Excerpt
I talk about the one time Bitcoin had a major bug back in 2010 and how it was quickly fixed by Satoshi Nakamoto and other developers. Watch now to learn why this event helped to make Bitcoin more secure and valuable today!
Transcript
The Overflow Bug Incident
Yes, it has. It happened only once, in the very, very early days of Bitcoin when the price of bitcoin was 7 cents, can you imagine? And only a few people knew about Bitcoin, and even less used it.
Discovery of the Bug
It was on August 15, 2010, someone found a bug in the code which enabled them to generate billions of bitcoin in a short time. This bug was from then on called the Overflow Bug.
What Happened?
What had happened? The limit of the maximum number of bitcoin is, as you know, 21 million bitcoin. No one can create more than 21 million bitcoin – that’s a core principle of Bitcoin, and that the supply is fixed. But the oversight in the code allowed the generation of arbitrarily large amounts of bitcoin during the creation of transactions.
The Response
Within five hours after the start of the attack, Satoshi Nakamoto and other Bitcoin developers issued a patch. So they updated the software. The update included code that was rejecting transactions that would create higher amounts of bitcoin than allowed.
The Fix and the Soft Fork
And at the same time, the Bitcoin blockchain was soft forked to undo the damage that was done and to reset the blockchain to a state before the hacker started changing the transactions.
The Only Time
This was the only time that something like it happened. Since then, it hasn’t been hacked or altered. The person who was responsible for this breach is still unidentified, even after more than now 14 years.
Lessons and Impact
Since then, Bitcoin has undergone substantial improvements, implementing sophisticated security measures to guard against comparable vulnerabilities. This early challenge was a crucial test basically of bitcoin’s durability during its early stages, contributing significantly to its security development.
Market Reaction
And Bitcoin’s price back then reflected the speedy actions and damage control, as it bounced back quickly despite the critical nature of the flaw back then. So, in August when the attack happened, bitcoin’s price was 7 cents, as I said, and it went up to 30 cents by the end of 2010.
