There are currently just over 18 million bitcoins in circulation. And the maximum number scheduled to exist is 21 million. However, a part of bitcoin history that few know about is that on August 15, 2010, that limit was destroyed by a person who managed to exploit a flaw and produce 184 billion Bitcoins.
Let's set the stage: in 2010, Bitcoin peaked at about $ 0.3 – so low, in fact, that in May of that year someone spent 10,000 Bitcoin buying a single pizza, now valued at more than $ 110 millions. This day became known as “Bitcoin Pizza Day” and is celebrated every year.
Clearly, Bitcoin was far from what it is today; like many new technologies, it experienced growing pains, one of which was a bug that generated billions of units of new Bitcoins in some transactions.
In August 2010, the Bitcoin source code was exploited by someone who remains anonymous to this day. The bug occurred in block 74,638, the fateful block that created 184,467,440,737.09551616 BTCs, with two addresses receiving just over 92 billion Bitcoin each – 92,233,720,368, to be specific.
The anomaly was quickly detected in the Bitcoin Talk forum by Jeff Garzik, a Bitcoin developer who is now the CEO of Bloq. The problem was called an “overflow bug”; the code to verify Bitcoin transactions did not work if the exits were large enough when added together.
The bug was fixed very quickly. It took only five hours before a “soft fork” was launched, which reset the Bitcoin blockchain to before the buggy block and included the code to reject outbound transactions with values that exceeded the limit.
A soft fork is a blockchain update. As the community forked to return to the blockchain state before the 184 billion BTC was mined, this means that some blocks that were previously valid have been turned into invalid blocks, removing them from the blockchain and restoring it to a previous state. .
The soft-fork erased all transactions and mining that were recorded in blocks that were produced after the buggy block. It also disposed of the 184 billion Bitcoins mined. The update, patch 0.3.10, was implemented by the pseudonym creator of Bitcoin, Satoshi Nakamoto himself.
The rapid implementation of the patch was vital to keep Bitcoin a viable and reliable cryptocurrency. 184 billion Bitcoins would have devalued the currency completely, leaving it at the mercy of the person who owned the newly mined Bitcoins. Even if the breach were to happen today, the amount of Bitcoin obtained through the bug would completely nullify the current cryptocurrency offering, rendering any Bitcoin worthless.
Bitcoin also benefited from this exploit having happened early on, as taking the Bitcoin network offline at the time could be done without major consequences.
Today, such an interruption would cause widespread chaos; trading would be severely disrupted and any purchases made using Bitcoin would have been canceled. The very fact that a bug could allow the 21 million Bitcoin limit to be breached would also create shock waves in the community, probably causing the price of Bitcoin to fall and fatally undermining confidence in the cryptocurrency.
What happened to the price of Bitcoin?
The subsequent exploit and soft fork did not affect the price of Bitcoin. In fact, Bitcoin actually experienced an increase in 2010; its price increased by more than 300% between the day of the patch and the end of the year (from $ 0.07 to $ 0.30). The fact that Satoshi himself intervened, and did so quickly, showed that Bitcoin was not as easily hacked as some might have assumed and built confidence in a concept that until that point remained untested.
To this day, the person behind the bug remains unknown and, due to the anonymous nature of the blockchain, there is no way to track it. Despite its anonymity, the feat is still part of the history of bitcoin – possibly the first blockchain hacker.
* Translated and republished with authorization from Decrypt.co