A Strange 4Chan Hoax Just Disrupted Ethereum’s Future
How many times is this going to happen?
Vitalik Buterin, the inventor of Ethereum, a blockchain-based cryptocurrency system, died in a car crash on Sunday — or at least, that’s what an anonymous prankster on 4chan wanted the world to think. While Vitalik was alive and well the entire time, the strange rumor of his death had a troubling effect on the fate of his cryptocurrency, which started to decline rapidly throughout the night.
An anonymous poster on 4chan.org started the rumor of Buterin’s death a little after 4:30 p.m. on Sunday, sparking a thread with hundreds of comments as other users jumped in on the hoax or asked for a source. The cryptocurrency, which suffered a far more serious flash crash last week, has continued to drop overall, although the blip caused by Buterin’s death hoax eventually leveled out. As of Monday, the cryptocurrency’s price was down by 20 percent, but the strange death hoax points to a uncertain future for the system as a whole.
On Sunday, a user started a thread with this tagline: “Vitalik Buterin confirmed dead. Insiders unloading ETH.” in 4chan’s /biz/ forum.” The post continued: “Fatal car crash. And now we have our answer. He was the glue. It will be difficult for ETH to recover and the entire crypto sphere is in big trouble.”
The post, of course, was a hoax, and Buterin posted a selfie to Twitter with a portion of Ethereum’s recent blockchain ledger (a constantly-updating feed of numbers) on a piece of paper.
But while the 4chan post was a hoax, it did have a kernel of truth. If something were to happen to Buterin (unlikely, as he is by all appearances a normal 23-year-old programmer), it likely would have a disastrous effect on the cryptocurrency. Like world leaders or major CEOs, Buterin’s death hoax proves that the inventors or major programmers behind cryptocurrencies are inextricably linked to their products, making them vulnerable to cyber-pranks or disruptions. QZ reports that the hoax knocked $4 billion off Ethereum’s total market value (currently around $26 billion).
Blockchain-based cryptocurrencies are built around the assumption that the immutable nature of their code makes them more reliable and transparent than traditional currencies. But the technology is so new and volatile, and the market so competitive, that the slightest blip or rumor can set off a chain reaction of people trying to get in or out. Buterin has marketed Ethereum as more than just an economic system, and rather as a “world computer” that will eventually power communications and transactions on an unprecedented level.
But it’s already had to weather a handful of scandals and crises: in June of 2016, a hacker exploited an early vulnerability in the system and made off with $53 million worth of the digital currency, tanking the system’s value overall. Ethereum has suffered through DDoS attacks and potential “whale” investors cashing out — like its more famous competitor Bitcoin, the price is known to fluctuate widely in short periods of time.
Ethereum’s prices still appear to be sinking, but CNBC reports that it’s still up two percent overall for June. Still, in the first six months of the year, the cryptocurrency expanded exponentially (up 4,000 percent at one point), so slow growth or stagnation isn’t a good sign. And if all it takes to start a minor panic is an unsubstantiated thread on 4chan, that doesn’t bode well for the future of the system.