After the White Hat recue failure, Ethereum’s DAO soft fork also failed this week due to a vulnerability in the code. Here are the cryptocurrency highlights of week 26:
- Ethereum’s DAO crisis continues as an attack vector was identified in the freshly released implementation of the DAO soft fork, which was intended to freeze the funds in The DAO so that the DAO attacker would not be able to complete splitting ether from it. Unfortunately, the soft fork appears to enable a Denial of Service attack which could “slow down mining and prevent inclusion of legitimate transactions”. The discovery forced Ethereum developers to immediately advice against running the DAO soft fork update, and now prepare a hard fork to dismantle The DAO at a feverish pace. This would have to be completed within the next two weeks (before July 15, 2016), or else The DAO attacker will be getting away with 3 million ether.
- In the meanwhile, there appears to be some discussion again on a possible Bitcoin hard fork to increase the block size limit to 2MB. In short, mining pool operators would be colluding to switch from Bitcoin Core to Bitcoin Classic in a proposal that goes by the name of “terminator”. BTCC is said to be the only one still undecided on the matter, meaning that pools and miners representing more than 75% of the total network hashrate do support the proposal. The proposal would still give Bitcoin Core developers some time to release a new Bitcoin Core client with a 2MB hard fork code, but that would have to happen by August 1, 2016 at latest. For now, the former is still largely based on rumors, but if true the block size debate could quickly escalate in the very near future.
- One of the biggest and most popular Bitcoin scams of the moment, HashOcean, has finally collapsed. Despite triggering many red flags and being labeled as a fraudulent service by Digiconomist in July 2015, the service is still said to have been able “steal millions of dollars from approximately 700,000 users worldwide”. The scammer had taken excellent measures to prevent his identity and location from being found, so the victims have started a petition asking the FBI (or a similar organization) to trace the owner(s) of HashOcean. In the meanwhile, HashOcean has started on the second part of its scam operation. The service claims to have been “hacked”, and promises a refund if another amount of Bitcoin is transferred to it. This is an appalling tactic to make more money out of the scammed victims, and hence Digiconomist strongly advices not to pay any more money to this scammer.
- It’s been a while since we last heard about those involved in the epic Silk Road saga, but unsealed court filings reveal that corrupted Secret Service agent Shaun Bridges is suspected of stealing money in at least two other cases besides stealing more than $800,000 worth of Bitcoin during the Silk Road investigation. Bridges had pleaded guilty to the latter last year, and was sentenced to six years in prison in December 2015. It turns out that Bridges was also able to steal $700,000 worth of Bitcoin from a Secret Service account, despite the Justice Department urging the Secret Service to move the funds in the account as they believed Bridges held the private key to this wallet. The Secret Service did not realize the funds were stolen until a court ordered it to pay a portion to claimants.
- The Bitcoin price regained some of its momentum this week, as the exchange rate of the most popular digital currency gained more than 6 percent, taking the price per BTC to about $695. On the other hand Ethereum lost most of the value it had recovered in the previous week following the panic caused by The DAO hack. The DAO soft forks’ failure weighed in heavily on ether’s exchange rate, causing a loss of almost 15 percent and taking the price of ETH to $12.06 per coin.