Bad Code Has Lost $500 Million of Cryptocurrency in Under a Year
Cryptocurrency can be lost in a variety of ways, from hacking to forgotten passwords and failed flash drives. But in dollar terms, one of the biggest causes of crypto losses is bad code, and it’s not usually the fault of the coin’s developers. Instead, third parties, including shoddy smart contract developers and shady exchanges, are to blame for losses that have reached half a billion dollars in the last seven months.
Also read: Cryptocurrency Exchange Bitgrail Suspends Operations After ‘Losing’ $170 Million of Nano
Bitgrail Gets Railed for Dodgy Code
Last week, news.Bitcoin.com reported on the demise of Bitgrail, which contrived to lose $170 million of nano cryptocurrency. While the precise sequence of events that caused the catastrophic collapse of the exchange with the assets of thousands of customers is still being confirmed, poor code is being blamed. As reported at the time:
There are rumors that Bitgrail became insolvent following a withdrawal bug that was discovered by some users and then shared in Discord and other chat groups, causing the wallet balance to gradually diminish. One user explained: “There was a bug on Bitgrail where if you placed two orders you got double balance added to your account. You could then withdraw while the orders were up and steal the coins. You had negative balance in the end but you could just make a new account.”
In the aftermath of the incident, this theory has been bolstered by allegations that a bug was indeed responsible, and not in nano’s code, but in Bitgrail’s. One source asserted: “There was a bug, on the withdraw page. But this check was only on java-script client side, you find the js which is sending the request, then you inspect element – console, and run the java-script manually, to send a request for withdrawal of a higher amount than in your balance. Bitgrail delivered this withdrawal. How many people did this? Who knows.”
There was another bug, you could request a withdrawal to your address – from another user-id, from another user-account. That would cause the other users balance to have “missing funds” or “negative balance”. Bitgrail bomber solved this bug by manually entering the “correct” numbers in his database. This is what you get for using a PHP website coded by same skill-level as CfB of IDIOTA.
Even the Best Cryptocurrencies Aren’t Immune to Poor Code
The cryptocurrency most commonly associated with catastrophic bugs is ethereum. That’s not due to its underlying code, but on account of the smart contracts that can be built on top of the ethereum framework. First there was the DAO, which led to ethereum being forked right out the gate, and then there was the Parity bug that caused 150,000 ETH to be stolen, followed by the other Parity bug that caused $168 million of ETH to be locked up.
In the past couple of weeks, ethereum bugs have surfaced once more, albeit on a smaller scale. Proof of Weak Hands (PoWH) was a joke scamcoin which turned into an actual scamcoin after a bug led to the loss of 900 ether worth $1 million that had been sent to the contract address. The developer then disappeared after receiving death threats from investors aggrieved to discover that the joke Ponzi they were buying into was even less legitimate than it had seemed.
PoWH has since spawned a new scamcoin called ethpyramid which is for “strong hands only”. To the question “Is Ethpyramid secure?” the site responds “Yes. Our dev team put a lot of time into refining and testing this contract to make sure your tokens are safe. Internal functions of the contract are not accessible to the end user.” There’s also PoWH420, “the world’s dank autonomous and self-sustaining 420 pyramid scheme”.
Even if joke coins and their joke developers are taken out of the equation, it’s evident that cryptocurrencies are only as strong as their weakest link. While altcoins such as ethereum and nano have undoubted potential, like every other crypto they’re hostage to bugs lurking in wallets, smart contracts, and exchanges. One bad line of code is all it takes.
Do you think Bitgrail was brought down by a withdrawal bug or is there more to this story? Let us know in the comments section below.
Images courtesy of Shutterstock, and PoWH420. Katie Webster assisted with this article.
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Jay-Z Expands Portfolio to Include Crypto
Nas and Snoop Dogg have backed trading application Robinhood, and now legendary rap star Jay-Z has added his imprimatur through a subsidiary, Arrive. Robinhood is already valued at over a billion dollars, closing in on 1.5 billion as of this writing, having recently announced Robinhood Crypto.
Also read: Internet Pioneer Who Influenced Assange & Snowden Dead at 70
Jay-Z Goes Crypto
Shawn Carter, 48, better known as Jay-Z, owns an entertainment-centric management company, Roc Nation: talent agency, concert promotion, music production, record label, film production, and even music publishing are among its calling. The 21 Grammy-winning, 100 million records sold mogul can now add crypto to that list.
In Spring of last year, Mr. Carter announced a subsidiary, Arrive Venture Capital, under his Roc Nation banner (itself owned by Live Nation Entertainment, which in turn is owned by Liberty Media) to focus on startups. Mr. Carter’s penchant for investing in hungry companies goes back at least as far as 2012, when he reportedly went tech: luggage maker Away, private jet outfit Jetsmarter, and even a series B round with Uber.
Arrive’s head Neil Sirni explained, “Arrive was created to leverage our experience and resources in building brands, developing consumer-facing businesses, managing artists and representing athletes. We’ve opened that diversified, global range of expertise to a new vertical: entrepreneurs and their early stage businesses.”
Robinhood late last month announced it was expanding its services to include free trades in bitcoin and ether, and it set off a firestorm of publicity. Though the company doesn’t plan to become a cryptocurrency exchange proper, analysts believe such a format could one day seriously challenge more well-established platforms. Within a week, over one million people signed up for the service.
Not His First Rodeo
Mr. Sirni continued, “We believe in Baiju and Vlad’s mission to make the financial markets more accessible and cost efficient for customers of all size. Robinhood will have our support as they execute the long-term vision of their company.”
Robinhood already has over three million users. Its total value is inching near one and a half billion dollars. Its model is a loss leader, with stock trades being essentially free. It also launched a web-based service, and its Robinhood Crypto, though limited in scope initially, is already considered a success.
Arrive has invested in the location sharing project Insite Applications, and Devialet, an audio technology company. Robinhood is Arrive’s third venture, and comes immediately after the startup’s bitcoin and either announcement.
Though rappers such as 50 Cent have notoriously invested in bitcoin as well, Jay-Z was the first. His Soldier Field stadium concert partnered with local newspaper Chicago Sun Times to sell tickets in bitcoin through a third party vendor.
What are your thoughts on Jay’s move? Let us know in the comments section below.
Images courtesy of Pixabay, Roc Nation.
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Faced With Criticism IOTA Fans Try to Bully Growing List of Detractors
Accusations of FUD, #fakenews and similar terms are sadly all too common in the crypto world. Startups in the field are many times headed by young people, sometimes bringing a needed fresh perspective and attitude, but a few appear to completely lack the maturity needed to run a public business. In the case of IOTA this is exacerbated by sycophants who enable this situation and rather attack critics than have an adult discussion.
Also Read: Analyst: IOTA Sharply Overvalued Due to “Overwhelming Evidence of Serious Flaws”
IOTA Fans Try to Silence Critics
In the past few days, as more analysts raised questions about the project, IOTA fans lashed out even harder against critics, anonymously publishing hit pieces against some community influencers and trying to get others off of social media altogether. This is in addition to the standard operation method of IOTA whenever someone writes something they can’t handle, a childish or nasty ad hominem attack by the head of the team on Twitter followed by a barrage of similar insults by his minions (and likely many bots as the frequency seems to suggest).
Enemies List
Rather than reflect on the behavior that got them into hot water, IOTA promoters seem to be doubling down. They have embraced an ‘us vs. them’ mentality, wherein any reporter asking questions, any developer objecting to their non-blockchain solution, and even former investors who complain about their funds being stolen are all seen only as enemies attacking the group.
This is how an IOTA blogger described it today: “We decided to start an anti misinformation report that comes out daily if possible. A group of people is willing to help me with that. The reports will include timestamps, tweets, sources, names of the “attackers” and the FUD explained and corrected.” While this approach might intimidate some, it can not silence everyone in an ecosystem fraught with scams where fair judgment is needed.
The #IOTA mafia are not giving up! Reporting my account to Twitter now. Read the review that triggered them here: https://t.co/j63V7Bx0hZ pic.twitter.com/nWuQJDwZaD
— Andreas Brekken (
@abrkn) February 11, 2018
Are IOTA promoters doing the right thing for the project by going after critics? Tell us what you think in the comments section below.
Images courtesy of Shutterstock.
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Source: https://news.bitcoin.com/