Ethereum 2016 Hard Fork

The Ethereum miners and community has decided, with great opposition by many, to do a hard fork in order to resolve the DAO hack

The mega-fork will occur at 1920000, which is approximately July 20th. The Ethereum team has reached out to exchanges who will either halt Ether transaction or disable external movement while the hard fork, hard forks. The support for the fork is rather low currently around only 60% (meaning 60$ of the mining community has upgraded software to support it).

However regardless if they all do or not, it's happening. Which causes some issues.

Smooth Process?

The real problem is that no one is 100% sure exactly how well, or not well, this is going to go and it's going to be quite the mess. If you're wondering why Ether has rising a bit lately it's might be due to the fact it's going to split into two. Yes. After the hard fork all Ether holders will have twice the Ether as they did before it happened. However the "old" Ether will not be Ether, it'll be something else (Ether Classic) but at least one exchange has already committed to supporting it.

The ethereum hard-fork supporters denounce this of course, mentioning the tokens from the losing chain will be a "keepsake" that some may just want to hold on to. 

However, before you get your hopes up, if  "ETH-classic"retains any value and more specifically which of the two chains actually retains its tokens value, is still in question. 

The "new" Ether will be the new chain of the Ethereum network and essentially two chains will exist from now on since heavy opposition of the fork are refusing to support the new chain and will continue to support the pre-forked chain. 

This brings into question, which one is the "real" Ethereum network? The original chain is the original chain. The new chain is the result of the fork. If this were to happen with bitcoin without a full consensus then the new chain would not be bitcoin, the new chain would be an altcoin.

To make matters worse, if you want to maintain your ownership of both coins on both chains, you have to worry about the replay attack. It will still be possible on the original chain, but in keeping both chains synced during consensus, it may also be possible for malicious transactions on the original chain to seep into to the new chain. 

Let's stop and think this through for a second. This just happened about 4 weeks ago and now rushed and hurried code, in what a large portion of the community disagrees with doing in the first place, is going to be shoved into place to get the DAO's money back. 

This has Windows Vista written all over it. Remember that bag of ass?

How It Works

To understand the danger here, the way the fork will work is by maintaining transaction on both the original and new chains. Meaning if a transaction happens on one, it will happen on the other and vise-versa. Unless of course it involves the Dark DAO, then no go, however this opens up all kinds of new vulnerabilities during this process and ongoing as well since the two won't part ways in the it must be reverted to or used again in the future. 

This simply opens up potential problems that many argue should not be tampered with. 

If it works and nothing bad happens you still have two chains and a jacked up system but one that can be managed and tolerated by its user base, especially since many members of its current userbase won't be using the new chain and sticking with the original.

Its messy. 

Just Because You Can, Doesn't Mean You Should

It is tragic that the DAO hack resulted in 60 million stolen, however, that's not all of the Ether on Ethereum. In fact its not even the majority. This fork is putting everyone else at risk for the benefit of one group. It also has the potential to cause a serious ongoing problem of continued requests and expectations of hard forks every time Aunt May loses her tokens. 

Who is going to decide that? Who chooses when and who to bail out? Is there a published document somewhere that outlines what can be considered for a network reversal?

Beyond that what may end up happening is many people losing trust in the Ethereum network for a while and this may not be reversible any time soon or at all. What the hard fork will show is that the previously expected trust of the Ethereum network no longer exists. It means a transaction completed is not a transaction completed if enough people decided they don't want it to be that way anymore.

This is one problem many point out with Ethereum right now since it is a new network and why caution should be exercised when using Ethereum or investing in Ether.

This has been part of the entire debate over the fork and many argue this was the absolute worst thing that could have been done. Especially now, just when Ethereum and the DOA hack dust was starting to settle. This is likely to stir it all up again. 

That said, there was no right solution, doing nothing would have been bad too, just might not have been as bad.

Report by dinbits
Image source: dinbits staff

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  1. Very informative! I didn't know the details of TOR's features until reading this.
    Jayme Silvestri


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