Who's Afraid?
Recent discussion around the ongoing distributed denial of service attacks (DDOS) for the Ethereum platform has prompted me to consider who may have interests in destabilizing the second largest crypto-currency after Bitcoin. Here is a link outlining today's remediation activity to address the DDOS and actions needed:
https://blog.ethereum.org/2016/10/18/faq-upcoming-ethereum-hard-fork/
Who would be causing these issues? The short answer is we don't know - given the generally anonymous nature of DDOS attacks, unless someone or some entity actually comes forward, this is all speculation.
As a disclaimer I am relatively new to this technology, and do not have a formal computer science background. However, I believe this technology is the future, and I want to learn and participate as much as possible. So here are my thoughts on possible interests against Ethereum in this case (and decentralized crypto in general):
- competing currenc(ies)?
- competing/centralized financial systems?
- anarchist interests?
Competing currencies?
As blockchain based technology becomes increasingly mainstream, opportunities to launch and promote competing 'alt-coins' become more attractive. The same individuals who successfully execute 'pump and dump' schemes with penny stocks, will no doubt be interested in the opportunities here. Hiring 'mercenary' hackers to make more established currencies less attractive, may help promote their own. Of course, there is a risk that breaking the system, would also damage their own value...so not too sure about likelihood of this one.
The Existing Financial Order (profit and government interests)
No doubt, the possibility of losing 'middle-man' status will cause some financial interests to cringe. However, the fact that most banks are stuck in maintaining legacy systems just to keep up with their 'established' product offer, makes me think they would be far too busy to try and actively disrupt the disruptive technology. More likely they would just try and buy the competition to calm their fears of competition. This of course shows lack of understanding at how dramatically decentralized autonomous innovation will change the economy.
They do understand how to navigate the regulatory landscape (entire departments are dedicated to this...probably more resources that on IT).
Speaking of regulators, and government in general, I would say decentralized finance is of great interest to them. So far their response (predictably bureaucratic) is to apply existing frameworks onto anything new - especially if it is not well understood. So if you trade digital assets that can be converted into 'cash' as a job, you must register as a 'Money Service Business". It will be interesting to see what regulators do if people outright skip the cash part, and meet their financial needs with digital tokens. Again, unlikely that government would actively disrupt blockchain technology (after all they could simply pass laws to stifle it, and spy on individuals using it). The underground economy has always been a known entity, and as long as the interested agencies can monitor it, they probably would tolerate it (may even prefer digital surveillance over the old-school man hours needed to monitor things). Umm and yes the tax code already is written to handle receipt of assets - so yes the Tax Man will not be avoided through use of digital tokens.
Got Anarchy?
Hmmm, well in a way decentralization seems like potential chaos - just waiting for the next big hack or bug to be exploited - but in fact what it really is doing is adding efficiency to human financial interaction (and potentially much more). As efficiency leads to behavior closer to truth and transparency, maybe the anarchist interests would actually prefer the traditional obfuscation filled and faith-based financial system...definitely there is more likelihood of bubbles, crashes, and collapse. So maybe they (the anarchists) are indeed behind attacks on decentralized innovation!
To Be Continued...
Like I said, nobody really knows. But I am glad to see the folks at Ethereum seem to have deployed a hard fork today which should work. Ten years from now, how will we look back on these early days?