By now the news of the Parity hack has rippled through the Ethereum community. Several major projects including Edgeless Casino, Swarm City, and æternity blockchain were drained of millions of dollars worth of Ethereum.
Unequivocally, this is a disaster for the teams of these projects. The money stolen was earmarked to fund years of development along with infrastructure, travel, marketing, and all the other things that make a startup successful. With the loss of these funds, these teams are suddenly facing a much shorter runway and may potentially need to release a product much earlier than anticipated.
Disaster aside, this might be just what some of these projects need.
Tough Love
There has been rumbling within the crypto community for weeks about the excesses of new blockchain startups and their ICOs. The gluttony of crypto funding creates scenarios where a well-funded blockchain startup can sustain themselves for years without launching a viable product. Like a Kickstarter project, these massive ICOs raised expectations and created stretch goals that will likely indefinitely tie up projects in development hell for years. In comparison, many VC funded projects start small and obtain funding only after they've cleared particular milestones leading to product release.
Will these projects be more likely to succeed with a slimmer budget and shorter runway? Only time will tell but this is an inevitable reality now and maybe in five or ten years, after these projects take off for the moon, one of the members may look back and write about how this was defining moment that got them to stop partying with ICO money and get to work.
From the standpoint of tech, I hope this served as a reality check for Ethereum maximalists who think it's all fine and dandy, ready to run. Greed is a hell of a blindfold.
I'm not sure why people have such a tendency to turn good things into religion. The hack should dampen things a bit but it's the Ethereum project is still picking up steam.