Ethereum’s Constantinople Hard Fork Delayed Due to Discovery of Critical Bug, ETH Price Drops Over 7%

Siamak Masnavi

On Tuesday (January 15th), Zurich-based blockchain security firm ChainSecurity announced that it had discovered a critical bug in Ethereum's code changes for the Constantinople upgrade that could leave some smart contracts vulnerable to attacks that could lead to loss of user funds. This means that the Constantinople hard fork, which was expected to be activated around 20:00 PT on January 16th (i.e. 04:00 UTC on January 17th) at block number 7,080,000, has had to be delayed.

ChainSecurity offers three types of services:

  • smart contract audits (based on its "proprietary audit platform");
  • a secuity audit platform (a set of "automated tools for developers and auditors" -- this takes a smart contract and its formal specification as inputs and produces a security report as the output; and
  • security monitoring ("ideal for exchanges and response teams") -- this type of monitoring "inspects smart contracts on-chain to ensure compliance and absence of security exploits".

ChainSecurity's Medium blog post, which was published around 16:00 UTC on January 15th, was titled "Constantinople enables new Reentrancy Attack." Here is the summary of the critical vulnerability that ChainSecurity had discovered:

"The upcoming Constantinople Upgrade for the ethereum network introduces cheaper gas cost for certain SSTORE operations. As an unwanted side effect, this enables reentrancy attacks when using address.transfer(...) or address.send(...) in Solidity smart contracts. Previously these functions were considered reentrancy-safe, which they aren’t any longer."

So, basically, ChainSecurity was saying that the implementation of one of the Constantinople's five main changes, Ethereum Improvement Proposal (EIP) 1283 contained a critical bug. This discovery led to Ethereum's core developers, as well as other key stakeholders such as Ethereum creator Vitalik Buterin, speaking via Zoom audio call and agreeing to delay the hard fork while they studied this issue, with a further meeting scheduled for this Friday to decide on a new fork date.

This is how the Ethereum Foundation announced (at 21:45 on January 15th) the news about the postponement of the Constantinople hard fork:

Ethereum Foundation's blog post had this avice for anyone running a node:

"Out of an abundance of caution, key stakeholders around the Ethereum community have determined that the best course of action will be to delay the planned Constantinople fork that would have occurred at block 7,080,000 on January 16, 2019. This will require anyone running a node (node operators, exchanges, miners, wallet services, etc…) to update to a new version of Geth or Parity before block 7,080,000. Block 7,080,000 will occur in approximately 32 hours from the time of this publishing or at approximately January 16, 8:00pm PT / January 16, 11:00pm ET / January 17, 4:00am GMT."

This blog post pointed out that "if you are a person who simply interacts with Ethereum (you do not run a node), you do not need to do anything." This includes smart contract owners (since "the change that would introduce this potential vulnerability will not be enabled").

As for those running an Ethereum node, it advised them to update their "Geth and/or Parity instances when they are released." (These new releases should become available by around 02:00 UTC on January 16th.)

At press time, according to CryptoCompare, ETH is trading at $120.15, down 7.31% in the past 24-hour period.

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Ethereum Co-Founders: Ether Can Be a Better Form of Money Than Bitcoin

  • Buterin and Lubin argued that ethereum can be a form of money if the community wants it to be.
  • Both co-founders agreed that ether has the potential to overtake bitcoin as a source of money.

Ethereum co-founders Vitalik Buterin and Joseph Lubin have argued that ether can be a source of money to rival bitcoin and fiat if the community wants it to be. 

Ether as a Form of Money

While Ethereum, which occupies the second largest cryptoasset by market capitalization, has long been thought of as a network-based platform, its co-founders believe its ether coin is capable of being viewed as actual money. Speaking on a panel at Ethereal Tel Aviv 2019, both Buterin and Lubin agreed that ether has the potential to match bitcoin as a source of money, depending upon the community’s needs. 

An audience member challenged the pair of co-founders to comment on ether's potential as a form of money, after pointing out that Buterin, in particular, appeared ready to “hand off money to bitcoin.” Instead, the audience member argued that a proof-of-stake, smart contract network like Ethereum could actually “emulate money far better than a proof-of-work hard cap money” such as BTC. 

Buterin was quick to reply, saying, 

Yea, ether absolutely can be money, if the community wants it to be.

Lubin jumped in to argue that while Ethereum has great potential as a source of money, it suffers from a complex narrative that has been difficult to quickly convey to institutional and early adopter investors. 

He said, 

That’s going to take time for [Ethereum] to show [investors] the value proposition of an essentially new kind of decentralized worldwide web.

Lubin argued that while ether “can be a better money than bitcoin,” BTC has managed to solidify itself to investors as the best store of value. However, he believes that Ethereum’s functional advantages as a token over bitcoin, in addition to intrinsic value, will lead to greater adoption as a form of money.

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