Blockchain Semantics Insights

Business Case |  Deep Tech |  Announcements |  Blockchain Glossary | 
Blockchain Semantics Blog Why did Ethereum implement a hard fork?

Why did Ethereum implement a hard fork?

Dec. 28, 2017, 8:59 a.m. GMT

To fund the development process of Ethereum project, the community launched the Decentralized Autonomous Organization, popularly known as DAO. The DAO had an objective to provide a new decentralized business model for organizing both commercial and non-profit enterprises for Ethereum. It was, needless to say, created on the Ethereum blockchain, and had no conventional management structure or board of directors. Think of it essentially as a humanless venture capital firm which allows investors to make all the decisions through smart contracts. Anybody could be a part of the venture capital by buying tokens of the chain. In June 2016, the DAO smart contract was hacked.

By the time of the attack, DAO had raised around $150 million and is considered to be the biggest crowd funding effort in the blockchain history. And then on June 17th 2016, a hacker started draining funds from the contract taking advantage of a loophole in the DAO code. While the core developers who designed and run Ethereum didn’t really have anything to do with the DAO, they were left to deal with the mess. They managed to stop the theft and move the funds to a safe smart contract.

By that time, the hacker had already amassed around $50 million. To reverse the attack, the Ethereum community unilaterally made a decision to hard fork the Ethereum network. By hard forking the network, the state of the network was reverted to the previous day and transactions were rolled back. Though this hard fork was introduced for genuine reasons, it goes against the true spirit of decentralization. This resulted in resistance against hard fork and some miners decided to keep mining on the original chain which resulted in the creation of Ethereum Classic.

To learn more about Hard fork and Soft fork, How and Why it is implemented, pls visit Blockchain and Bitcoin Certification by Blockchain Semantics.

If you liked the post, give it a   0
Apply for Blockchain Jobs

Course 1

Introduction to
Blockchain and Bitcoin

Course 2

Developing Decentralized
Applications on Ethereum
Using Solidity

Course 3

Investing In Bitcoin
and Cryptocurrencies


Be the first to comment.