Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $2,17 trillion. Bitcoin continues to trade at around $62,300. Ethereum experiences no changes and stagnates at around $2,400. XRP is down by 2%, Solana by 1%, and Dogecoin by 3%. Almost all altcoins are trading in the red, with very few exceptions. The DeFi sector decreased the total value of protocols (TVL) to around…
The Story Of Bitcoin And Ethereum’s Reversed Blockchains
3.1 k views
Decentralization is the primary selling point of the three worlds of Bitcoin, crypto, and the web. There are several reasons for this. Some are related to the increased transactional efficiency that decentralization can provide. Others are related to creating permissionless, censorship-resistant digital networks.
Most importantly, decentralization weakens any single point of failure, bolstering network security. This not only keeps a network as close to unbiased and ‘neutral’ as possible but almost guarantees its immutability.
Yet the crypto world hasn’t always lived up to that lofty expectation. For example, the two most popular blockchain networks have reversed their supposedly ‘immutable’ blockchain ledgers. Yes, that includes Bitcoin!
This article will review some early and ‘dirty’ history from Bitcoin and Ethereum’s developing years. How –and why – could these blockchain communities allow their sacred history to be altered? Why should I be so sure it won’t happen again?
Bitcoin: The Overflow Bug
As most Bitcoiners know, Bitcoin’s supply is programmatically capped at 21 million coins. This design is fundamental to the cryptocurrency successfully operating as sound money or digital gold. Therefore, anything that threatens this feature is an actual threat to Bitcoin’s value.
On August 15th of, 2010, Bitcoin’s overflow bug did precisely that. An anonymous hacker managed to produce 184 billion Bitcoin without mining on an earlier blockchain version. That’s 8784 times more Bitcoin than is supposed to exist.
At block 74,638, two Bitcoin addresses received exactly 92,233,720,368 coins, as discovered by Bitcoin developer Jeff Garzik. This occurred due to an exploit that caused Bitcoin transactions not to be appropriately validated if outputs were large enough to overflow when summed.
Thankfully, it fixed the bug quite quickly. First, Satoshi Nakamoto – Bitcoin’s anonymous creator – released code to fix the bug within 3 hours of being spotted. Then, in quick collaboration with Gavin Andresen, he released v.0.3.1 of Bitcoin before the day was over.
Like all Bitcoin upgrades, this upgrade was a backward-compatible soft fork implemented before block 74,638. Therefore, while it fixed the bug, the promotion reversed all transactions after the 184 billion Bitcoin were produced.
In retrospect, the decision was only necessary. Had the exploit gone unaddressed and unreversed, the overwhelming wealth concentration it caused would have destroyed Bitcoin’s functionality as money. Furthermore, the mere record of the transaction on the blockchain would have crushed all confidence in both the asset and the network.
The fix was implemented quickly thanks to the relatively minor community at the time, a soft fork, and the nature of the threat. It also helped that Bitcoin’s founder was still active at the time. As a result, he could use his influence to mobilize a quick solution to the exploit.
Since Bitcoin’s security is now assured by many people, and Satoshi is gone, such an incident is improbable to reoccur. Moreover, having happened so long ago, far fewer people have heard of this rollback than Ethereum’s, which occurred five years later.
Ethereum: The DAO Hack
A DAO is short for “Decentralized Autonomous Organization.” It’s governed by decentralized blockchain infrastructure with rules encoded as smart contracts.
In April 2016, Slock. It launched a project by the same name to fund dApps within the Ethereum ecosystem. Investors could purchase DAO utility tokens in exchange for Ether, as many ICO startups today.
The DAO grew enormously in popularity within a month, accruing $150 million worth of Ether in crowdfunding. In addition, many investors were wealthy members of the Ethereum foundation that benefitted from Ethereum’s initial offering.
However, on June 17th, 2016, the DAO was exploited such that over $50 million in funds were stolen from investors. The attacker had recursively called a split function, retrieving funds to a child DAO multiple times for 3.6 million Ether. Furthermore, these funds were programmed to be immovable for 28 days after withdrawal to the child DAO.
This left Ethereans with a choice to deliberate. Would they respect the chain’s “code is law” ethos and do nothing, or would they reverse the blockchain to return users’ funds? The community chose the latter in a vote, ultimately hard-forking the chain at a point before the hack occurred. Though the original voice was for a soft fork, the community eventually abandoned that option over security concerns.
The original chain would live on to be known as “Ethereum Classic,” which the strongest adherents to the “code is law” philosophy clung to. Unfortunately, though it remains a top 50 cryptocurrency, most miners securing the network still migrated to the new Ethereum chain. As such, Ethereum Classic has already been 51% attacked multiple times.
Vitalik Buterin – founder of Ethereum – argues that the hard fork to rewind the chain only occurred due to a peculiar set of circumstances. First, a hack happened within a much smaller community that almost everyone had agreed was malicious. Furthermore, with the hacker’s stolen funds locked for 28 days, they were allowed to stop it.
This would likely not happen again. However, a year later, the community voted against rolling back the chain to reverse the effects of the Parity wallet hack.
Conclusion
New technologies experience growing pains, and both the Overflow Bug and DAO Hack occurred during Bitcoin and Ethereum’s infancy. However, these should not taint either chain’s reliably immutable reputation, given that the circumstance around each rollback has changed so drastically.
Btc
Bitcoin
$62.547
price
price
0.84959%
price change
Nevertheless, keep in mind that both chains have a spotless history. Security is hard work. When breached significantly, it must make unfortunate compromises to maintain it.
Written by
Andrew Throuvalas
@andrew
476 posts
More author posts
Sam Bankman-Fried May Now Contact FTX Employees — But There’s a Catch
Lawyers for FTX’s disgraced former boss, Sam Bankman-Fried (SBF), have reached an agreement with prosecutors allowing him to contact certain FTX employees. Besides certain restrictions, the 30-year-old may contact such parties through a host of new mediums. The New Rules Updated terms surrounding Bankman-Fried’s contact restrictions were sent to Lewis A. Kaplan – a judge for the Southern District of New York – in a letter on Monday. Bankman-Fried’s lawyers said the updated conditions were a response to the government…
2 years ago
Uniswap Centralized? A16z Flexes Voting Power to Crush Governance Proposal
The popular decentralized exchange, Uniswap, is having one of its latest governance proposals stonewalled by the crypto venture capital giant Andreesen Horowitz (a16z). The ongoing proposal vote, which ends on February 10, is currently 38% weighed against the change – almost entirely due to the software investor. So Much for Decentralization The proposal, tabled by 0xPlasma Labs on February 2, would have Uniswap v3 deployed to BNB chain. To enable the deployment, the proposal chose to use Wormhole – an…
2 years ago
Silvergate Bank Hit With Fraud Probe Over FTX-Alameda Relationship
Crypto bank Silvergate is under investigation by the US Justice Department’s fraud unit for its dealings with FTX and its sister trading arm, Alameda Research. The investigation is reviewing accounts concerning both businesses, which have been widely accused of engaging in a multi-billion dollar fraud using FTX customer funds. What Happened at Silvergate? As reported by Bloomberg on Thursday, the La Jolla, California-based bank hasn’t been accused of any wrongdoing, and investigations could end without any charges being laid. However,…
2 years ago
Bitcoin Should be Banned in the United States: Charlie Munger
Berkshire Hathaway’s vice chairman, Charlie Munger, called for a ban on cryptocurrency in the United States on Monday, similar to the one in China. In an op-ed published with the Wall Street Journal, Munger argued that Bitcoin isn’t a currency, commodity, or security, but simply a form of gambling “ with a nearly 100% edge for the house. As such, the enactment of a federal law should ban such things from happening. Munger cited the Chinese communist party’s ban on…
2 years ago
Oxford Student Jailed After Stealing $2.4 Million Through Crypto Scam
Wybo Wiersma – a 40-year-old Oxford University graduate – has been sentenced to four and a half years in prison after scamming over $2 million in crypto from unsuspecting victims. Following his arrest in 2019, the Netherlands extradited the Dutchman back to the United Kingdom (UK) in 2021. Following a five-year investigation by the South East Regional Organised Crime Unit (SEROCU), he pled guilty on January 26 to the Oxford Crown Court. A Five-Year Investigation As reported by the Daily…
2 years ago
Like FTX, Celsius Used QuickBooks to Handle its Accounting
An independent examiner has revealed shocking details surrounding the inner workings of Celsius – a crypto lender that filed for bankruptcy in July 2022. The examiner claimed that Celsius did not operate by the business model that it presented to customers. He likened it to a Ponzi scheme, much like FTX – a company that happened to have used the same accounting software: QuickBooks. The Truth About CEL Token Per a filing from examiner Shoba Pillay on Tuesday, Celsius had…
2 years ago
Publish your own article
Guest post article. Guaranteed publishing with just a few clicks
START PUBLISHING ADVERTISE WITH USBrowse categories
Explore trending topics in the crypto community right now.
Bitcoin
SEC Greenlights Multiple Bitcoin ETFs, Signaling Major Leap for Cryptocurrency Markets
The U.S. Securities and Exchange Commission (SEC) has made a landmark decision by approving 11 spot bitcoin exchange-traded funds (ETFs). This move represents a significant moment in the cryptocurrency industry, marking a shift towards greater institutional adoption and accessibility for investors. The approved ETFs include products from major firms such as BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, ARK 21Shares Bitcoin ETF, Bitwise Bitcoin ETP Trust, WisdomTree Bitcoin Fund, Fidelity Wise Origin Bitcoin Trust, VanEck Bitcoin Trust, Invesco Galaxy Bitcoin…
Marius Bogdan Dinu 
@bdinu89
@bdinu89
1 year ago 
597 views
Bitcoin Should be Banned in the United States: Charlie Munger
Berkshire Hathaway’s vice chairman, Charlie Munger, called for a ban on cryptocurrency in the United States on Monday, similar to the one in China. In an op-ed published with the Wall Street Journal, Munger argued that Bitcoin isn’t a currency, commodity, or security, but simply a form of gambling “ with a nearly 100% edge for the house. As such, the enactment of a federal law should ban such things from happening. Munger cited the Chinese communist party’s ban on…
2 years ago 1.5 k views
Tesla’s BTC Positions Remained Unchanged in Q4 of 2022
According to a new earning report from automotive manufacturer Tesla, the company did not sell any of its BTC holdings in the fourth quarter of 2022. Amid speculations that the company had traded BTC during the testing bears, CEO Elon Musk revealed it was yet holding on to its BTC stash. Tesla Maintains Holdings After Initial Sell-Off In Q2 of 2022, Tesla opted to sell 75% of all its BTC. The car manufacturer received close to $950M in exchange. Notably,…
2 years ago 1.5 k views
Here’s When Grayscale Debates the SEC in Court on its Bitcoin Spot ETF
The District of Columbia Court of Appeals has marked a date for when Grayscale and the Securities and Exchange Commission (SEC) may present oral arguments regarding the approval of a Bitcoin spot ETF. Each side will present its case at 9:30 am ET on March 7, with the SEC arguing against the product, and Grayscale arguing in favor. Grayscale VS SEC The court date – revealed in a court order filed on Monday according to CNBC – is much earlier…
2 years ago 1.8 k views
Ethereum
Ethereum’s Zhejiang Staking Withdrawal Testnet for Shanghai is Live
At 15:00 UTC on Wednesday, the much-anticipated Zhejiang testnet for staking withdrawal went live on Ethereum’s Beacon chain. Zhejiang will enable the testing of the Ethereum Improvement Proposal (EIP) 4895 which allows for staking withdrawals. This is in preparation for the network’s next major update, the Shanghai hard fork slated to launch sometime in March. Users Can Make Simulated Withdrawals with Zhejiang In a tweet yesterday, DevOps engineer at Ethereum foundation Barnabas Busa gave details about the Zhejiang testnet slated…
2 years ago 1.6 k views
Ethereum Devs Disagree Over Technical Tweak as Shanghai Upgrade Nears
Post-merge Ethereum users have been eagerly awaiting the commencement of the network’s next major upgrade, Shanghai. However, after over 3 months of prep time, it appears the Shanghai rollout isn’t going as smoothly as expected. What Exactly is the Shanghai Upgrade? In September last year, the much-publicized Ethereum Merge also known as the Ethereum 2.0 upgrade went live. Ethereum underwent some significant changes as its consensus mechanism transitioned from proof-of-work to a cost-efficient proof-of-stake system. However, since the Beacon launch…
2 years ago 1.6 k views
FTX Hacker Converts 50k Stolen ETH to BTC
Per a report from blockchain analysis firm Chainalysis, the attacker behind the Nov 11 FTX exploit, is converting the stolen ETH to Bitcoin. There were muted fears the seemingly inexperienced perpetrator could dump all its ETH holdings. On Sunday, the attacker dumped 50k ETH on-chain, with ETH's price dipping by almost 7%. https://twitter.com/chainalysis/status/1594349583416840199?s=20&t=pgvQHeVytI20eKQ1ls9bxw Hacker Moves 50,000 ETH to New Address Over the past week, the perpetrator had been steadily swapping the cryptocurrencies they had carted off for Ether tokens. This…
3 years ago 1.9 k views
Censorship Concerns: 51% of Ethereum Blocks Now OFAC Compliant
According to new data, over half of the blocks on the Ethereum network now reportedly comply with the US Treasury OFAC’s standards. This comes roughly a month after the platform’s monumental merge update. Phasing Out Tornado Cash The Office of Foreign Assets Control is the intelligence and enforcement agency of the US Treasury Department. Indeed, the OFAC administers and enforces US financial sanctions. A prime example of this is the recent, highly-publicized ban on crypto mixer Tornado Cash. According to…
3 years ago 1.8 k views
Trading
How to Leverage Arbitrage Opportunities in Crypto Markets
Cryptocurrency arbitrage has become an increasingly popular investment strategy as the crypto market grows and evolves. Arbitrage involves taking advantage of pricing discrepancies between markets or exchanges to profit. Investors can leverage profit opportunities by understanding cryptocurrency arbitrage while managing associated risks. In this guide, we'll explore cryptocurrency arbitrage and how it works. A Bitcoin-related example will help us illustrate the concepts of this strategy. What is Arbitrage and How Does it Work in Crypto Markets Crypto arbitrage trading is…
2 years ago 3 k views
The Different Types of Copy Trading in Crypto
Are you interested in trading cryptocurrencies but feel intimidated by the complexity of the process? Copy trading is a great way to get into crypto without needing to be an experienced trader. With copy trading, investors can benefit from the experience and knowledge of more experienced traders, allowing even beginners to succeed. How does copy trading work, and which tips do you need to know to succeed? In this article, we'll explore all aspects of copy trading in crypto. What…
2 years ago 1.7 k views
How to Spot an Unsafe Crypto Exchange
Cryptocurrency exchanges have become increasingly popular as they provide a platform for people to buy and sell digital assets. Unfortunately, not all crypto exchanges are safe or reliable. With the rise of cybercrime and fraud, you must learn to spot an unsafe crypto exchange before investing your money. This guide will help beginners identify and avoid potential risks when selecting a cryptocurrency exchange. The Role of Crypto Exchanges on the Digital Assets Market Cryptocurrency exchanges play a crucial role in…
2 years ago 2.2 k views
What Is Grid Trading in Crypto?
Crypto grid trading has become a popular strategy because of its ability to help traders capitalize on market volatility. Grid trading means you can produce consistent profits by taking advantage of price differences in different markets or time frames. By establishing buy and sell orders at predetermined intervals, you can take advantage of these fluctuations in an automated way. This guide will explore the different aspects of grid trading and provide an overview of its benefits, challenges, and more. Through…
2 years ago 1.6 k views
Tech
Introducing una Messenger: A Paradigm Shift in Blockchain Connectivity
The digital landscape is set for an unprecedented transformation with the introduction of una Messenger, the latest innovation from web3 development powerhouse Wemade. This platform represents an evolution of the "PAPYRUS Messenger," serving as the cornerstone of the ambitious "unagi" initiative, aimed at catalyzing the mass adoption of blockchain technology. The "Unbound Networking & Accelerating Growth Initiative" seeks to bridge the divides between diverse blockchain services and networks, heralding a new era of interconnectedness. A New Frontier in Blockchain Communication…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 574 views
Bit2Me Champions WEMIX Token in Pioneering European Listing
Bit2Me, Spain's premier virtual asset exchange, has recently broadened the horizons for cryptocurrency enthusiasts by listing WEMIX, the cornerstone token of the WEMIX3.0 blockchain ecosystem. This marks a notable achievement as WEMIX's inaugural venture into the European market, emphasizing the token's role in facilitating a range of blockchain-based activities, from gaming transactions to decentralized finance (DeFi) applications. Launched with the intention to democratize access to WEMIX for the 450 million Spanish speakers around the globe, this strategic move aligns with…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 404 views
CryptoVirally Expands with Fresh Crypto Marketing Offers and Cointelegraph Upgrades
In an exciting update for the cryptocurrency marketing landscape, CryptoVirally has announced a series of new entries and enhancements to its already comprehensive range of services. These updates, aimed at providing tailored marketing solutions for crypto projects, include new limited-time offers and expanded options for Cointelegraph publications. Limited Offers: A Game-Changer in Crypto Marketing CryptoVirally's limited offers section presents an enticing opportunity for crypto projects to leverage high-impact marketing services at discounted rates. These offers, available for a limited period,…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 465 views
Breaking Boundaries in Blockchain: WEMIX’s ‘una Wallet’ Sets New Standard for Multi-Chain Asset Management
The WEMIX Foundation has unveiled 'una Wallet,' a revolutionary digital wallet designed to offer unparalleled convenience and security in managing digital assets across various blockchain networks. The announcement, made on January 17, 2024, signifies a new era in the seamless integration of multiple blockchain protocols, including Arbitrum, Avalanche, BNB Smart Chain, Ethereum, Kroma, Optimism, Polygon, and WEMIX3.0. 'una Wallet' is more than just a digital wallet; it represents the culmination of WEMIX's innovative efforts in the blockchain space. It serves…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 592 views