Parity Technologies Proposes Solution to Frozen Ethereum Wallets

Parity Technologies, the developer of a multi-signature Ethereum wallet, has released a statement proposing solutions for a code problem affecting some of their clients’ accounts. The bug, or possible hack, made completely inaccessible more than 500,000 ether, worth around $268 million (€227 million), held in Parity wallet accounts.

https://twitter.com/ParityTech/status/940160464880898048

London and Berlin-based Parity claims the problem with the frozen wallets is to due to multiple factors, including “issues with client usability, problems with codebase maintained by both private entities and the Foundation code, the unexpected emergence of a competitor network, and plain user error.”

The company offered three solutions to the problem. One involved using the Ethereum Improvement Proposal 516, which would allow for the recovery of ether only from the accounts in question. The second solution is described as “address specific,” and would allow the recovery of ether and tokens. While straightforward and not “chang[ing] the semantic behaviour of the EVM,” the second option would be subjective and “require those that ‘hold the pen’ to define its scope.” The last solution proposed, and the one recommended by Parity, is a “change to the Protocol” of Ethereum.

Given the controversy surrounding the DAO back in July 2016, and the ensuing creation of Ethereum Classic, resorting to a hard fork to solve the problem with Parity’s wallets will likely be controversial within the Ethereum community. Parity’s statement acknowledges that the suggested Protocol change would be nothing “other than a rescue operation — and would only be possible with a hard fork.”

Vitalik Buterin of Ethereum said that it would be up to the community to decide what to do.

https://twitter.com/VitalikButerin/status/940410361781501960

Hudson Jameson, who assists with Ethereum’s core development team, said that the issue would likely be brought up at the next development meeting on 15 December.

https://twitter.com/hudsonjameson/status/940462524889161729

A discussion about the topic is currently being held at Gitter.