Investors in a “smart contract” built on the Ethereum blockchain platform may have lost cryptocurrency worth millions of dollars because they missed a loophole in the contract’s fine print.
The contract was written in Ethereum’s Solidity programming language, and the fine print was the code that set out the rules for investing in, operating, and withdrawing from a crowd-sourced venture capital fund called The DAO (The Distributed Autonomous Organization.) .
Ethereum, like other blockchains, is a distributed public ledger, or record of transactions. Where the bitcoin ledger records bitcoin transactions, the Ethereum blockchain records transfers of a cryptocurrency called Ether. But there’s more: Ethereum is also a platform for running smart contracts. Its creator, the Ethereum Foundation, describes smart contracts as “applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.”