I interviewed Joseph Lubin, cofounder of Ethereum, the hottest blockchain network next to Bitcoin, on stage at the Web Summit tech conference in Lisbon, Portugal, this week. While we chatted, the world learned that hundreds of millions of dollars worth of Ether, the very much in vogue cryptocurrency Lubin helped launch in 2015, had effectively been vaporized.
The calamity was supposedly an accident. A self-described novice programmer going by the online alias “devops199” took control of a library of code used by certain digital wallets built by the Parity project, a group of crypto programmers. The code was hosted on the Ethereum blockchain, and it enabled multi-signature protection for cryptocurrency storage, where multiple keys are required to withdraw funds. Once the supposed amateur realized his coup, he executed a “kill” function that deleted the key bit of code—thus freezing accounts indefinitely. He rendered as much as $300 million in Ether inaccessible.