The Decentralised Autonomous Organisation or “DAO” was launched in April, using a non-physical digital currency, or “cryptocurrency” , known as Ether – which is even more advanced than Bitcoin. A team of “white hat” hackers has launched a counter-attack to prevent further draining of millions of dollars from a computer-controlled investment fund .
Last month, it raised an enormous $150 million (£101 million) fund from a sale of “DAO tokens” – which are essentially shares in the organisation.
The underlying computer protocol that records all transactions made with the DAO is known as the Ethereum blockchain, and can also be used to execute certain computer programs.
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Just weeks after the initial sale, a bug in the computer code that operates the DAO was exploited by hackers, who were able to drain cryptocurrency belonging to its members. At the time, this was worth an estimated $50 million (£33 million).
This resulted in frenzied debate among DAO members and commentators as to the best course of action to stop the attack.
Yesterday, having detected a similar new attack on the DAO, a team of self-styled “Robin Hood” hackers comprised of members of the Ethereum development community launched a counter cyberattack, to try and rescue the remaining DAO funds.
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The counter attack appears to have been successful, with the developers reporting the recovery of 7.2 million Ether (roughly $100 million dollars or £67 million) from the DAO.
What’s unclear is whether the DAO as an entity will survive this digital civil war. At present, the future of the fund is in a state of flux.
Speaking on Twitter, Alex Van De Sande who is the lead designer at the Ethereum Foundation, said he might write a “thriller story” based on recent events.
One day I hope to write up thriller story behind these last few days. But for now, there’s this: https://t.co/atjnBXjy5V
— alex van de sande (@avsa) 21 June 2016
They still hope to recover the initial stolen funds from the attacks in April.
In a Reddit update about the attack, Van De Sande warns the hackers that “we are coming for you.”
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No central authority
The rescue of funds from the DAO has not been as simple as it might have been from a traditional investment fund. The white hat hackers couldn’t simply change the password, or shut the door.
This is because the DAO is very different from a traditional investment fund. It doesn’t have a physical presence, it exists purely as computer code distributed across the computers of its members.
Its creators intend it to operate without a central authority – i.e. fund managers, directors or, in fact, any human intervention.
The events of the last two days bring into question whether computer code written by humans can ever be free of the “human infallibility” the DAO’s creators sought to avoid.
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