How the “Value Overflow Incident” Could Have Ended Bitcoin as We Know It

How the “Value Overflow Incident” Could Have Ended Bitcoin as We Know It

For a very brief window, Bitcoin had an additional supply of 184.467 billion, and it almost shut down the entire network!

As of September 2021, Bitcoin’s market capitalization was US$782.65 billion. The cryptocurrency has been gaining massive ground, with over 2,300 US businesses accepting it as a form of payment and Paypal launching crypto services in their U.K. app. However, in spite of the surge in Bitcoin adoption, the currency isn’t quite as safe as one might think it is. 

It is in fact possible to hack Bitcoin. In its 12-year history, hackers have exploited bugs in Bitcoin’s codebase to attack the Bitcoin network. One of the three major bugs that have been taken advantage of to hack Bitcoin’s network is CVE-2010-5139, or more popularly known as “The Value Overflow Incident”. Let’s break down what happened during this hack and what has been done since to prevent similar hacks. 

Spiraling back to 2010

Before we go into what happened, it is important to preface that Bitcoin only has a limited supply of 21 million coins, of which 18.87 million have already been mined. On August 15, 2010, this limit was broken when someone created an astounding 184.467 billion Bitcoins out of thin air for three different addresses. The anomaly was spotted in block 74,638 by Jeff Garzik, a Bitcoin developer at the time. 

The unknown entity that had created these over 184 billion Bitcoins has exploited an “overflow bug” in the Bitcoin code. The overflow bug refers to the inability of Bitcoin’s code to work correctly when summing up very large outputs. The hacker had noticed this bug and taken advantage of it to create 8,784 times the amount of Bitcoin that should have ever existed. 

Addressing the bug

Within five hours upon the discovery of the bug, Bitcoin’s creator Satoshi Nakamoto released another version of the Bitcoin client (the 0.3.1 version). This version contained a soft fork (an update) that deleted all the transactions and mining of blocks after the bug had been discovered. The fork also got rid of the additional Bitcoin supply created by the hacker. 

With the release of  a soft fork, two versions of Bitcoin now exist—the good chain  (0.3.1) and the bad chain (the hacked earlier version). Nakamoto urged miners to shift to the good chain, and within 19 hours of the hack, 0.3.1 became the dominant version. While the bad chain is no longer in use, the 0.5 Bitcoin consumed by it is still in circulation. However, it has not been used since the incident. 

“The worst problem ever”

The bug was a pretty serious issue, with the lead maintainer of the Bitcoin repository on Github, Wladimir Van Der Laan, calling it “the worst problem ever”. If the bug had not been fixed, Bitcoin would have lost its value, and within 24 hours, the entire Bitcoin system would have shut down. Fortunately, the bug was fixed. 

The global cryptocurrency market has a market capitalization of US$1.13 trillion today. As more and more cryptocurrencies continue to enter the market, it seems to be only going up. Without Bitcoin, it is nearly impossible to imagine what the cryptocurrency industry of today would look like (or whether it would even exist, to begin with). 

Header image courtesy of Freepik


Share on facebook
Share on twitter
Share on linkedin
Share on email
Kamya Pandey
Kamya is a writer at Jumpstart. She is obsessed with podcasts, films, everything horror-related, and art.


What China’s Crackdown on Crypto Can Mean for the Market

What China’s Crackdown on Crypto Can Mean for the Market

The People’s Bank of China said in September this year that “all virtual currency-related business activities are illegal financial activities”, including services by overseas cryptocurrency exchanges to Chinese residents through the Internet.

What Is a DAO and How Does It Make Money

What Is a DAO and How Does It Make Money?

Imagine that you and your partners come up with an excellent business idea. After drafting a thorough plan, all you need is the money to execute it. For that, you can set up a decentralized autonomous organization, or DAO. To join the organization, people buy tokens, gaining part ownership of your company while investing in it.

What Are Decentralized Financing (DeFi)Platforms

What Are Decentralized Financing (DeFi)Platforms?

Decentralized financing (DeFi) is a blockchain-based financial system that does not rely on traditional financial institutions like banks. Decentralized financing platforms allow users to trade cryptocurrencies and make available other financial services, like borrowing and lending. In 2021, DeFi industry has grown to US$80 billion, with an expected ten-fold growth by 2022.

Five most valuable startups in the world

Five Most Valuable Startups in the World

Over the years, many startups have entered the global marketplace and revolutionized the ways we live. Companies with unique problem-solving methods and an ability to create one-size-fits-all solutions are the ones that make the leap to acquiring the unicorn status (companies with a US$1 billion valuation).


Gamers Turn To NFT Games to Earn Cryptocurrency

Imagine being paid generously for playing video games. Sounds like a dream—or an overly ambitious American movie—doesn’t it? Well, it’s reality for those following the rise of NFTs or non-fungible tokens. According to the Chief Executive of video game company Electronic Arts (EA), Andrew Wilson, collectible NFTs are “an important part of the future of [the gaming] industry”.