The DAO hack kept the crypto community on tenterhooks in 2016. A hacker stole several million euros worth of Ethereum.
The DAO hack at a glance
Worth knowing about the DAO hack in 2016:
- The DAO hack refers to the theft of over 2 million ETH (Ethereum; ETH) tokens worth around $50 million from the decentralised autonomous enterprise (DAO) in 2016.
- The DAO hack was enabled by a vulnerability in the smart contract implementation of the DAO system.
- The hack was carried out by one or more attackers who exploited the vulnerability in the code to siphon Ether from the DAO system.
- According to Forbes, the hack was carried out by Austrian Toby Hoenisch. The latter has so far vehemently denied the heist, although much evidence does not exonerate him.
The aftermath of the hacker attack
The DAO hack did not leave the Ethereum and crypto community without worries
- The hack caused a split in the Ethereum community, as some members voted for a hard fork to recover the stolen Ether, while others saw it as a violation of Ethereum’s decentralization principles.
- The hard fork led to the creation of Ethereum Classic (ETC), a fork of Ethereum that did not recover the stolen Ether.
- The DAO hack was a (negative) milestone in the history of cryptocurrencies and led to an intense discussion about the security of smart contracts and the role of hard forks in decentralised networks.
- The hack highlighted the importance of security audits and thorough code review when developing smart contracts.
- The DAO hack led to increased awareness of cryptocurrency risks and contributed to the development of security measures and best practices in the industry.
- The DAO hack also had an impact on the price of Ethereum, which briefly fell sharply but later recovered.
- The DAO hack is an example of how important it is to continuously improve the security of cryptocurrencies and blockchain systems to prevent such incidents in the future.