Book Corner 2020.59

by Matthew Leising

A double story – the founding of Ethereum; and the $55 million heist of its cryptocurrency, ether, in 2016.

Written by a journalist and based entirely on first-person interviews, it’s got credibility and an in-depth perspective. Leising spends a lot of time speaking with and admiring wunderkind founder Vitalik Buterin, Russian-Canadian child-prodigy eccentric genius who saw the potential of blockchain to do more than just serve as a ledger of a digital currency. The beauty of Ehtereum, the Avis to Bitcoin’s Hertz, the number-two-trying-harder, is that its ledger doesn’t just store coins or tokens or static things. It also stores programs, “smart contracts”, which can DO things to the things. You can have literal contracts. You can do crowdfunding. You can do anything you can dream up and code in their programming language, Solidity.

But it also stores cryptocurrency, ether, the “gas” that makes the contracts go, and a speculative currency in its own right. And basically, one day a hacker found a bug in a big important “smart contract” which allowed him to sneak in and steal ether, over and over again.

He was stopped. White-hat programmers first went in and exploited the same bug to “steal” as much ether as they could to keep it safe from the thief and be able to return it to its rightful owners… but then the hacker snuck into the stolen ether, too.

So they had to decide what to do… one option was called the “hard fork,” which meant basically rewriting history so that the hack never happened. Ether is, well, ethereal – it doesn’t exist except in the blockchain, so, why not? You can code whatever you want and make it so the hack never happened. But many objected to this, including Vitalik, as “icky.” You’re not supposed to do that. The thing about blockchains is they’re supposed to be immutable. In fact, the thief didn’t really “steal” anything or do anything wrong, right? In theory, he just ran the program a certain way, doing something that it allowed him to do. There was no fundamental bug in Ethereum. It was doing exactly what it was supposed to do. Not the hacker’s fault somebody coded something in a smart contract that they didn’t intend to.

Well, the other option was to basically invalidate the stolen ether – they could make it so that it would no longer be tradeable for other currency, making it worthless.

They chose the hard fork. This isn’t a spoiler. Anyone who cares knows.

It was a pretty good book… never really got bogged down in anything that would be over an interested reader’s head, and never got boring. (  )

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