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DAO HACK: Ethereum soft-fork approved

The Soft-fork was accepted by a majority of miners who acted as voters in this newly reached consensus. This decision will affect, not only The DAO, but also the entire Ethereum ecosystem, and while it’s globally viewed as the best course of action against the Attacker leaving him unable to withdraw the Ether stolen, many argue that the hacker may have never expected to get the Ether drained from The DAO into his own wallet and is instead profiting from the information known only to him regarding this event: By selling Ether on an exchange before the attack happened, the user can now double his funds in this currency. Many exchanges are currently investigating this possibility and have assisted the Ethereum team during the hours following the attack.


The Soft-fork will freeze, not only the Hacker’s ChildDAO funds, but all DAOs 1.0 ever created, affecting many Ethereum users. For example, Andreas M. Antonopoulos has his own DAO 1.0 with something like 20ETH in it, if the Ether is still there when the soft-fork is implemented on the Ethereum network, it will be forever lost along with any Ether contained in every single DAO 1.0 ever created. Although the Ether lost in this endeavour would be a very small drop in the Ethereum ocean, it can be seen as problematic.
The Soft-fork measure will be implemented as a way of gaining time to either put another plan in place or to negociate with the attacker since this measure will freeze the attacker’s stolen Ether and can be reverted at any time if the hacker decides to cooperate or if another solution is found.
Many see this kind of evolvement by the members of the Ethereum foundation as an affront to the Decentralized nature promoted by the Network itself, while other see the soft-fork as a mandatory measure to be taken, arguing that one malicious user holding so much Ether will put the transition to Proof of Stake consensus at risk, endangering the whole ecosystem: “Ethereum cannot switch to PoS if ~5% of coins are in attackers hands. No PoS, no scalability, no future.” Says Dino, one of the many Ethereum miners who voted for the soft-fork.
In a PoS or Proof of Stake system, a user is rewarded according to the funds being held in his wallet, in this system we can compare the PoS miner’s coins to the PoW miner’s computational power, meaning that if the attacker was to be allowed to keep the stolen funds he would continue to profit from this theft for many years to come. Having a considerable amount of ETH in the hands of the attacker can also be a security risk, in the sense that it can allow the user to acquire 51% of all the Ethereum coins in circulation, allowing this user to manipulate the transactions in the Ethereum network to his benefit.
Some also believe that the Soft-fork will be the end of the DAO hack if the Hard-fork is not implemented, thus leaving a staggering amount of Ether in the Dark DAO, never to be used or recovered again by the attacker or the Ethereum community. Even though the attack was executed due to a bug in The DAO code, it came as a warning to any person or group working with Ethereum smart contract technology to thread carefully when doing so.

– António Madeira

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