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 THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email

RELATED POSTS

Top Must-Follow Productivity Influencers in 2023

Top Must-Follow Productivity Influencers in 2023

Productivity is a key aspect of success in today’s fast-paced world. Being productive enables individuals to balance their work and personal lives effectively while accomplishing their goals efficiently. To help you stay on track and reach your full potential, we’ve identified top influential productivity experts who provide valuable insights to maximize your efficiency in 2023.

What Can Drones Be Used For, and Do They Have a Future?

What Can Drones Be Used For, and Do They Have a Future?

In January 2023, Australian soldiers used drones to search for a missing woman. The drones helped them reach areas that might have been too challenging for a human to enter. For the past few years, the drone economy has been booming. Global investments in the industry amount to US$1.15 billion, with China leading the market.

2022 FIFA World Cup

The Most Controversial VAR Decisions at the 2022 FIFA World Cup

The footballing world has welcomed many new technological developments in recent times. Its goal is to make decision-making more accurate and provide a better experience for players and fans alike. These technologies include the video assistant referee (VAR), semi-automated offside technology (SAOT) and sensor-equipped footballs, all used extensively during the 2022 FIFA World Cup in Qatar.

Self-funding Your Startup? Follow These Expert Tips from Proven Entrepreneurs

Self-funding Your Startup? Follow These Expert Tips from Proven Entrepreneurs

Starting a new business can be an exciting and challenging endeavor, with securing funding being one of the biggest obstacles. Traditional funding options, such as venture capital and angel investing, can be time-consuming, especially for new and untested businesses. In such cases, self-funding, or “bootstrapping”, might be a viable option.

Navigating Ghost Job Postings: How to Avoid Them

Navigating Ghost Job Postings: How to Avoid Them

Job searching can be a daunting task, especially with the risk of encountering scams or fraudulent job postings. Ghost job postings, which refer to open job positions that are not actively being filled, are a common issue that jobseekers should be aware of. According to a survey by New York-based financial consultancy Clarify Capital.

Can AI Help You Flirt Better

Can AI Help You Flirt Better?

“Excuse me, but I think you dropped something: my jaw.” This is the pick-up line the famous artificial intelligence (AI) chatbot ChatGPT dished out when we asked for some viable options. Not the most original, sure, but not bad for a trained algorithm.