Arrow finally gave viewers a glimpse of bad guy super hacker, Cayden James. You may recognize Michael Emerson, the actor playing Cayden, because he also played good guy super hacker Harold Finch on the show Person of Interest.
Cayden's plan was to apparently bring down the internet. Team Arrow was able to stop him but they may have actually helped him.
By making Felicity and the team think that he was taking down the internet, he indirectly forced Felicity to hack the main internet servers in order to stop him.
But he never intended to take down the internet servers, instead he wanted Felicity to take down the firewall so that he could install a "critical piece of code to arclight."
So now Felicity is responsible for both releasing Cayden and helping him with a plan that could result in the deaths of over 300 million people.