The Ethereum community received a nasty surprise about 24 hours ago. More specifically, the Parity wallet was successfully exploited once again, causing half a million ETH to be frozen and rendered unusable. The company has since issued an official statement to clarify the situation and explain how it will move on from here. A special website will be launched to collect a list of people whose wallets have been affected by this exploit so far.
Parity is Still Sorting Things Out
Almost a full day after the Parity bug was reported initially, the total damage is slowly coming to light. As was to be expected, this bug affects quite a few different Ethereum wallets all over the world. That is not a good sign, as there should be no way to prevent individuals from using their own money to begin with. That is a privilege reserved for banks, but it has no place in the world of cryptocurrency whatsoever.
This makes the whole Parity situation pretty abysmal, to say the very least. It is not the first time this wallet software has suffered from major issues either, but the team is working to rectify the situation. So far, not much has been done to ensure people can access their funds again. It is unclear how many ether are effectively locked in useless smart contracts right now, but the early estimates put the number at close to half a million. At today’s value, that is around US$155 million worth of ETH having been locked and rendered unusable.
Moreover, the Parity team has launched a dedicated website where users can check to see if their wallets were affected by this freeze. So far, a total of 584 affected wallets have been identified, which seemingly belong to 573 different owners. Anyone who is not using an Ethereum multisig address has made the smart choice for once, as those users are safe from harm as far as this issue is concerned. That means the average Ethereum user who doesn’t care all that much about security is now in a position to spend money, whereas others may not be.
Indeed, it is rather strange to see people essentially getting punished for using a multisignature solution. Then again, the total damage could have been much worse. For now, we hope the money can be unfrozen sooner rather than later without having to resort to a blockchain rollback for the second time in Ethereum’s history. For now, that option is still on the table, although nothing has been officially communicated by the developers. We do know Vitalik Buterin is contemplating making ether more scarce than it is right now, although it is unclear if that will have an impact on the Parity situation.
All this goes to show that there is still a lot of uncertainty regarding the freeze bug and the situation in which a lot of users presently find themselves. Finding a solution is still the top priority right now, but doing so is much easier said than done, to say the very least. Parity is still analyzing the situation in hopes of finding a solution over the next few days. It is evident such a solution needs to be found soon, before people start to lose all faith in Ethereum altogether. One would have expected better from the world’s second-largest cryptocurrency by market cap.
It will be interesting to keep an eye on the new Parity website. While we can only hope the total number of victims will remain limited to those already identified, it is equally possible the amount will double or even triple. Multisignature technology needs to be developed carefully, and the Monero team has showed how it is taking its sweet time in doing so to ensure there is no possibility of locking up funds or anything similar. An interesting future lies ahead for Ethereum, yet its multisignature approach may need a lot of work moving forward.
