Just yesterday, in fact, The Guardian reported on how $300M in Ether currency just vanished due to an accident committed by just one user. “More than $300m of cryptocurrency has been lost after a series of bugs in a popular digital wallet service led one curious developer to accidentally take control of and then lock up the funds, according to reports,” reports The Guardian. Yes, you read that correctly: A user accidentally destroyed $300 million worth of cryptocurrency. Oops.
Podcast Transcript: “The crypto world is in a total panic today as it turns out that somebody – a user error – caused the destruction of 300 million dollars worth of ether crypto-currency. So, this guy, who I’ll just call the 300 million dollar man, this guy apparently was involved in the IT staff of an online wallet that holds what I believe are multi-signature wallets for ethereum and ether based crypto-currencies. I don’t know all the details of what the wallet handles, but that’s what I’ve read. So, this guy accidentally takes over all the wallets. Now let’s just hold the story there for a second. He accidentally takes over all the wallets. In other words the online wallet hosting company can steal all your money if you’re using an online wallet. This is also true with like coin base for example – which is a, I’m convinced, a criminal operation that needs to be heavily investigated – but others such as MtGox have actually stolen everybody’s Bitcoin and just absconded with all that money never to be heard from again. So, this online wallet – a user or administrator there – takes over everybody’s wallets, accidentally he says. And then in a panic he sets fire to all the wallets and destroys them, but technically he tries to reverse what he did and he deletes – at least this is the way I’m reading it so far – some segments of code or reverses a transaction or something, and he tries to reverse what he did. But in doing so he accidentally sets fire to all the money, to all the coins rendering them all useless – effectively frozen out of existence. The Guardian is describing this as stealing the coins and then setting fire to them. So, now all these people wake up this morning and they they look at their online ether balances that used to total three hundred million dollars and they see big fat zeros. So, they’re all zeroed out. Now of course, everybody starts to panic and this panic spreads very quickly…” Listen to the full podcast below:
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