More

    A Typo Sent $36 Million of Crypto through the blockchain

    The immutability of the blockchain is one of its main selling points: A transaction cannot be reversed once data has been processed. One of the most vexing aspects of the blockchain? It is unchangeable. Reversing a human error that results in anything being sold for the wrong price or money being delivered to the wrong location can be difficult, if not impossible.

    That is the unpleasant situation in which Juno cryptocurrency developers find themselves. A community vote had mandated the seizure of over 3 million Juno tokens, valued at around $36 million, from an investor suspected of acquiring the tokens through fraudulent means. (This was a major crypto news item in and of itself.)

    According to CoinDesk, a developer accidentally copied and pasted the erroneous wallet information, resulting in $36 million in cryptocurrency being transmitted to an unreachable account.

    Andrea Di Michele, one of Juno’s original developers, told the publication that he supplied the right wallet address, as well as a hash number, to the developer in charge of the transfer. Hashes link blocks on the blockchain together, and hash values can resemble wallet addresses at first glance. The transfer’s coder unintentionally copied and pasted the hash number instead of the wallet address.

    Blockchain validators not spotting the issue

    Di Michele told CNET that the fact that none of the network validators spotted the issue was far more upsetting than the human error. To be added to the blockchain, “validators” must validate each transaction, which is encoded in “blocks.” Di Michele explained that this transaction had 125 validators, but none of them were examined. He remarked, “This is a wake-up call for validators.”

    Juno is a blockchain that aspires to be more scalable and efficient than Ethereum (read: cheaper and less environmentally damaging). It’s a Proof-of-Stake blockchain, which is more efficient than Bitcoin and Ethereum’s Proof-of-Work consensus processes. PoS systems validate transactions by allowing token holders to vote on whether or not to approve them, whereas PoW chains rely on the solution of computationally complex cryptographic problems, which is why those systems require so much more processing power.

    Blockchain’s anonymity as a boon and a curse

    Blockchain infrastructure is primarily intended to improve decentralization by allowing a global network of people to execute payments rather than centralized entities such as banks. The disadvantage of decentralization is that no entity can rapidly correct human faults. Someone sold their Bored Ape Yacht Club NFT for 0.75 ether instead of 75 ethers in December, earning $3,000 instead of $300,000. Fat finger mistakes are not rare.

    Developers have developed ways to reverse transactions in the past, but the solutions aren’t straightforward. When a hacker exploited a smart contract in 2016 and stole $50 million in ether, Ethereum developers had no choice but to “hard fork” their blockchain in order to recover the funds. This meant creating a copy of the existing blockchain that was identical in every way except that the stolen funds were transferred to a recovery address. It was a divisive episode. Some members of the community believed it went against cryptocurrency principles, so they continued to run Ethereum Classic on the original blockchain.

    Juno with a saving strategy

    Because Juno is a Proof-of-Stake chain, the problem may be easier to fix for its engineers. Juno operates on a governance model, according to Di Michele, in which token holders can vote to change blockchain transactions, so changing direction needs a majority vote and then a software update.

    “Funds will flow to the correct location in one week or whatever,” Di Michele told CNET. “It’s horrible, but it can be rectified simply.” Another upgrade will restore funds by adjusting the chain state. PoS chains are different from Bitcoin in that they are governed. Even state changes can occur if the government says so. “

    Stay in the Loop

    Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

    Latest stories

    You might also like...