Bitcoin once almost went under from a hack!
The most popular crypto Bitcoin was almost completely gone because the blockchain was hacked. Read here how the hack took place and what the consequences were.
The crypto seems to be a resounding success story, but there have also been times where the coin almost fell short. On August 15, 2010, there was a hack that was so massive that Bitcoin nearly went under. 184 billion Bitcoins were suddenly created, the hacker did this in one transaction. If Bitcoin did not act on this, the coin would have become worth nothing. The whole idea behind Bitcoin is that there are a limited number of coins and therefore there is scarcity. Which in turn guarantees the price.
Bitcoin and a mega hack
The hacker created a huge number of new coins from scratch. This ‘event’ is now referred to as the Value Overflow Incident. The hack was done by exploiting a loophole in the code. Namely, a piece of code was used that was used to check Bitcoins transactions. This one didn’t work and because of this the output was so large that it overflowed. This allowed the hacker to create billions of Bitcoins.
In 20120, the creator Satoshi (not his/her real name) was still active. Interventions were quickly made and a hard fork was implemented to prevent more misery. This also removed the 184 billion coins.
Fast action after hack
Such a hack can kill a coin. Especially because Bitcoin was not so well known at the time. However, many people had already invested in the currency at the time. If they had known that so many coins had suddenly been added, the price would have gone to zero. This is because it had become known that coins can be added to your heart’s content.
Fortunately, all messages came in on Bitcointalk. This is a forum and apparently Satoshi was reading this. Within hours of the first message, there was a solution. This hard fork resulted in two different versions of Bitcoin. Satoshi kept a close eye on things and made sure miners would use the right chain. As a result, this chain became dominant and the bad ones gradually disappeared. Due to the quick and smart intervention, Bitcoin has now become the digital currency with an enormous value.
