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Early Investors are making 50,000% returns on ICOs

Early investment is paying off big time

The average return on the S&P is 10%. Over the last year bitcoin has seen unprecedented returns of 1000%. But savvy cryptocurrency investors are investing in ICOs and making ROIs as high as 50,000%. Stop and think about that for a moment. That means for a $100 investment in early 2017 you could have netted $50,000. Not too shabby for a year of trading.

ICOs (Initial Coin Offerings) are a relatively recent phenomenon where investors exchange cryptocurrency (usually Ethereum) for a stake in an early stage project. This sort of early stage investing has traditionally been highly regulated. Cryptocurrency has provided a way around these regulations. Rather than having to wait to invest until companies grow large enough to IPO and hit the stock market, ICOs let you get in at the ground floor.

Banned in some countries

Not every market is thrilled with ICOs thumbing their noses at regulation. China and South Korea both banned ICOs earlier this year and the United States is beginning to crack down on ICOs that violate security laws. Despite this, many investors are optimistic about the early stage investing opportunities that ICOs provide.

Imagine if you could get in on Facebook when it started back in 2004. Or Google just as it was raising its early rounds? ICOs make this a reality.

Top returns of 2017

2017 saw some incredible returns for investors in ICOs. Some of the leaders of the pack are listed below:

Komodo

  • ROI: $100 in their ICO = $14,151 today
  • One-liner: Privacy focussed ethereum
  • Why it matters: Komodo is yet another platform for creating applications on the blockchain. The twist is it’s focus on ICOs. It allows anyone to seamlessly create their own blockchain, issue tokens, and ICO. It’s built off a zcash fork so unlike ethereum it offers anonymous usage and transactions.

Ark

  • ROI: $100 in their ICO = $36,600 today
  • One-liner: Lets blockchains communicate with other blockchains.
  • Why it matters: There are many cases for businesses to create and maintain their own blockchain. Ark aims to allow easy communication between different blockchains. Rather than having a bunch of independent data stores and platforms with Ark there is the potential for a network. The need for this network will likely increase as more and more blockchains are created.

Spectrecoin

  • Return: $100 in their ICO = $50,834 today
  • One-liner: Privacy focused cryptocurrency
  • Why it matters: Privacy focussed cryptocurrencies like Monero and Zcash have been getting a lot of attention lately. Spectrecoins claim to fame is that it provides network privacy by running within the TOR network.

The average returns of ICOs outpace bitcoin

The top ICOs of 2017 offer thousand % returns on investment - but what about the average return? Are ICO returns simply a matter of luck?

An analysis of 232 ICOs by Mangrove Capital partners concluding that:

“If one had invested blindly in every ICO, including the significant number of ICOs that failed, this would have delivered a 13.2x return.” [http://www.mangrove.vc/ico-report2017]

At a rate of 1,320% ROI, ICOs beat out even bitcoin’s prodigious rise over the last year.

Unfortunately as ICOs gain popularity as a fundraising mechanism more and more projects seek to take advantage of them. In November, cryptocurrency startup ‘Confido’ raised $375,000 in an ICO before disappearing without a trace. Others like Tezos, which raised 232 million earlier this year, are embroiled in multiple lawsuits with investors demanding their money back. The lack of regulation in this space has lead to a wild west where anything can happen. Investors should be prepared to do their research and approach all potential investments with skepticism.

This space is just getting started

2017 has been a watershed year for cryptocurrency. But the trend is just getting started.

There are a few positive indicators that ICOs are here to stay:

  1. The number of ICOs is increasing at an exponential rate.

According to Smith & Crown, there are 190 ICOs planned for next month and more are listed every day. This is a massive increase from the handful of ICOs that launched in 2016.

2. The amount of money entering this space is trending upwards

* Totals raised are based on data from Smith and Crown and reported by companies.

Despite a brief dip in July and August, ICO investment has recovered and shows signs of increasing exponentially.

3. Barriers to entry in this space are still high, but decreasing steadily

Right now investing in ICOs has a moderately high barrier to entry. You must hold ethereum, which many investors are only just learning about. You have to learn how to interpret white papers and must be technical enough to understand how your EC20 tokens will be stored. If you want to trade on an early exchange like Etherdelta, be prepared to learn how to use metamask and manually manage your own ethereum transactions.

We will likely see more interest and activity in this space as these barriers to entry are broken down in the following year.

How can you invest?

So you’re a cryptocurrency investor. You hold bitcoin, some altcoins and are ready to take a step into the wider world of ICO investing. Here’s how you can start:

1. Obtain ethereum.

Some ICOs accept bitcoin or other cryptocurrencies but ethereum is by far the

most widely accepted crytocurrency when it comes to ICO investing. It’s also the currency of choice for trading for ICO tokens once they hit an exchange.

2. Research. Research. Research.

Unlike IPOs which require rigorous screening, there is very little regulatory work required for a company to ICO. At the very least you should look into who the founders are, how much traction they have, and what sort of token they are offering. Some ICOs are targeting investors with Google ads or awarding bonus tokens for investing within a limited time window. There is nothing wrong with good marketing tactics (they can indicate a good team) but recognize when they are being used against you.

3. Only invest what you can afford to lose.

ICOs are an extremely high risk investment. You should only invest discretionary

income and they should be a small part of your overall investment strategy. Billionaire investor Mark Cuban recommends investing no more than 10% in bitcoin. Treat ICOs with even more caution. The majority of startups fail, even well funded ones, so be prepared to lose what you invest, even if the landscape is optimistic.

Facebook’s Mark Zuckerberg Resolution: “Give People the Power” via Cryptocurrency

Mark Zuckerberg, founder, chairman, and CEO of social media platform Facebook, has posted his annual challenge. It’s often a look back at major events, taking stock of the year, and appraising what’s ahead. This year, he ended his note with a pointed call to “take power from centralized systems” by employing uses for “encryption and cryptocurrency.”

 

Zuckerberg Gets Reflective

Mark Zuckerberg believes a great challenge, perhaps the most important, facing tech companies is centralization versus decentralization. Before getting to the meat of his annual statement, however, Mr. Zuckerberg reflected on the obstacles facing his company. “Every year I take on a personal challenge to learn something new,” Mr. Zuckerberg posted 4 January 2018 just before 8am PST.

He continued, recalling how challenging himself in this manner began in 2009 during the Great Recession. Facebook had yet to turn a profit, and Mr. Zuckerberg, 33, remembers it being “a serious year, and I wore a tie every day as a reminder.”

Facebook's Mark Zuckerberg Resolution: “Give People the Power” via Cryptocurrency

Facebook started from Mr. Zuckerberg’s Harvard dorm room in early 2004. It quickly expanded due to popularity, and by later the following year had millions of members. As of 2017’s final quarter, the social network boasted over two billion registered users. The site ranks third both in the US and globally, behind Google and Youtube respectively.

“The world feels anxious and divided,” he wrote, “and Facebook has a lot of work to do.” Acknowledging the company’s limitations, Mr. Zuckerberg went on to explain “we currently make too many errors enforcing our policies and preventing misuse of our tools.”

Facebook's Mark Zuckerberg Resolution: “Give People the Power” via Cryptocurrency

Decentralization versus Centralization

For Mr. Zuckerberg, “one of the most interesting questions in technology right now is about centralization vs decentralization,” he began. “A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people’s hands. (The first four words of Facebook’s mission have always been ‘give people the power’).”

Reports daily about his and other technology-based companies potentially cooperating with authorities, helping them to gather large nets of personal information, have taken a toll on the average person’s confidence in using such sites.

Indeed, Mr. Zuckerberg notes “many people have lost faith in that promise. With the rise of a small number of big tech companies — and governments using technology to watch their citizens — many people now believe technology only centralizes power rather than decentralizes it,” he lamented.

Facebook's Mark Zuckerberg Resolution: “Give People the Power” via CryptocurrencyAs a possible answer to centralization, he ends his statement with a provocative call to “counter-trends.” Through “encryption and cryptocurrency,” which can “take power from centralized systems and put it back into people’s hands,” Mr. Zuckerberg is “interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

It’s difficult to know exactly what he’s getting at, but a platform such as Facebook embracing any cryptocurrency, or creating its own, would be a dramatic market entrant. This appears to be one of the few statements Mr. Zuckerberg has made on cryptocurrency. Loads of rumors have spread through the ecosystem for years about his possible involvement in this or that project or coin. None of them have been formally confirmed.

Dancing With the Devil: ‘Cashing Out’ Cryptos Into Fiat Not So Easy

Bitcoin and other cryptocurrency assets are precious and some of them have grown over 1300 percent in value this year. Although, with the price on exchanges being higher than ever before its now a bit more difficult for those who want to ‘cash out’ or make significantly large purchases without being watched by the prying eyes of tax collectors and governments.

Also read: Russian Regulators Draft Law to Restrict Crypto Mining, Payments, and Token Sales

Buying That Lambo May Not Be So Easy

Lately across social media and forums, you can find posts written by individuals who have ‘cashed out.’ Maybe they bought a luxury car like a Lambo, paid off their mortgage, or cleared their student loans with cryptocurrency gains. However some of conversations online concerning how to cash out detail how difficult it is without being watched, or being stopped by the third party payment processors.

Dancing With the Devil: 'Cashing Out' Cryptos Into Fiat Not So Easy
With cryptos so valuable, many people think that they can casually buy a Lambo these days.

For instance exchanges like Coinbase, Bitstamp, Kraken, and many others require a good amount of verification to revert bitcoins to fiat or vice versa. And just because you are approved it doesn’t mean you’ll be able to throw US$100,000 worth of BTC down on an exchange and expect to have the funds sent to your bank account without issue. The exchange may cancel the process even after the sale has been made. Furthermore, on the bank side, your financial institution may also stop you from cashing out large sums or freeze your account.

Typically in the U.S. and many other regions, anything between $5,000-10,000 deposits and withdrawals are monitored for money laundering and tax evasion. In essence, if you want to exit back to fiat using an online exchange to process $5-10K, you have to trust all the third parties will execute the deal as promised. Also if it’s a regulated, exchange trades in amounts mentioned earlier are likely monitored.

Two-Way Bitcoin ATMs and Taking It to the Streets With Localbitcoins

Then maybe you say to yourself, “well I could sell my funds to a two-way BTM.” Well, most of the two-way bitcoin automated teller machines only allow users to sell $200-500 per day. At that rate to cash out $10,000 worth of bitcoin, you would have to visit the BTM for twenty days straight and pay a 7-10 percent fee as well. Another talking point that always enters the conversation is those who believe it’s simple to use Localbitcoins to cash their BTC into fiat. In some areas of the world it’s easy to do this, but in countries like the U.S., they are arresting large Localbitcoins sellers for illegal money transmission and other charges.

Dancing With the Devil: 'Cashing Out' Cryptos Into Fiat Not So Easy
Selling bitcoin on the streets also has risks.

Further, it takes quite a bit of time and well-executed trades to become a trusted trader on the peer-to-peer platform. Much like eBay, it’s not easy to build robust reputation immediately. Lastly, if you choose to try and get direct cash for your BTC from Localbitcoins traders in person, you have to be completely comfortable with the deal and your surroundings. There have been many instances of street traders being robbed or scammed during a trade.

‘Someday Neo, You Won’t Have To’

It’s true many cryptocurrency enthusiasts have been able to cash out using the methods mentioned above, but there are always risks involved with converting back to fiat. Some people don’t care as they’ve done nothing ‘wrong’ and have no problem shelling out 33 percent for capital gains or other taxes involved. Also, there are many different ways people have found to be a reliable way to sell large amounts of cryptocurrencies as well. This includes people who know someone at an exchange, someone who is friendly with a miner or big over-the-counter (OTC) dealers.

Dancing With the Devil: 'Cashing Out' Cryptos Into Fiat Not So Easy
Some people believe they won’t have to ‘cash out’ into fiat.

Lastly, there are cryptocurrency advocates who just don’t care about the difficulties presented when going back to fiat. These people have the firm belief that digital assets like bitcoin, ethereum, and a few anonymous coins just might be the world’s dominating currencies. The “someday I won’t have to” exit back to fiat people exist in significant number and believe the renminbi, dollar, euro, and yen are doomed.

Do you think it’s difficult to exit back into fiat? Do you think you will never go back to nation state-issued currencies? Let us know about your experiences selling large sums of cryptos and exit strategies in the comments below.

Bitcoin Fees Have Become Infeasible

In 2013, one bitcoin cost $20. In 2017, it costs $20 to send one bitcoin. With record highs, thriving adoption, and media attention, this should be a celebratory time for bitcoin believers. And yet it’s hard to shake the feeling that something isn’t quite right. How did we reach a point where the world’s bank killer and Western Union crippler has become incapable of taking on the institutions it once sneered at? Bitcoin is hot as hell right now. But it’s also a mess.

Also read: Bitpay Plans to Use Bitcoin Cash for Payment Invoices and Debit Loads

Bitcoin Fees Have Become Infeasible

By any reckoning, 2017 has been a phenomenal year for bitcoin. Even the currency’s most ardent supporters would have struggled, 12 months ago, to predict the current state of affairs. But neither could they have envisaged, in their worst nightmares, it costing upwards of $20 to transfer a fraction of a coin. To chalk this year up as an unfettered success story calls for moving the goalposts and performing mental gymnastics. Bitcoin has made great leaps alright. It’s just unfortunate that not all of them have been forwards.

Unsendable and Unspendable, Bitcoin is a Hot Mess
“Whaddya mean bro? Bitcoin fees are fine.”

It can be debated whether Satoshi’s white paper envisioned bitcoin as a P2P settlement for micro-transactions. What can’t be debated is that bitcoin is effectively now unsendable and undependable for anything under a couple of hundred dollars. From the clearnet to the darknet, the conversation is the same: fees have become untenable. Despite this, bitcoin’s most ardent defenders remain in denial.

On some corners of the internet, questioning the gospel of Satoshi and the infallibility of bitcoin is heresy. “I can’t send a friend five dollars without a $15 transaction fee and this is the currency of the future?” raged one Redditor, to which the first three responses on r/bitcoin ran:

  • Change the settings on your wallet?
  • I upvoted you but often the inputs of a transaction increase the cost due to size significantly.
  • There are projects being worked on to lower the transaction fees such as SegWit, Lightening Network, etc. So it will be cheaper, just give it time.

There’s a modicum of truth to these rejoinders, but in the here and now, “muh segwit” or “just wait for LN” isn’t much help.

Unsendable and Unspendable, Bitcoin is a Hot Mess

Everyone has their price, a dollar figure at which they’d be willing to sell bitcoin, and also a figure they’re willing to pay to send it. Paying $20 to transfer $10 million of bitcoin seems reasonable. Paying the same amount to send $100 worth seems ridiculous. Bitcoin has been unsuitable for micro-transactions for some time, but it’s now reaching a stage where it’s unsuitable for mid-sized transactions.

Is bitcoin a store of wealth because that’s its best use case, or has it simply morphed into one because no one can afford to move it?

Don’t Confuse the Newbs

Many of bitcoin’s new investors are of humble means, setting aside $50 a week or whatever they can spare to put into digital currency. “Always store your coins in a wallet you hold the private key for,” they were urged. Now they’re discovering that their only option is to store their bitcoin on an exchange, at least until their holdings reach a level where it’s practical to withdraw to a hardware wallet.

If cryptocurrencies were to be likened to energy sources, bitcoin would be coal: expensive to move and impractical to transport in small quantities. It’s impossible to order a handful of coal every time you want to light a fire: it’s a sackful or nothing. Ethereum (gas) and bitcoin cash (hydro) are the opposite: cheap and on tap.

Unsendable and Unspendable, Bitcoin is a Hot Mess

Coal does have one thing in its favor though – longevity. In cryptocurrency terms, bitcoin is a veritable fossil. It’s been there from the start and, thanks to its market dominance, brand recognition, and capital locked in, will be extremely hard to destroy. Scaling solutions will probably arrive, and transaction fees will eventually drop, though quite when is anyone’s guess. The question is if those solutions will arrive in time. Until then, bitcoin will continue to serve as coal fueling the furnace on the runaway Cryptocurrency Express: an indispensable hot mess.

Dollar Dips, Bitcoin Jumps as Futures Start Trading

Investing.com - The dollar edged lower against a basket of the other major currencies on Monday but remained supported by expectations of higher interest rates, while bitcoin prices jumped as futures trading in the digital currency got underway.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged down 0.1% to 93.75 by 06:40 AM ET (11:40 AM GMT).

Demand for the dollar continued to be underpinned after Friday’s stronger-than-expected U.S. jobs report underlined expectations for a rate hike by the Federal Reserve at its upcoming meeting.

The U.S. economy added a larger-than-forecast 228,000 jobs in November the Labor Department reported, but the report also showed that wage growth remained tepid.

The Fed is widely expected to raise interest rates at its two-day policy meeting that will end on Wednesday but the disappointing wage data could weigh on the pace of interest rate hikes next year.

The Bank of England and the European Central Bank will also meet this week and are expected to hold rates steady.

The dollar was a touch lower against the yen, with USD/JPY dipping 0.09% to 113.38.

The euro pushed higher against the dollar, with EUR/USD rising 0.13% to 1.1789, pulling back from Friday’s three week low of 1.1729.

Sterling was slightly lower but was off the lows of the day, with GBP/USD last at 1.3383 after British Prime Minister Theresa May hailed "a new sense of optimism" in Brexit talks on Monday.

May told parliament Britain and the European Union should sign off on a deal at a summit this week "to move forwards together" to discuss future trade ties.

Meanwhile, the price of the digital currency bitcoin surged following the launch of trading of the first U.S. bitcoin futures.

On the U.S.-based Bitfinex exchange, Bitcoin was last at $16,206.00 after rising as high as $16,710.00 earlier.

Trading of futures tracking the cryptocurrency began at 18:00 ET on Sunday on an exchange run by Cboe Global Markets, less than 10 days after receiving a green light from the Commodity Futures Trading Commission.

Larger exchange CME Group (NASDAQ:CME) will begin initial listings of bitcoin futures contracts on December 18.

Bitcoin’s rally came amid fresh warnings that the cryptocurrency is a speculative bubble.

Market Snapshot – Bitcoin Futures Begin Trading as Central Banks Loom Ahead

Bitcoin Futures Begin Trading

With the lack of major news today, bitcoin futures took center stage as the CBOE began trading on them as of today. The prices had fallen towards the $13,000 region over the weekend but once the futures trading began, the prices began to recover and now trade above the $16,000 region. It remains to be seen whether this would lead to another bullish leg in the prices of bitcoin as we enter into a new phase as the far as the bitcoin market is concerned. A lot of traders would get an opportunity to short the futures and this is likely to lead to some good 2 way trading in the market and with the CME also set to begin futures trading next week, it should be interesting times ahead for the BTC market.

Volatile Week Ahead

It is likely to be an important week for the markets as there is a host of events and data from the central banks. The central banks of the US, Eurozone and the UK are set to make announcements this week and all of this is likely to bring in a lot of volatility in the markets in the short term. This hopefully would help to break many of the currency pairs out of their ranges ahead of the upcoming holidays to close the year. The Fed is expected to hike rates this week but the announcements from the others should be no less interesting

Forex- Dollar Edges Down as Bitcoin Surges

Investing.com - The dollar fell against a basket of the other major currencies on Monday but was held up slightly by expectations of higher interest rates.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged down 0.07% to 93.77 by 11:52 AM ET (16:52 GMT).

The Federal Reserve is expected to raise interest rates at its two-day policy meeting this week but disappointing wage data could weigh on the pace of interest rate hikes next year.

A stronger-than-expected U.S. jobs report underlined expectations for a rate hike by the Federal Reserve at its upcoming meeting but concerns rose after the report showed wage growth had stalled.

The dollar was a touch lower against the yen, with USD/JPY dipping 0.12% to 113.34.

The euro pushed higher against the dollar, with EUR/USD rising 0.21% to 1.1799, while sterling fell to an all day low amid comments on the Brexit deal from British Prime Minister Theresa May to Parliament. She said nothing would be agreed on until everyone agrees and stayed committed to an open border between Northern Ireland and Ireland. She added the the UK would pay its fair share of commitments to the EU.

GBP/USD slumped 0.25% to 1.3359.

Meanwhile, the price of the digital currency bitcoin surged following the launch of trading of the first U.S. bitcoin futures. Cboe started trading the digital currency on its Futures Exchange on Sunday. The cryptocurrency futures surged over 20% within hours of launching, causing a temporary outage to the trading website. The futures price has already surged over $17,000.

On the U.S.-based Bitfinex exchange, Bitcoin was last at $16,343.00 after rising as high as $16,710.00 earlier.

Larger exchange CME Group (NASDAQ:CME) will begin initial listings of bitcoin futures contracts on December 18.

This App is Trying to Predict the Bitcoin Bubble Bursting Using AI

A provocative new app, Bitcoin Bubble Burst, promises to keep its users ahead of what seemingly everyone, at some point, has predicted: the bitcoin apocalypse when prices plummet. Can vaunted artificial intelligence and neural networks produce predictive models useful enough to save fortunes?  

Also read: Reddit’s /r/btc Reaches 100,000+ Subscribers 

This App is Trying to Predict the Bitcoin Bubble Bursting Using AI

Predicting a Coming Bubble Burst

“The idea came from discussions we had inside the team about whether the bitcoin bubble will burst soon, or will the value keep rising,” Saad El Hajjaji, one of the team members, told Digital Trends. “Since it’s a topic that many people are interested in, we thought it would be good to try and predict the changes before they take place, so that you always stay in the loop.”

Bitcoiners are stocked up on a variety of price tickers, using exchanges from all over the world. These apps can tell what the price is but offer scant help in what the price might be in the future. And with the notorious volatility swings, some in the space are probably starting to get nervous as to the best time to exit.

What many newer investors have trouble understanding is an inverse reciprocity to trading. For every bitcoin purchased, unless mined, someone is willing to sell. Each is communicating. And while there’s no process to fully divine what someone on the other end of that transaction might be thinking, it’s fair to assume time preferences are different.

Depending upon goals and desires, it’s hard to exactly tell who comes out on top in the end. For most observers, the metric is future price. If it goes up and fails to retrace, the purchaser won. If the opposite happens, of course, the seller escaped disaster. A bubble happening, a massive sell-off, might not be all that bad for longer-term investors. In fact, some might see it as a discounted buying opportunity.

Using Artificial Intelligence to Predict Bitcoin's Bubble Burst

AI, Machine Learning, TA

Technical analysis (TA) has its own vocabulary, and learning its ins and outs can be headache inducing. It also hasn’t produced much, arguably being no better than chance when it comes to sussing out market vagaries.

Nevertheless, Bitcoin Bubble Burst is a mobile app linked to users’ email (they’re working on SMS), and it purports to rely on artificial intelligence, machine learning – bots it claims – to scour social media, exchange data etc, aggregating information in order to predict a coming burst in bitcoin’s price.

Other apps in the space function as basic price alerts. Products such as Bitcoin Checker, Bitcoin Ticker Widget, Blockfolio Bitcoin, and Bitcoin Price IQ, are just a few already tested and working. Set certain targets, and alarms will ring on your phone when they’re hit.

“Bitcoin Bubble Burst’s creators are careful about the nature of the alerts they send and allegedly won’t just send non-stop sell order advice,” reports Russia Today.

The app’s secret sauce is still tightly proprietary, under wraps. Exchanges referenced are not known. It appears to value Twitter chatter, according to reports, and that comes with its own challenges. The app’s public relations team’s usage of phrases such as “artificial intelligence” and “neural networks” are mental cocaine in times of crypto price panics. Just remember, bitcoin was frothy back in the thirty dollar price range, and managed to be both a bubble and undervalued at the same time, something a bot might not understand.

What are your thoughts on machine learning and AI predicting price fluctuations?  Let us know in the comments section below.


Images courtesy of Pixabay.

Parity Calls for Ethereum Hard Fork to Reverse $230 Million Bug

Hard forks to reset a cryptocurrency to a previous state can be very contentious, tearing apart communities of supporters into warring factions. Ethereum already underwent such a scenario after the DAO debacle, creating a precedent, and now Parity is asking for a hard fork. 

Also Read: A Hacker Gained Access to the Bitcoin Gold Windows Wallet Github

You Need a Fork to Squash a Bug

Parity Calls for Ethereum Hard Fork to Reverse $230 Million BugThe team behind Parity Technologies, the developers of the Parity multi-signature wallet, have called today for a new hard fork of  ethereum in order to solve the consequences of a recently found bug in the code.

In a blog post about the subject, the Parity team mentioned past issues that plagued ethereum, and tries to cast their recent incident as just another example. They fail to mention that more than half a million ether, worth over $230 million in current prices, were involved in this particular case.

They write: “All of these funds are provably non-recoverable without a change in the blockchain’s state, opcode upgrades or consensus rules modification….No one should be under any illusion that unlocking these stuck funds would be anything other than a rescue operation – and would only be possible with a hard fork.”

Three Options

Parity Calls for Ethereum Hard Fork to Reverse $230 Million BugThe Parity teams lists three possible courses of actions at this point in time. The first would allow private key holders affected by certain issues to withdraw their ether as suggested by Vitalik Buterin. This approach, they say, will not cover the funds frozen in the Parity wallets because the relevant contract still contains code.

A second solution would be an address-specific recovery. They explain that this focuses on capturing as many edge cases as possible but is not tightly defined.

The third solution, suggested by Parity, is a change to the protocol which would allow the revival of ‘suicided’ contracts. They anticipate that this proposition will lead to a lot of disagreements but hope that the community will eventually get behind it.

Is a hard fork a legitimate solution to hacks, bugs and other issues? Share your thoughts in the comments section below!


Images courtesy of Shutterstock.