A typo sent $ 36 million worth of cryptocurrency to Ether. This surprising problem has alarmed many in the cryptocurrency community. While the immutable nature of the blockchain is one of the most interesting features of this distributed ledger technology, once data has been processed or a transaction has occurred, neither can be reversed. One of the most significant disadvantages of using blockchain technology?
It can never be changed. If human error leads to something being sold at the wrong price or funds being delivered in the wrong location, it may be difficult or impossible to reverse the transaction. In this terrible situation are the developers of the Juno cryptocurrency. A community vote imposed the confiscation of approximately 3 million Juno tokens, valued at approximately $ 36 million, from an investor who is believed to have acquired the tokens by fraudulent means.
This alone was a major cryptocurrency news bulletin. The funds would be transferred to a hardware wallet that would be controlled by people who owned Juno tokens. These people could then vote on how the funds would be used. A developer accidentally copied and pasted the wrong wallet address, causing $ 36 million worth of cryptocurrency to be transferred to an inaccessible account. Here’s how a typo sent $ 36 million worth of cryptocurrency into Ether and raised alarms in the cryptocurrency community.
The complex blockchain transaction process
In an interview with Coindesk, Andrea Di Michele, a founding member of the Juno development team, said he provided the developer responsible for the transfer with the correct wallet address and hash number. Hashes are the glue that holds the blockchain together and, at first glance, the digits representing the hashes can look quite similar to wallet addresses. The person responsible for the transfer was a programmer who made a copy and paste mistake and, instead of the wallet address, pasted the hash number.
According to Di Michele, the fact that none of the network validators saw the problem was an even more heartbreaking experience than the human error that occurred. In order for transactions encoded in “blocks” to be uploaded to a blockchain, the “validators” must validate each transaction. Trying to explain how a typo sent $ 36 million worth of cryptocurrencies in Ether, Di Michele noted that there were around 125 validators for this transaction, but none were reviewed. You said this should serve as a wake-up call for validators.
The Juno blockchain is an attempt to compete with Ethereum by developing a more scalable and more efficient system. Proof-of-Stake is a more efficient consensus process than Proof-of-Work, used by Bitcoin and Ethereum. PoS systems validate transactions by having token holders vote to accept them, but PoW chains rely on solving computationally difficult cryptographic problems. This is why PoW systems consume much more energy than PoS systems – solving these problems requires a lot of computing power.
The disadvantage of decentralization
This issue where a typo sent $ 36 million worth of cryptocurrencies to Ether highlights a significant drawback of decentralization. The blockchain infrastructure was developed primarily with the intention of fostering greater decentralization. For example, it does this by allowing a network of individuals located around the world to process payments in lieu of centralized organizations such as banks. The fact that no single entity can quickly correct human errors like these is one of the drawbacks of decentralization. In December, someone sold their Bored Ape Yacht Club NFT for 0.75 Ether instead of 75 Ether, with a loss of about $ 3,000 instead of $ 300,000. These “fat finger” mistakes and misdemeanors are commonplace, especially among cryptocurrency exchanges.
Blockchain developers have identified techniques for reversing transactions in the past, but the solutions aren’t always easy to implement. After a hacker took advantage of a smart contract in 2016 and inadvertently stole Ether worth around $ 50 million, Ethereum developers were forced to “forage” their blockchain to recover the stolen funds. This means that they essentially built a duplicate of the original blockchain, keeping it identical in every respect except that the stolen funds were transferred to a recovery address. It has been a tense situation as it has raised a debate over Ethereum vs Ethereum Classic.
Some community members believed it violated cryptocurrency principles and continued to use the original Ethereum Classic blockchain. Since Juno is a Proof-of-Stake chain, this key problem may be easier for Juno developers to solve. According to Di Michele, Juno operates on the basis of a governance model, in which token holders have the ability to vote to change blockchain transactions. Consequently, the change of direction requires a vote by the majority of token holders and then a software update.
Speaking of the solutions for this problem where a typo sent $ 36 million worth of cryptocurrency to Ether, Di Michele said the funds will be sent to the correct address in a week or something; although the situation is unfortunate, it can be easily resolved. The funds will be recovered with an additional update that will change the status of the chain, it said. PoS chains are not like Bitcoin as they are governed by governance and, if governance dictates, changes of state can occur.