jun 17, 2016 - Cryptocurrency: Ethereum - 50 million worth of token stolen

Description:

http://uk.businessinsider.com/dao-hacked-ethereum-crashing-in-value-tens-of-millions-allegedly-stolen-2016-6/?IR=T

Early Friday morning, it appears to have been hit with a devastating attack, with unidentified attackers appearing to exploit a software vulnerability and draining drain millions of ether — with a theoretical value in the tens of millions of dollars.

One ether wallet identified by community members as a recipient of the apparently stolen funds holds more than 3.5 million ether. At an exchange rate of about $14 a unit, that works out at $47 million. At $21.50, the value of ether before the hack, it's significantly more — $79.6 million.

The price may well drop further as the US wakes up and news of the hack spreads.

The community has been working to come up with a solution to the theft, which has continued over a period of hours. One solution proposed was to "roll back" Ethereum several hours to before the attack — essentially restoring a backup of the digital currency and erasing any recent payments. But there is significant resistance to this idea.

"You can't rollback and drag the whole of Ethereum into this mess," one community member said in Slack. "The fault is entirely with The DAO and not Ethereum, let the DAO sink and have done with it. Ethereum will recover, there's nothing wrong with Ethereum."

Vitalik Buterin, the founder of Ethereum, is proposing a "soft fork" that will prevent the attacker from being able to make valid transactions, effectively freezing the funds. The stolen funds are locked in a "Child DAO" and are unable to be moved for another 27 days, Buterin says — giving the community time to debate and adopt a potential solution. "This will later be followed up by a hard fork which will give token holders the ability to recover their ether," Buterin writes. (This solution would not involve any "rollback" or negating any transactions.)

The decentralised nature of the DAO — and of Ethereum and digital currencies more generally — means there is no central authority that can simply flip a switch and make changes. Decisions have to be reached by community consensus.

The Ethereum Foundation, a nonprofit that helps guide the digital currency, is calling on digital exchanges to temporarily halt withdrawals in light of the attack. Kraken has complied, writing on its website: "This does not appear to affect Kraken but, out of an abundance of caution, and at the request of the Foundation, we have temporarily paused withdrawals in order to prevent any ether stolen from The DAO from flowing through Kraken."

The value of Ethereum relative to the US dollar has plummeted over the past few hours, according to data from CryptoCompare. At the same time, the volume of transactions in Ethereum has spiked, indicating panic selling.

Added to timeline:

Date: