Out of the Ether by Matthew Leising

Out of the Ether

The Amazing Story of Ethereum and the $55 Million Heist that Almost Destroyed It All





Matthew Leising



Wiley Logo


For Rebecca, my life, my love. You always believed I could do this when I'd convinced myself otherwise. For that, you have my undying gratitude and thanks.

Cast of Characters

Ethereum Cofounders

  • Vitalik Buterin – Ethereum inventor, ringleader, onetime fashion maven, and lover of bunnies
  • Anthony Di Ilorio – Created Toronto's first Bitcoin meetup, early and important investor in Ethereum, later pushed out in a power struggle
  • Charles Hoskinson – One of the first five cofounders, wanted to lead the project from the start, fired after six months for abusive and manipulative behavior
  • Amir Chetrit – Met Vitalik in Israel working on colored coins project, unclear what he contributed to Ethereum, fired for lack of commitment
  • Mihai Alisie – Cofounder of Bitcoin Magazine with Vitalik, helped set up Ethereum's Zug headquarters, business development
  • Gavin Wood – Architect of Ethereum, C++ client creator, a bit prickly, took Vitalik's vision and made it real
  • Jeff Wilcke – Created Ethereum's Go client, sided with developers on power struggle question
  • Joe Lubin – Early and important investor in Ethereum, former software developer and Wall Street software engineer, true believer, user of strange words, founder of Ethereum development studio ConsenSys

Other important early people

  • Roxana Sureanu – Helped get Bitcoin Magazine off the ground, willing hardscrabble traveler, turned the Spaceship House from a dwelling into a home
  • Stephan Tual – Ethereum evangelical, ran marketing for the project, has the gift of gab, one of three founders of slock.it, added to Ethereum leadership after Zug purge
  • Christoph Jentzsch – Helped debug Ethereum code in run up to 2015 launch, theoretical physicist by training, co-founded slock.it, really wishes he could revisit line 666 in the DAO code
  • Mathias Grønnebæk – Helped establish Zug headquarters, reader of tax laws, worked for Charles Hoskinson, helped craft Ethereum Foundation business plan
  • Taylor Gerring – Helped secure Bitcoin raised in Ethereum crowdsale, taker of many photos, added to Ethereum leadership after Zug purge
  • Anthony D'Onofrio – Designer and software developer, helped improve early Ethereum web site, took drugs, saw future, one of the few people Gav Wood likes
  • Emin Gün Sirer – Blockchain pioneer, first to use proof of work to back a digital coin, Cornell associate professor of computer science, called unsuccessfully for a moratorium on the DAO then found the DAO bug and dismissed it
  • Peter Vessenes – Bitcoin pioneer, tangled with the Bitcoin Foundation, pointed out smart contract security issues
  • Ming Chan – First executive director of the Ethereum Foundation, whipped it into shape to keep it within its means, Vitalik favored her though she rubbed many the wrong way

Badass blockchain ninja warriors

  • Alex Van de Sande – Known as avsa, helped marshal the Robin Hood Group from his apartment in Rio, co-developed the Mist wallet, excellent husband, the one who pushed the button to start the DAO counterattack
  • Griff Green – The Mayor of Ethereum circa June 2016, hugger, visionary, driver of the RHG, slock.it's first employee, wants a sick jump shot but it's just not happening this time around
  • Fabian Vogelsteller – tech whiz who helped the RHG prepare to fight the ether thief, co-developed Mist wallet
  • Lefteris Karapetsas – coding guru, replicated DAO attack in a few hours
  • Jordi Baylina – helped the RHG drain remaining $4 million of ether from the DAO, coding genius, Spanish freedom fighter

Other really important early people

  • Dmitry Buterin – Vitalik's dad, supportive father, hater of communists
  • Natalia Ameline – Vitalik's mom, patient mother, adventurous spirit
  • Maia Buterin – Vitalik's step mom, patiently waited for Vitalik's cooking

Important people who helped Ethereum go mainstream

  • Amber Baldet – Hands-on builder, coder, vital within JPMorgan to link Ethereum to its in-house Quorum project
  • Christine Moy – Amber's first hire for Quorum within JPMorgan, finance master in all areas of the bank
  • Patrick Nielsen – Hired by Amber at JPMorgan, solved the privacy issue for the bank that gave birth to the Quorum ecosystem
  • Marley Gray – Microsoft director of blockchain and distributed ledger business development in 2015, lover of Andrew Keys, delivered on Microsoft's vision of “a growth mindset” by linking up with Ethereum
  • Alex Batlin – Ran UBS Labs, a fintech-focused unit at the Swiss bank, instrumental in creation of Enterprise Ethereum Alliance
  • Jeremy Millar – ConsenSys executive who helped create the EEA after realizing competition from R3 and IBM were real and needed a response
  • Andrew Keys – One of the first ConsenSys hires, worked for free, loaned $100,000 to the Ethereum Foundation to ensure Dev Con 1 took place, great explainer of complicated things


The future was broken.

Every person in this story I'm about to tell you knew this. Felt it in their bones. Their views were well known and widely shared, yet nothing ever seemed to change. Capitalism was destroying the planet. Income inequality kept tightening its grip. Tech behemoths like Google, Apple, Amazon, Facebook, and Twitter owned the public square, where once all you needed was a soapbox to voice an opinion. Now any of these monopolists could censor you or shut you down for even clearing your throat. Human beings had ceded their organizing power to corporations that saw them as data to be harvested and sold. The grievances were long and detailed, and yet not many of these people could put their fingers on a way to effect change.

The future was broken.

A global financial crisis had robbed a generation of a decade of productive employment opportunity. The recent graduates in this story who looked out over the years ahead of 2008 saw no hope for economic growth, only job cuts and shrinking industries. The banks that created the fiasco, though, they got off. Hell, they saw their stock prices soar in the years after 2008 thanks to an unspoken but very real US government guarantee – take all the risk you want, we'll be here to bail you out when necessary. The people who lost their homes? Not so much. They'd have to fend for themselves.

The future was broken.

The Canadian philosopher Marshall McLuhan, a giant in media theory who changed the way we look at popular culture, warned us in 1967: “How shall the new environment be programmed now that we have become so involved with each other, now that all of us have become the unwitting work force for social change?” he wrote in The Medium Is the Message. “All media work us over completely. They are so pervasive in their personal, political, economic, aesthetic, psychological, moral, ethical, and social consequences that they leave no part of us untouched, unaffected, unaltered. The medium is the message. Any understanding of social and cultural change is impossible without a knowledge of the way media work as environments.”

Fifty years after McLuhan wrote those words, another writer had also been at work. Here was a rare individual, someone able to put a finger on the dystopia that sprang from so much concentration – concentration of power, of wealth, of media. All of it originated from centralization. The gatekeepers kept making the gates higher and higher and more and more costly. But what if we could create a system without gates, without a central authority and the power to say what is permissible? What if, the people in this story asked, the organizing principle instead was flat and distributed and no one had enough control to stop anyone else?

That's the idea Satoshi Nakamoto gave to the world in the fall of 2008. The creator of Bitcoin had seen the future, knew it was broken, but also knew it could be different. Bitcoin would fix the future, and it would change so much more than how people thought about money. It gave these disconcerted characters the elusive thing they sought – the key to unlock it. Blow up the center. Destroy the middleman. Take the power back. That was the idea, anyway.

And while this story must start with Bitcoin, it is not about Bitcoin. It's the story of what came next. It's about going beyond Bitcoin to use technology to build even more powerful connections among people. It's the story of Ethereum, a global network of computers known as a blockchain invented in 2013 by Vitalik Buterin, a Russian-Canadian genius who'd yet to celebrate his 20th birthday.

Buterin married the digital money aspect of Bitcoin to the almost unlimited capabilities unleashed by what can be written in computer code. If you think about it in terms of contracts, just about everything I can think of can be boiled down to a written contract. Certainly, legal documents, but also financial transactions, commerce, global trade. Now you could take those contracts and in a sense digitize them by bringing them to life on Ethereum's global network. Once there, they could be accessed by anyone in the world at any time of day or night. There's a money feature embedded in Ethereum too, so you can pay for stuff. And it all takes minutes rather than the days, weeks, or months to complete common transactions in the industries I just mentioned. The efficiency gains are on par with what the Internet provided us in the early 2000s.

At its most valuable, the Ethereum network was worth an astounding $135 billion. Its creators became billionaires and millionaires. Ethereum is – slowly – changing the way finance and mainstream corporations think about the myriad tasks they do behind the scenes to make the world work. This is the story of the people who brought Ethereum to life, and how they changed the world.

But it's also about a $55 million heist that threatened to bring Ethereum down. The DAO attack, as it's known, is one of the strangest tales of thievery I know. A group of good-guy hackers who called themselves the Robin Hood Group fought a ninja war on the blockchain to prevent hundreds of millions of dollars from being stolen. Against them was a malicious but ingenious attacker who for the most part remains unknown to this day. And finally, it's about my effort to find out who did it, to unmask the ether thief.

Part I

It is the business

of the future

to be dangerous.

– A.N. Whitehead