Speaker 1: What would you do if you made a mistake that
Speaker 1: costs people three hundred million dollars. I'm Jonathan Strickland, and
Speaker 1: this is Tech Stuff Daily. On Tuesday, November seven, a
Speaker 1: company called Parody had to break some pretty bad news
Speaker 1: to its customers. The company developed a digital wallet meant
Speaker 1: to be the secure storage location for a digital currency
Speaker 1: called ether. Ether is used by an app platform called Ethereum.
Speaker 1: Parodies news was that an effort to patch an identified
Speaker 1: vulnerability in their digital wallet solution led to a new vulnerability,
Speaker 1: one that was accidentally exploited. The vulnerability was a real
Speaker 1: doozy that allowed a single user to become the owner
Speaker 1: of every multi signature digital wallet on the Ethereum platform.
Speaker 1: This would be like waking up to discover the wallet
Speaker 1: of every person in the world had mysteriously shown up
Speaker 1: in your house. You'd have some explaining to do. In
Speaker 1: this case, the user is DevOps one nine nine. Clearly
Speaker 1: that's a handle. The Guardian, which reported on this story,
Speaker 1: didn't reveal the person's real name. It's pretty clear that
Speaker 1: whomever is behind the DevOps one nine nine handle didn't
Speaker 1: intend for this to happen. What did happen was that
Speaker 1: this developer, apparently by accident, turned the parody wallet library
Speaker 1: contract into an actual multi signature wallet and then became
Speaker 1: the owner of all the wallets. Then this developer, perhaps
Speaker 1: in a panic, when the realization dawned that this had
Speaker 1: all happened, tried to undo this mistake by deleting the code. Unfortunately,
Speaker 1: it didn't reverse the mistake. Instead, it froze all the
Speaker 1: funds in the system. The means to unfreeze the funds
Speaker 1: are located inside the code that was deleted. In other words,
Speaker 1: the developer did the equivalent of accidentally stealing all the
Speaker 1: wallets in the world, which appeared in this developer's enormous vault.
Speaker 1: Then the developer tried to fix the problem by destroying
Speaker 1: the vault. However, what happened was the vault door has
Speaker 1: now been permanently stuck shut and the money inside it
Speaker 1: is effectively lost. There is a potential, though problematic, fixed
Speaker 1: to this problem that would involve creating what is called
Speaker 1: a hard fork. To understand what this means, we need
Speaker 1: to think about block chains for a second. A block
Speaker 1: chain is a record of transactions that everyone in the
Speaker 1: system has access to, rather than a centralized database of transactions.
Speaker 1: The blockchain is distributed across the entire system. It's an
Speaker 1: integral component of the system itself. Everyone can view it
Speaker 1: and thus authenticate the transactions that have already happened. Cryptocurrencies
Speaker 1: like bitcoin use the blockchain to verify not just a transaction,
Speaker 1: but also to release more of the currency into circulation
Speaker 1: and a process called mining. Ideally, a blockchain is a
Speaker 1: steady series of blocks of data representing all the transactions
Speaker 1: that have happened with the cryptocurrency, going all the way
Speaker 1: back to the earliest pens. A hard fork is when
Speaker 1: administrators of a system make the decision to backtrack and
Speaker 1: branch off of an earlier block to start from that
Speaker 1: point forward. This is sort of like playing a video
Speaker 1: game in which you can save your progress at any time.
Speaker 1: Let's say you're playing the game and you realize you've
Speaker 1: made a choice that's leading you down a path you'd
Speaker 1: rather not take. You can't backtrack, so instead you restore
Speaker 1: a save file you made from before that fateful choice.
Speaker 1: You now can choose a different path and continue playing
Speaker 1: the game. In a way, that's what parody might be
Speaker 1: able to do with the ether that's been locked away.
Speaker 1: There's no method to reverse the mistake Devop one nine
Speaker 1: nine made, but the company could backtrack a bit and
Speaker 1: make a hard fork earlier in the chain to bypass
Speaker 1: the mistake entirely. This could mean having to turn the
Speaker 1: clock back to a point that invalidates some transactions, which
Speaker 1: is problematic. A few wallet owners might find themselves short
Speaker 1: of some currency or in possession of a bit more
Speaker 1: lucre than they should have, and it's non decision for
Speaker 1: the company alone. It would require a fifty one agreement
Speaker 1: among the currency's users. If that happens, parity will be
Speaker 1: able to effectively dial back the clock. One thing that
Speaker 1: can't be undone is the blow to cryptocurrencies reputation. Digital
Speaker 1: currency in general has been the subject of much debate.
Speaker 1: There have been a few notable problems, including hackers stealing
Speaker 1: funds through various security vulnerabilities in different digital wallet platforms.
Speaker 1: So why use a cryptocurrency at all? For one thing,
Speaker 1: the decentralized structure means the currency isn't dependent upon any
Speaker 1: government or financial institution. In theory, this isolates the currency
Speaker 1: from the fluctuations that could affect national currencies. However, in practice,
Speaker 1: the value of currencies like Bitcoin has been inconsistent. Cryptocurrency
Speaker 1: and blockchain strategies aren't going anywhere, but it's likely that
Speaker 1: there will be more scrutiny directed towards both the technology
Speaker 1: itself and the supporting tech like digital wallets in the future.
Speaker 1: This isn't a bad thing and may eventually lead to
Speaker 1: an implementation that is more secure, allowing digital currencies the
Speaker 1: chance to become more of a mainstream technology. If you'd
Speaker 1: like to learn more about cryptocurrency and all other things tech,
Speaker 1: subscribe to the tech Stuff podcast. We published the show
Speaker 1: on Wednesdays and Fridays and cover tech topics in much
Speaker 1: greater detail. I'll see you again soon.