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Etherium: Hacked

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Somehow bitcoin imitators have gotten the impression that designing a new crypto currency is easy.

It isn't. It was a subtle work of coding and for that matter an unlikely convergence on infrastructural questions that produced bitcoin. Others have successfully piggybacked on that, creating alternatives with a tweak here and there. But bitcoin retains its dominance. And trying to do the whole thing again from scratch? Good luck. Miracles don't cluster, as Daniel Webster used to say.

Enter Etherium. This is a crypto currency supported by the largest crowdfunding project in history and software called the Decentralized Autonomous Organization, or DAO.  

Early on Friday, June 17th, someone began exploiting a flaw in the DAO and stole 3.6 million of the "Ether" (the units of this currency) -- given the dollar/ether exchange rate just before the attack, this amounts to a loss to the participants of US$80 million.

In the words of Tom Simonite, who wrote about this raid for the MIT Technology Review, "Suddenly Etherium and the idea of putting complex software in control of money doesn't look so smart."

Here's a technical explanation of how the hacker/hackers pulled it off.



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