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Ethereum Hard Fork

Instructions for the Ethereum Hard Fork have been posted on the Ethereum blog. Voting has begun and the final tally will take place at block 1894000, slated for around 9am GMT on July 16th, 2016. Kraken has announced they will suspect ETH trading an hour before and an hour after the hard fork. They have not taken a position on the fork itself.

The community has debated this topic at length, and the result has implications for Ethereum’s future. Many expect the community to implement the hard fork.  At time of writing, the hard fork had over 80% support, and many prominent community members have spoken out in favor of both the hard fork itself and the community process about the hard fork.

Ethereum Hard Fork Voting-01

There has been confusion among the broader community about a “soft fork” relative to a “hard fork.” Soft forks are voted on just by miners and are backward compatible, meaning all clients who don’t implement it can still participate in the chain. The miners decide, the users follow. It’s ‘soft’ because it doesn’t break the cryptographic hash. The previously proposed soft fork would have isolated the stolen DAO funds, but Hacking Distributed pointed out that the soft fork would leave Ethereum vulnerable to DOS attacks. This presented the community with another dilemma in the DAO Wars, and the soft fork was abandoned.

A hard fork instead introduces multiple competing blockchains, with users (miners, wallets, services, token-holders) deciding which one to support. There would be no official end to either blockchain, but presumably, one would get abandoned. In terms of governance, it’s majority rules followed by a form of consensus in which the minority blockchain chooses (or not) to concede and join the winning blockchain. The hard fork will allow the return of all DAO ETH funds to their original owners.

What Happens to the Funds?

A hard fork has been cast as the more democratic decision-making process, though it remains controversial. After initially expressing support for the hard fork, Vitalik Buterin has encouraged the community to decide. He has focused on the implementation of a potential hard fork:, such as when funds become available and how they are returned to their original owners.

The Ethereum blog post lays out the process for recovering the funds. At block 1920000 (around July 20/21), all funds will be transferred to this address, and DAO tokenholders can submit DAO to withdraw ETH at a rate of 1 ETH per 100 DAO, which was the going rate for DAO tokens during the first 14 days of the DAO’s ICO back in April and May 2016.

 

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