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Silver

$300 Million In Crypto Currency Lost FOREVER Thanks To A Bug In A Digital Wallet

Mac Slavo
November 8th, 2017
SHTFplan.com
Comments (27)
Read by 3,706 people

ethereum

$300 million worth of the cryptocurrency Ethereum has been almost definitely lost forever.  The losing of the currency was accidental and due to a bug in a digital wallet.

The Ethereum cryptocurrency has been lost after a series of bugs in a popular digital wallet service led one curious developer accidentally taking control of and then locking up the funds, according to reports.

The user, “devops199”, triggered the flaw completely accidentally. When they realized that they had taken control of the ether of other, they attempted to undo the damage by deleting the code which had transferred ownership of the funds. Rather than returning the money, however, the program simply locked all the funds in those multisignature wallets permanently, with no way to access them. “This means that currently no funds can be moved out of the multi-sig wallets,” Parity says in a security advisory.

Unlike most cryptocurrency hacks, however, the money wasn’t deliberately taken: it was effectively destroyed by accident. According to the Daily Mail, the lost money was in the form of Ether, the tradable currency that fuels the Ethereum distributed app platform, and was kept in digital multi-signature wallets built by a developer called Parity. These wallets require more than one user to enter their key before funds can be transferred.

On Tuesday, Parity revealed that, while fixing a bug that let hackers steal $32m out of few multi-signature wallets, it had inadvertently left the second flaw in its systems that allowed one user to become the sole owner of every single multi-signature wallet.

“We are analyzing the situation and will release an update with further details shortly,” Parity told users. Parity says that it is unable to confirm the exact amount lost and that the $300 million figure is “purely speculative”. The company also disputes that the currency is “lost.” They are arguing that the term “frozen” is more accurate. But if it is frozen, it appears that no-one has the ability to unfreeze the funds and there seems to be no resolution in sight.

“The Parity vulnerability was the result of an incorrectly coded smart contract used by the Parity wallet to store tokens on the Ethereum network,” said Dominic Williams, founder of blockchain firm DFINITY. “The vulnerability made it possible for anyone to ‘freeze’ the tokens held by that smart contract, making them immovable. At this time, the only method we are aware of to ‘unfreeze’ tokens held by the vulnerable smart contract would be to create a new ‘hard fork’ Ethereum client that deploys a fix. This would require every full node on the Ethereum network to upgrade by the date of the hard fork to stay in sync, including all miners, wallets, exchanges, etc.”

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Author: Mac Slavo
Views: Read by 3,706 people
Date: November 8th, 2017
Website: www.SHTFplan.com

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27 Comments...

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  1. Frank says:

    So much for the “safety” of cryptocurrencies. Little green pictures of dead presidents, while inconvenient, are still the way to go.

    • Paranoid says:

      Sound as the paper it’s printed on.

    • Historian says:

      It behooves cryptocurrency users to vet their wallet software, check hashes on downloads, adhere to standard PERSEC (e.g., use VPN, direct connections, not WiFi, etc.) and avoid “meatspace” mistakes (“operator error”).

      Caveat emptor!

      • David Utah says:

        And yet disasters in crypto still happen – with all the ridiculous measures you have to go through to secure yourself from being found out it’s extremely easy to lose your “money”, and the feds still have the software capability to track down any transactions you make using Etherium, Bitcoin and all the other crypto-frauds claiming to be anonymous. There hasn’t been a tulip craze like crypto since the days of, well, the tulip craze…

        • Historian says:

          You are almost half-right.

          Bitcoin, Ethereum, and their derivatives are indeed trackable if all the precautions are not taken. It is no more difficult to adhere to those precautions than it is to learn and practice shooting well and safely, storing food properly, or learning how to skillfully operate your communications gear.

          DASH, Monero, Zcash, Shadowcash, Verge, and a few others are inherently NOT traceable. Stupid mistakes however can defeat the inherent privacy of those cryptocurrencies.

          Cold storage is not absolutely safe. Just like hard drives and flash drives die, so too do cold storage wallets die.

          You do drive a vehicle, don’t you? Life is full of risks.

          • David Utah says:

            I’m completely correct. ALL of them are traceable if you use them in transactions. The Feds use a system called “Chainanalysis”, for Bitcoin and Etherium, and there is no reason why it could not be applied to Monero and others, they just aren’t in wide enough usage yet to warrant attention. There is no privacy in any system that uses a blockchain. Sorry to burst your bubble.

            https://www.coindesk.com/irs-using-bitcoin-tracking-software-since-2015/

            • Historian says:

              You are “almost half-right” because you wrongly conflate Bitcoin design with the design of DASH, Monero, Zcash, Shadowcash, Verge, and a few others.

              An example: Ring signature design is quite unlike Bitcoin and creates ambiguity. It is somewhat analogous to the difference between the crackable server dependent “onion” design of TOR (The ONION Router) and the distributed no-server “garlic” design of I2P (Invisible Internet Project).

              Criminal users of DASH et al. (and I2P) get “traced” when they have their illegal drugs and/or arms mailed to their home or other traceable address. That is a “meatspace” mistake, not a flaw in the design of DASH et al.

              AS I have previously said, when quantum computing is readily available, all bets are off. It will be a new playing field.

  2. Vern H. says:

    well, that’s one way for the mega-too-big-to-fail global bankers to shut down the alternate currencies. Hack em and insert doubt. Works everytime.

  3. Vern H. says:

    Well, that’s one way for the Too-Big-To-Jail-Mega-Globalist-Bankers to protect their fiat money monopolies. Hack the cryptos and insert doubt to the public, works everytime.

  4. Archivist says:

    For the right amount of junk silver, I might could fix their problem.

    But that will never happen.

  5. rellik says:

    Even though it is Phony money, never give up your cash.

  6. Heartless says:

    And here’s to all that promulgate advice to go ‘digital’ – one big-ass digital “oopsie” to you all from Ethereum. I only hope no SHTFPlan readers got hit. But just all remember that if you can’t touch it, it ain’t real. Electron heaven awaits those ignorant enough to think anything that requires technology beyond casting metal is real is a fool.

  7. Sierra Dave says:

    If you don’t hold it in your hands, you probably don’t own it.

    In all fairness. A small percentage of your wealth could be held digitally. If you have to flee with just the shirt on your back, you can access the digital currency in some other country.

    • durangokidd says:

      Assuming that conditions in another country are better than in the USA when SHTF. Not a bet that I would make.

      100 million Americans with 300 million guns suggest to me that the USA would be safer than any other country because in almost any other country, the Second Amendment does not apply.

      And in the those countries the population will be subject to the government and other criminal organizations that do have guns. More than that, in a real SHTF situation, the Internet will be offline, or seized by the government to stifle opposition and your $300 million of cryptocurrency is history.

      Transforming our real lives into digital lives means that the government has exponential control over all of our activities. Today it’s $300 million worth of cryptocurrency that disappears; tomorrow it’s our entire life records.

      It won’t be like losing your wallet and having to replace the info. In the future you can be erased. Completely. 🙁

    • durangokidd says:

      Assuming that conditions in another country are better than in the USA when SHTF. Not a bet that I would make.

      100 million Americans with 300 million guns suggest to me that the USA would be safer than any other country because in almost any other country, the Second Amendment does not apply.

      And in the those countries the population will be subject to the government and other criminal organizations that do have guns. More than that, in a real SHTF situation, the Internet will be offline, or seized by the government to stifle opposition and your $300 million of cryptocurrency is history.

      Transforming our real lives into digital lives means that the government has exponential control over all of our activities. Today it’s $300 million worth of cryptocurrency that disappears; tomorrow it’s our entire life records.

      It won’t be like losing your wallet and having to replace the info. In the future you can be erased. Completely. 🙁

  8. AlphaJollah-NoPhotoPlz says:

    I would only ever use a * coin (* signifying, Covering all variations) to pay some service say something like red ice radio subscription “a few euro” right common sense says the least possible amount or just don’t even play with this cryptocoin blockchain nonsense. Then next up, getting rid of all the amount and value at the speed of light 3e8 vs cashing out and closing the account cause holding is dangerous frankly if you have value going up in flames.. Also the value being such a craps shoot forget ever putting in anything over $100. I’m just saying and I love tech I ran a damn bbs for god sake. I can repair electronics and I rather have the PARTS on the shelf then have the money dissapear because of some retard.

    That’s the way I’ll treat * Coin. Very Cautiously, and as something that can go up in flame and I don’t depend on it and there’s no other possible way to transact. It will be last unwilling choice. (also forget that virus decrypt scam) -not payin that, we keep clone of the drives – YOU SHOULD TOO, it’s called Responsibility. You can do it with CLonezilla “free” or Acronis – maybe others I don’t CARE not my problem, nor the cost of the 2nd drive, 2nd video card, 2nd Mainboard etc. Not my wallet. Now hit that squid blacklist with the iptables to make sure we aren’t goin there in the first place.

    Didn’t Cliff High show a photo of this stuff running on Video Cards? I thought I saw that. heh..

  9. This will most likely be resolved in the next Ethereum hardfork, happening soon, which will update the blockchain with a “fix”. Cryptocurrencies remain stable and secure, it’s third party software like Parity or Exchanges that has proven unworthy and hackable. Create an offline cold wallet and you can be sure your funds are safe.

  10. Valery Vebelfeltzer says:

    Sounds a lot like when the guy accidentally ate the tulip bulb for breakfast

  11. M R MICHAEL says:

    Thats why you always have a paper wallet or a hard wallet for big money. Nothing more then you want to lose on an exchange. 200-300 HUNDRED then the rest off line.
    Yes blame the exchange but shame on the one’s that had any major amount on it.

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