Wrote on his Twitter profile that EOS will become the root cause of a major exchange hack at some point by the end of next year. He said:
“I’m calling it: there will be a massive exchange hack within the next year, taking advantage of an EOS vulnerability. That exchange will lose its hot wallet. If it uses its arbitrators to reverse the hack, the contagion will spread downstream. There will be threats of lawsuits involving the devs and the [block producers]. Twitter lawyers will point out the absurdity of the EOS constitution, or any document not grounded in actual law.”
The threat of an EOS’s security flaw, according to Sirer, is very real. By taking advantage of EOS vulnerabilities, hackers will be able to capture the hot wallet of an exchange, thereby accessing the EOS within and trading it for other tokens via downstream exchanges.
Should EOS leverage arbitrators in order to reverse the hack, Sirer predicts the proliferation of lawsuits aimed at EOS developers. The issue with EOS’s security, states Sirer, is its governance model itself,
“Exchanges have not yet figured out that EOS’s governance model does not mix well with other currencies. EOS folks will blame others, and they won’t be entirely wrong.”
“That exchange will lose its hot wallet. Hackers will send the proceeds to downstream exchanges, where they will trade into other coins.”
Emin also clarified that his prediction is not based on any specific vulnerability that he has discovered. Instead, he said, the exploit of such nature is unavoidable due to the way developers handle and fix safety critical bugs. Speaking specifically about the handling of recent bug that halted EOS’s blockchain he said:
“You can’t incrementally patch your way to correctness. In the same vein, you can’t start out with some bricks, beams and cables over a body of water, patch the holes where cars fall into the ocean, and end up with a load-bearing bridge.”
Sirer, however, notes that EOS’s reliance on block producers to arbitrate disputes, could potentially disrupt exchange trade:
“… conversions from EOS to other cryptocurrencies, which are bearer instruments in contrast, is fraught with risk. If the EOS trade is unwound, the exchange might be out the crypto it traded for EOS, taking a substantial loss.”
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