On February 2nd, the ethereum community was stirred by Dan Phifer’s Etherium Improvement Proposal (EIP 867) on amendment to the etherium blockchain to allow recovery of lost funds.  Phifer is a developer from Musiconomi who lost his ether last June due to a hack on Parity Ethereum client.  The etherium core team and code editors were in disagreement initially on issue of legal concerns.

The community was further shocked when Yoichi Hirai, one of etherium’s code editors, resigned amid of the heated exchange in github and over legal concerns. Hirai stated that the proposal could be violating Japanese penal code on unauthorized creation of electromagnetic records.

What is EIP 867 All About?

According to the proposal submitted by Dan Phifer on etherium’s github, there should be an irregular state change implemented on the specific blockchain in order to address fund recovery scenario that cannot be addressed by standard protocol. In layman’s term, he is proposing a dispute process for lost funds where a certain group of “qualified” individuals within the ethereum community would act as “jury” to approve certain fund recovery request special protocol and implement such changes to the blockchain.

This was met with a lot of criticisms from some of the top guys in the community. Furthermore, since github is an open community for open source discussions, a lot of users have weighed in on the issue. Up to 80 of them were against the proposal.

What is the Criticism All About?

Most of the github users and members of the ethereum community who oppose EIP 867 are hard core open source and distributed ledger technology enthusiasts. They are saying that putting the power to decide to a few individuals on fund recovery cases in ethereum world defeat its purpose of having a “decentralized” system and would essentially create an “authority,” a principle that is vehemently rejected by a “trustless” community.  Some even went to the extreme that ethereum users will start to be lazy in verifying smart contracts and instead just submit ethereum recovery proposals.

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What Should the Etherum Core Team do?

The ethereum community has all the valid concerns about EIP 867 on the structure of the proposed solution.  It sounds like Dan would like to take a short cut to recover Musiconomi’s lost ether.  Ethereum core team instead should think what solutions should be implemented to prevent similar incidents to happen.  Distributed Ledger Technology’s original intent is to empower end users and remove intermediaries as much as possible.

Creating a “dispute process” where a few individuals get to decide which disputes are valid or not removes that end user empowerment.  Hacking incident is a security issue and should be addressed properly and should not shake its core principles.  With etherium’s smart contracts, the ethereum community and users should be empowered to conduct their own checks to prevent losses.

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