided about it.

With plenty of experts on both sides of the issue, one of the biggest drawbacks of cryptocurrency use, is the frequency with which it can get hacked.  On the plus side, Bitcoin - just surpassed the $7,000 mark. One Bitcoin is now worth more than $7k, that's a large incentive to get involved.

So, what are the benefits of using cryptocurrency?

It’s all completely peer-to-peer and there is no singular government regulation associated with it. Since no one can track any transactions as they happen in real time, governments can’t tax them either. So, it’s anonymous, easy to use, and currently tax-free.

Cryptocurrency can be very advantageous for companies that want to raise capital quickly and pay no taxes on it. Many ICO’s (initial coin offerings) are able to raise millions of dollars and are attractive to users because of the cryptocurrency that is used.

So, whether you’re an excited libertarian that wants to limit government interference in your financial transactions, or a young entrepreneur, cryptocurrency offers an exciting new frontier.

What is going wrong?

Just yesterday, a well-meaning user accidentally deleted roughly $300 million worth of Ether. There was a vulnerability found in the Ethereum Parity Wallet, which accounts for 20% of the entire Ethereum network. According to Parity, the vulnerability was triggered by a Github user called “devopps199”, who removed a critical library code from the source code.

This action made the user the owner of a bunch of Ethereum accounts, and then he killed the wallet contract which made the currency disappear forever.

That’s Ethereum-degree murder.

How can accounts disappear from a change in one line of code? And a better question, how could Parity have overlooked such a critical vulnerability?

It’s funny that Devops199 actually wrote a statement about what happened. He commented

"I made myself the owner of '0x863df6bfa4469f3ead0be8f9f2aae51c91a907b4' contract and killed it and now when I query the dependent contracts 'isowner(<any_addr>)' they all return TRUE because the delegate call made to a died contract."

Researchers are estimating that around $280 million worth of Ether has become inaccessible, including $90 million which was raised by Parity’s founder Gavin Woods.

This is not the first time that Parity experienced a cyber-attack (a.k.a cyber mistake). Back in July, an unknown hacker stole $32 million in Ether before the community was able to secure the rest of the funds. Parity issued a statement at that point, that they were going to upgrade their library to make it more secure.

Meanwhile, any ICOs that were held after July 20th could still be affected. So, Parity froze all of its cryptocurrency until it secured its library.

Money simply vanishing is a little too reminiscent of a recession, depression, or any of those ugly little words we don't want to be reminded of.  So, we recoil at the thought of investing our cash into the abyss. Once they start working harder on the Cryptocurrency security front, the courage needed to move a little further into this incredibly dynamic marketplace won't be quite so cavalier and it's something we can all look forward to, immensely.

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