Ethereum, the only meaningful cryptocurrency competitor to bitcoin, is fighting off a DDoS attack. On Thursday morning, Ethereum co-founder Jeffrey Wilcke announced the attack, urging Ethereum miners to switch to a new mining method to circumvent the effects.
If you’re confused, Ethereum is a blockchain technology that’s a bit more than a cryptocurrency. It broadens bitcoin’s scope: bitcoin is attractive because it decentralizes money and is supposed to be static, stable, and unchangeable over time. There’s a permanent, unimpeachable record of all transactions (the “blockchain”), which purports to give the inherently unstable currency stability. In brief, Ethereum’s founders are trying to incorporate these advantages into other industries. Not only money can benefit from stability and an immutable record: The theory goes that social networks, medical establishments, and even governments could employ blockchain technology.
The problem, however, is that it’s vulnerable. And “stable” in the 21st century is relative. Thursday’s DDoS attack exposes the fact that malicious actors can still impede blockchain-based currencies. Though industries like IBM and Samsung have already worked with Ethereum, and big-name banks have expressed interest in the technology, these events are likely to generate distrust. And all Ethereum-reliant subsidiaries, like Arcade City, suffer.
Meanwhile, there are those who have exchanged actual money for Ether (Ethereum’s version of dollars, or euros, or what-have-you). These folks — the “miners” — seem relatively unfazed, but reputational hits such as this one are often more significant than they first seem. Ethereum developers are hard at work on a patch, and the attack is already costing the hacker about $4.50 per minute. The attack was successful insofar as it slowed down transactions and made the price of ether drop some, but other than that the network is proving resilient. Most Ethereum users see the attack as a positive: The fact that someone is willing to devote resources to hinder Ethereum means that it’s doing well. As one Reddit user put it:
Even with this attack, a transaction happens a lot faster than in a normal bitcoin transaction. I don’t see it as a really threat but should be fixed anyway. … Ethereum is a target ‘cuz is important now, but now imagine all those other coins that are not even multi-client… Ethereum showing it’s really strong. Thanks Ethereum Foundation, you going great, even with attacks.
You've read that, now watch this: "Finland's New Basic Income Experiment"