Newspaper article International New York Times

Flaws Found in Fund That Uses Virtual Cash

Newspaper article International New York Times

Flaws Found in Fund That Uses Virtual Cash

Article excerpt

A group of computer scientists has asked the Decentralized Autonomous Organization, or D.A.O., fund to hold off on investing until its vulnerabilities are addressed.

A group of computer scientists released a paper on Friday describing a number of security vulnerabilities in a novel cryptocurrency crowdfunding project that has raised more than $100 million.

The authors of the paper argue that the money that has been put into the project, the Decentralized Autonomous Organization, could be frozen or stolen by attackers as a result of flaws in the way that the venture, known as the D.A.O., was set up. The money is all in a digital currency called Ether, which is a newer alternative to Bitcoin and exists entirely online.

The threats emerged on the eve of the organization's move from fund-raising to operational mode, in which it will evaluate proposals to fund experimental digital projects.

The D.A.O. is a sort of venture capital fund that will pick investments based on direct voting from investors. The entire operation is computerized, with no humans in charge.

The authors of the new paper are calling for the D.A.O.'s investors to hold off on considering any potential investments until the vulnerabilities are fixed.

"The current implementation can enable attacks with severe consequences," according to the paper, written by the computer scientists Dino Mark, Vlad Zamfir and Emin Gun Sirer.

Mr. Gun Sirer, an associate professor of computer science at Cornell University, has particular authority in the area because he previously was an author of a paper pointing out a serious vulnerability in the structure of Bitcoin, the most popular virtual currency.

Mr. Gun Sirer said in an email on Friday that his team had decided to release the paper on the D.A.O. this week so that investors "will not be subject to attacks when the fund-raising deadline is over."

Mr. Gun Sirer said he sent the paper to the programmers who wrote the code underlying the D.A.O., and to some of the so-called curators on the project, who will help guide decisions in the venture. Christoph Jentzsch, who wrote the basic code, could not be reached for comment via email on Friday. …

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