One of the most powerful aspects of Ethereum, and other crypto systems, is the ability to use smart contracts. These contracts are essentially computer ‘protocols that are designed to create contracts that are either fully, or at least partially, self-executed and self-enforceable.
The perk is that you can create digital contracts with other parties, and not need a third party to be involved at all. This will save a lot of time, eliminate vulnerabilities of additional people being involved, cut lots of expenses, and offer many other benefits too. Ethereum has grown to where it is today primarily because it allows smart contracts, and does a pretty good job at it.
Unfortunately, as with any computer system, smart contracts are only as good as the people who code them in. According to a recent review from Motherboard, there are as many as 34,200 smart contracts that are being used today that have serious coding bugs within them. Some of these bugs are putting the currencies involved at serious risk.
The most public example of this to date is when more than $150 million in cryptocurrency was permanently, and irreversibly, ‘locked up’ by someone who accidently destroyed a smart contract he shouldn’t have had access to. This was just a regular person who was playing with the system, which should be fine, and had more access than he should have due to poor security. The individual, known as DevOps199, didn’t have any more access than you or me, but just happened to be poking around and discovered the flaw.
There are many of these types of issues out there, and while people are constantly working at identifying them and patching them, it is still a huge concern. Not only does this put the money of millions of crypto-investors at risk, but it hurts the whole eco-system. If people are thinking about getting involved with crypto, they are going to be very hesitant when they learn about how insecure many things can be.
While these flaws aren’t an issue with blockchain, or any specific crypto, they are still something that needs to be addressed sooner than later.
