By 
Feb 27, 2018
Should Ethereum users be given the option to recover their funds when sent to a wrong destination? And should the Ethereum community of developers be responsible for that action? And if they aren’t, whose responsibility would it be to prevent breaches?
Whether it’s a faulty code, a human error or the result of a hack, these are the questions making headlines recently, sparking some real debates. In 2017, an Ethereum-based startup, Parity, witnessed a deadly hack that stripped the platform to the tune of about $160 million. With such a huge blow and the fact that the crypto world was sure of the presence of such occurrences in the near future, it was only natural that the developer community would come out with solutions.
The Birth of the Ethereum Improvement Proposal #867
Source: Altcoin Buzz
The Parity breach affected many, and Musiconomi, a musical economy built on the blockchain, after losing everything, decided to find a solution – so future breaches don’t occur. Dan Phifer, a developer at Musiconomi and TaP Trust developers conceptualized the Ethereum Improvement Proposal (EIP #867), an offer to develop Ethereum Recovery Proposals (ERPs), that would not just amend the Ethereum blockchain, but also redistribute address balances so that lost funds can be recovered easily. This new change would require users to upgrade their system to accommodate the version with redistributed account balances.
The rejections were enormous
This proposal was met with vehement rejections, not just from the cryptocurrency development community, but from three main figures in charge of managing the ethereum blockchain: Yoichi Hirai, Vitalik Buterin, and Hudson Jameson. For Hirai, such a proposal goes against the philosophical principles of ethereum and, in a blog post, strongly made his point that he “is not going to move a finger for a protocol change affecting particular accounts”. To the developer, the reason why Ethereum was developed was to remove that single trusting party, adding that such a move goes contrary to the Japanese punitive code on the “Unauthorized Creation of Electromagnetic Records”.
As a developer working in community management at Ethereum and a technical member at Parity, Afri Shoedon added his voice in support of the proposal made by Phifer and also expressed his discomfort with Yoichi Hirai’s comments. (shown in the image below).
Afri Shoedon then entreated Hiroi to resign as an EIP editor in a tweet; “I hereby publicly request @pirapira to step down as EIP editor. If you openly oppose a proposal then assign another editor and start a campaign elsewhere. The proposal is up for discussion, and that is perfectly fine. But such comments do not contribute to the process in any way”. This tweet was met with positive response from Hirai, leading to his resignation as an EIP editor, sparking the subsequent closure of the proposal. The closure of the original proposal was a winning fight for many of the Reddit Community on Ethereum, with a user referring to the decision as a “big win for the Ethereum Community and network”. Little did we know that the closure wasn’t the end of the story.
The reopening of the EIP # 867 sparks more rejections.
With a new version of the #867 proposal, a lot of users have come up with strong rejections, stating their views on why a recovery system shouldn’t be the work of developers. A user named oxidizer referred to the proposal as a “Trojan horse for Ethereum”. This user believed that such move would undoubtedly create potholes in the Ethereum blockchain.
Another GitHub user named Aribo went further to elaborate on why this is against the philosophy of Ethereum, adding that such a move isn’t the responsibility of the developer community. This is how Aribo kept it “Instilling the recovery of funds as a necessary function of the system is IMO misunderstanding the function of the system. Ethereum is not a bank or a private company that has profits/losses and investments. If someone loses money in the economic system created within Ethereum is at its own peril, and it never should be the function and responsibility of the system, and thus its developers, to allow the recovery of these funds and, even less, build the rules/standards for this to happen.”
Isn’t it time to conceptualize a solution?
Putting the Parity attack aside, the 2016 DAO hack was an equally disturbing encounter that saw users losing 3.6 million Ether. Though such a breach was reversed through an update, the development community was not happy about such a recovery move, with fears of a possible loophole in the entire Ethereum blockchain. This debate gave birth to the Ethereum Classic, which was a hard fork off the Ethereum blockchain. with these breaches, shouldn’t the developer community come out with a solution already? Or look at the proposal?
What do you think should be done?
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Yes. One of the issues about the internet over time is the security of information and funds. EthereumNetwork should have create a strong and better security around their network. I am also a victim of this circumstance right now which i am still facing.
No. The network should NOT be responsible for recovering lost funds caused by external entities. The external entities are responsible for their clients. Maybe it will force external entities to test their software to minimize the probability of breaches. The DAO was warned about the sloppy code far in advance of the breach. Thus the DAO was responsible. The Parity breach is the responsibility of Parity. If someone broke into a bank today and stole all of the customers’ money, the fault doesn’t lie with the DOLLAR nor the Federal Reserve. The fault lies with the bank and it is… Read more »
Whenever you send money to a different bank account, either locally or internationally, the banking institutions involved solves any issues that come up and not the Federal Reserve – That’s correct. And that’s because the Reserve is only responsible for producing the Dollar, it doesn’t go as far as regulating how the money is spent or who sends what. In the case of Ethereum, they are totally different. Your exchange platform or your wallet only ensures that you have a platform to make use of your cryptocurrency. But the Ethereum Network still controls how Ether travels from one address to… Read more »