Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
The best art always retains modern relevance. And so it proves with this excerpt from an Irishman. One of the main benefits of using a public blockchain is that no one entity controls the system. Similar to the internet, if one part is closed or disappears, it’s possible to continue. That’s why it was interesting to see just how decentralised the main public blockchains actually are. Ethereum does well out of this comparison: it has the largest number of nodes by far and has no one entity controlling 50% of the network. This is vital because if any of those entities were to be corrupted somehow, they cannot force their view of the blockchain and essentially steal the currency by generating fake transactions.
But a severe test of the decentralised nature of Ethereum is currently underway: it’s the latest attempt to recover the lost ETH from the Parity hack last year. A new Ethereum Improvement Proposal (EIP-999) was created that is simple: as part of the next planned Ethereum fork, rollback the destruction of the offending library and allow those who had ETH in the affected wallets to access the funds once more. Technically, this is a simple thing to do. Politically, the larger Ethereum community is up in arms. The idea drives a wedge between those who feel that public blockchains must be immutable and unchangeable, and those who see it as a tool for running decentralised applications. It’s between those who feel governance is important, and those who feel no governance is exactly what makes public blockchains so attractive.
Personally, I view it as a moral hazard. We all know about the financial bailouts to banks across the globe and the anger they generate. That was a complex situation that will take decades to understand and learn from. But the main reason why people were angry was the unfairness of it all. Why did those people get rescued from their own incompetency? Why them and not me? Human beings are finely attuned to sense and dislike unfairness from a very young age. EIP-999 is another example of this unfairness. Why do they get their mistake removed from history? What makes their problem so special? How is Ethereum considered decentralised if this proposal goes through?
There have been previous proposals to unwind mistakes but all have been found to open up avenues for malicious exploitation. I think the ultimate nature of the blockchain as set out by Satoshi Nakamoto back when he devised the Bitcoin system prevents any such rollbacks deliberately. He/they knew it was the only way to create the trust required for digital currencies to work was to have these rules that, once set, could never be reversed. I hope the proposers of EIP-999 will work this out before they do too much damage to Ethereum.