Bitcoin Forum

If you’re at all familiar with the history of Bitcoin, you’ll probably know a little something about the Value Overflow Incident - also known as the moment that nearly destroyed Bitcoin. But how did this incident actually come about, and what would have happened if it wasn’t stopped? Stick around as we dive deeper into this controversial moment in crypto history - the moment that could have dismantled the entire cryptocurrency industry in one go. Let’s look into how someone made 184.4 billion Bitcoin appear out of nowhere, and what happened immediately after.

What actually happened?

On 15 August 2010, just under two years after Satoshi Nakamoto released his famous whitepaper, an unknown hacker nearly took down Bitcoin. The assailant randomly generated 184,467 billion Bitcoin out of nowever, in an attack that is now known as the Value Overflow Incident.

The hacker recognized a flaw in the early Bitcoin blockchain system: While there was a fixed maximum supply of 21 million Bitcoin, the code for checking Bitoin transactions did not work if the outputs were large enough to cause them to overflow (hence the Value Overflow Incident). The hacker, with one transaction, managed to create 8,784x the number of Bitcoin (BTC) that should never have existed.

So how did someone make 184.4 billion Bitcoin (BTC) appear out of nowhere? They found a hole in the code, and they used it.

https://www.youtube.com/watch?v=DMp6XmRlCVM

What was done to prevent the untimely death of Bitcoin?

Within 3 hours of the incident being reported on Bitcoin Talk, Satoshi Nakamoto had a code fix up and running. 5 hours after the incident, Satoshi released a new version of Bitcoin - Bitcoin 0.3.1. This ensured that any attempt to exploit the fault in the code was rewound, effectively erasing the hacked 184.467 billion Bitcoin.

Two different versions of Bitcoin existed after this point - the good chain (version 0.3.1) and the bad chain (the hacked version). Nakamoto urged miners not to mine the bad chain as it would cause the good chain to take longer in becoming the dominant chain.

Just 19 hours after the saga began, Bitcoin 0.3.1 became the dominant chain - effectively saving the entire cryptoasset industry, and building it into what we know today.

Today, trading platforms and exchanges like eToro, Kraken, and Coinbase are thriving, and we couldn’t have experienced the thriving cryptoasset industry without the quick reaction of the Bitcoin pioneer, Satoshi Nakamoto.

https://twitter.com/jdetychey/status/1137026239582134273

What would have happened without the soft fork?

If Satoshi Nakamoto had been unable to rectify the hack, Bitcoin would almost certainly have died. Basically, there would have been no cryptocurrency industry to speak of. Bitcoin’s price would have dropped like a stone, and within 24 hours the entire system could have collapsed.

Today

Today we have a thriving cryptocurrency industry, with an overall market cap of around $226 billion USD (at the time of writing). Still, we have to ask ourselves exactly how someone made 184.4 billion Bitcoin appear out of nowhere. We need to remember that cryptocurrency and blockchain technology are not flawless designs - they’re designed by people, and people are inherently fallible. With that being said, the quick thinking and ingenuity of people is also what has saved this industry time and time again - here’s hoping to an equally (almost) as exciting future ahead.

https://www.cryptoninjas.net/2019/11/04/how-someone-made-184-4-billion-bitcoin-appear-out-of-nowhere/

I didn't know about this history.
Are there any reference of this event here in bitcointalk forum? Something written by Satoshi?

That hacker is not so evil. He exposed the bug in a time when things could be easily fixed. Thank God that happened long ago, and not recently.

Yes.

The incident was initially spotted and flagged up by Jeff Garzik here: https://bitcointalk.org/index.php?topic=822.0

The main thread in Development & Technical Discussion is here: https://bitcointalk.org/index.php?topic=823.0

It actually seems like Gavin Andresen wrote a temporary fix first (https://bitcointalk.org/index.php?topic=823.msg9524#msg9524), before satoshi wrote a permanent fix about 20 minutes later.

satoshi then released this as version 0.3.10 a few hours later: https://bitcointalk.org/index.php?topic=827.0

This was actually one of the lesser known incidents for bitcoin that hasn't been discussed for ages and is a nice bit of information that during the early days, nothing was perfect but everyone involved strived to get a fix as soon as possible. I've read the original thread years before this has been brought up again (thanks to @o_e_l_e_o for bringing up the original link to the discussion) and it fascinates me the coordination in between different devs and community members all at once, and fixed the problem in less than ~12 hours.

Excellent infobit that I had never heard about. Well deserving of Merit given.

didn't know once upon a time there was an incident like this that had happened. if the hacker sold the 184B BTC even just for few cents during that time he still can come up with huge amount of profit from his work. it would have been very disastrous for everyone if it happens these days,  some people today already depend to crypto industry and if all of a sudden crashes lives will also be broken. its a good thing that was solved and the hacker had seen that hole long time ago.

Good info. But it's a completely plagiarized text from the cryptoninja website. Not a single word or link added or deducted by the OP. OP's almost every post are just a copy paste from different websites.

Do you know that one of the major factor of bitcoin price rise is its limited supply. If for any reason (its impossible todate) the supply of bitcoins get increased, the price will shoot down to the floor.  Fortunely there is no more flaw in bitcoin block-chain and everything is smooth and the people confidence is intact.

I am genuinely interested on how this will be handled, if something like that happened now.  ???  There are a lot more transactions being done now and

I wonder if miners would all work together to "rewind" the Blockchain, if it happened again. I think it is in everyone's interest to do this again, because

losing a few coins with a "rewind" is better than losing the value of every other coin you own, if miners did not want to participate. Fortunately for us, a

lot more eyes are currently on the Open source code and also on what is happening on the Blockchain, so it will even be spotted a lot quicker now.  8)

The funny thing is, Bitcoin isn't the only cryptocurrency that has been affected by so-called inflation bugs. Numerous other cryptocurrencies, including some prominent ones have been exploited in this way.

Back in February, Zcash disclosed that it had secretly patched an inflation bug in 2018 that could have crippled the blockchain. Similarly, Zcoin, SmartCash, Zoin and a few others had a bug that could have toppled them, but managed to patch them and survive.

Let's hope nobody discovers an exploitable inflation bug in Monero's code, since that could cause some serious issues.

Fascinating. Although it is quite a meal of copy-pasta, it’s good information. I haven’t seen this before.
It’s good that it was patched so far back and that OG Master Sat was there to fix it so timely.
The code has come a long way.

Thanks for the message. We actually are an agency that create content for news outlets and we reshare the content for them. As you can see we included the cryptoninjas link at the bottom as reference to the original post.

I am not sure how this is at all an issue if we included a link back in the first place. We are also open to feedback if you would like us to edit the intro to let everyone know its a repost?

there was a similar bug recently done by bad code by matt corrallo and supposedly rviewed and allowed to enter bitcoin cores codebase by gmax. lucky the code was not exploited and a patch was released. but it still happens.

back in 2010 though (that bug was exploited) was much easier to get many participants to drop a 19hour old chain without much financial harm of doing so(as it becomes a double spend where the customer suddenly gets their money back) because not many services existed back then and not many transactions per block were being performed

19 hours is not just 114 blocks of 1 or 2 tx's each which are most likely to just be small 'tester' transactions.. but these days 19hours is 114 blocks of ~2000. these days its not just something that may affct a couple hundred pople/transactions users.. its something that can now affect a couple hundred thousand of users/transactions. these days its not 1cent at risk per btc, but $8k+ at risk per btc
so orphaning off a dud chain, causing a double spend event causes more consequences and can cause more companies to be less accepting/willing to just do it for the benefit of bitcoin longevity

A great reminder of such happening. I actually have already read and known about this piece of history in Bitcoin and its quite fascinating how exploits are done on these complicated code with determination. I also admire and impressed that a decentralized network has proven that with its system, the power is upon the people and not some central organization, and the fate is totally dependent to the users of the platform, thus the soft fork won over the exploited version of the blockchain.

these days people are now reliant on core releasing an update
as said in previous post in 2010 a couple dozen people (who were predominently coders) could self patch thier own code. these days of a couple hundred thousand people that could be affected in a similar 19hour event. (who are not predominantly coders) have to rely on core to give them a patch

after all. imagine an bug was found now. it was exploited and although core devs taking hours to figure out the cause and make a patch. a exploiter already planned the evnt and had code that also does other nasty stuff, just announces he has a version that can patch the first bug (but trojans new bugs) .. people have to review his codebase. and learn to trust it. or wait and pray that core hurries up.

people have already prefered to wait for core and ignore any non core devs from offering an unreviewed client that is advertised as fixing bitcoin issues

bitcoin 2019 is not the same as bitcoin 2010. so dont think the events of 2010 prove what 2019 is in regards to decentralisation and community power

that is just what i thought. if that would happen now, that would be the END and with the pace the bitcoin community is going the fix would have taken a good amount of time

Wow, such informative post. Never thought that the history of btc was something special. I really admire Satoshi for being so attentive and resolved the issue in a wise way. Also, I never heard about the two versions of btc before due to the hacked issues. It's amazing to ready some great contents like this. So, btc almost died but it recover and still surviving until this day.

I opened a thread about that supposedly "bug" here, Did you know? (https://bitcointalk.org/index.php?topic=5118799.0).

I think it is important to recognize that Bitcoin is a new technology, yes 11 years is nowadays a long time for technology so today we see it at a stage that is very mature and very resilient to attacks, with so many developers maintaining it and so many users constantly testing it and so many miners securing it,,, but any new tech was going to have exploits and loopholes, which in Bitcoin's case was found very early on.

Like you said people are inherently fallible. This is why it is good not just one or a few people decide how things happen in the network.

I didn't even think about it, thank you.

I see, after this incident, Satoshi left and stay anonymous, does it somehow mean that the problem that a bitcoin technology will face in the latter future is 100 % zero? Meaning, that bitcoin will be invulnerable to attacks? If this is the case, we should really adore Satoshi's contribution to blockchain technology. if this scenario will still occur like:

We're all stop with a big stung on ourselves looking at how our bitcoin will turn into losses. This reminds me that belief about "There's no safe system" is somehow true because before, I do really think that bitcoin is invulnerable even in beta.

The only way it would happen again is if they did a soft fork that had mistakes. Most forks carry some mistakes - the last steem fork had so many bugs they had to rapidly release fixes - luckily in the steem universe the top twenty witnesses decide what version to run, so it's easy to correct.

With bitcoin it would be much harder given that the miners are numerous and you'd have to persuade them one by one to run the corrected version - that's kind of why the devlopers are so resistent to "improvements" and are so conservative about soft forks. Forks carry loads of risks.

nope
people are to reliant on core. and even just last year there was a bug at software level that ignored doing a vital check at a certain time, this meant it could have been exploited to create more coins.

luckily it was not exploited. but the problem is if it was exploited everyone has become reliant on core to hand out a patch, which should they choose to or not becomes a question. not a certainty.

we are not in the 2010 scenario of everyone coding their own independant clients and if there is a bug patching it themselves. instead the community is reliant on core.
we are not as decentralised as we may think

Wow, I would have not have known this if not because you dug it up which I will make more of my finding too to verify this because all the years that I have been using bitcoin, I have never heard that it was once hacked, but it is a good thing that the bug was found before satoshi left the forum or left bitcoin, if the bug had been after satoshi disappeared, this would have been a very big disaster for bitcoin and would have tarnished its name in the heart off people.

This shows how very important satoshi is in the activities of bitcoin, and I don’t know why he disappeared. I believe that if he was still around, maybe all these hackers would have actually found it quite difficult to be doing all the things they are doing that is discouraging cryptocurrency users.

I never knew of this incident and things could have turned out really differently if the hacker had won the day. Good job Satoshi Nakamoto and the general consensus at the time took the Bitcoin core 3.01 as the dominant chain and saved the day, otherwise we would not have the flourishing market we know as the CMC today and so many people making and generating the wealth they have generated over the past ten years, thanks to the Bitcoin story that has evolved thus far.

I don't agree with this conclusion, that bug was just a programming error, if Satoshi wouldn't fix it, someone else would fork Bitcoin and do it instead. Maybe Bitcoin would have had worse reputation if it took too long to fix that bug, but there's nothing fundamental about that bug that would kill the idea of cryptocurrency. We had some big disasters in altcoins, and they are still alive and well, like Ethereum and the DAO, for example.

Hahaha! That's an interesting take on it! It's certainly fortunate that it happened earlier rather than now. Can you imagine if the bug was only exposed now? Yikes.

Was the hacker able to use those fake generated coins in trading? Even 0.01% of that would have been enough to work as a bounty for hacker if he was able to get it. Sigh that there was a flaw but I'm sure we are not going to witness that ever again. If not completely destroyed, the hacker would have taken partial advantage of that hack?

And nice article you have brought to us.

I definitely didn't know about this even though I pride myself in learning all about Bitcoin from it's earliest developement stage, reading this felt like reading a thriller and my heart actually pounded when it came to the part about how Satoshi fixed the issue within just a few hours after it was reported and returned normalcy to the bitcoin network, always thought that Bitcoin cane out perfect from the beginning but I prefer the way it happened, it simply means that it was improved and is now as strong as it is ever going to be.

That's was a timely intervention on the part of these developers you know and i think the crypto industry is indebted to them for this quick solution that they had to fix in the shortest time possible. I really have a catching up to do to get to the crust of this matter. Though it's way into the past but every tiny bit of information in this industry is worth it!