Technically, Bitcoin is indestructible. But we can send coins to an “unusable” address, which would make them redundant and unused for any purpose or purpose. In October 2011, Mark Karpeles did just that when he paid 2,609 BTC into permanent “oblivion” due to a script error.

How to destroy profits in a week with just one click

We heard about Mt in the previous installment of the Bitcoin History series. Gox suffered his first hack in the summer of 2011. Less than four months later, the stock exchange’s hapless CEO Mark Karpeles suffered another embarrassing story when he was accidentally “wiped out”. Compared to the other losses Gox suffered, this is just a drop in the ocean and therefore largely forgotten in history. However, the case is well worth revisiting as it delivers an alarming story of the dangers of meddling with Bitcoin customers and a lesson on how to destroy coins.

Most of the Bitcoin community is aware of this event, like so many from the early days, on the Bitcointalk forum on October 29, 2011, a user named “genjix” started a thread entitled “Somebody made a mistake and lost a bunch “Money.” To explain, they posted the following code:

Few readers don’t realize the problem looking at the code, but ‘genjix’ is there to explain it. The standard transaction script, in this case “76a90088ac”, should have been “14” instead of “00”, which in the scripting language means that 0 bytes are transferred, ”said Genjix. “It’s a transaction with no purpose. Apparently someone hacked Bitcoin or made their own version and screwed it up – although I don’t know what the purpose was with so much money. “

The answer to the second question was not long in coming from the Internet Relay Chat (IRC) on the mountain’s IRC. Gox, Karpeles, aka Magical Tux, confessed that he was the one who created the faulty transaction script and destroyed 2,609 BTC:

MagicalTux: It’s a problem, but not the worst we’ve ever encountered

MagicalTux: All failed withdrawals were reissued

MagicalTux: I just spent all of my BTC earnings in a week

“At least there is no doubt about the integrity of the transaction, wrote Bitcointalk user“ BTCurious ”:“ You are completely gone. There’s no way I can get it back. “

The “champion” of unrecoverable transactions

It is extremely rare to send coins to a wrong or nonexistent Bitcoin address. All Bitcoin addresses have a checksum which greatly reduces the chance of accidentally entering an incorrect address. However, Karpeles tinkered with the Bitcoin client and selected a valuable transaction to test. As he admitted on IRC:

MagicalTux: I need to limit the number of entries in a transaction, it seems normal bitcoin is not like a 293 entry transaction.

BTCurious has to explain in the Bitcointalk forum:

“The Bitcoin protocol supports a lot more than just sending money from A to B, although this is mostly seen on a normal client these days. Even so, miners have to accept “unusual transactions” as long as they adhere to the Bitcoin protocol.

Another blow to Gox’s reputation

There has been mixed reactions to Karpeles’ confusion, with heated debate on IRC over whether Bitcoin’s scripting capabilities should be restricted to prevent such a mistake. It’s not that simple, however, stated core developer Gregory Maxwell:

Glyph-Minus-229: Can’t the protocol prevent coins from being sent to an invalid address?

gmaxwell: No, the protocol makes a lot possible.

gmaxwell: Transactions are small programs that manage their redemption.

gmaxwell: There is probably no polynomial time that can determine all improbable transactions.

One IRC user disliked the incident and described it as “another blow to the mountain. Gox. “

“So 90% of Bitcoin users trust their money here?” Forum user Raoul Duke wrote. Raoul also commented on Karpeles with the words: “He seems to be on the verge of losing the balance of the mountain. Gox instead of running away with it. ”While speculating about what would happen to Bitcoin, Karpeles made the mistake of sending 438,000 BTC, as he had done in a“ record ”transaction four months earlier, and admitted,“ Just to think about it, that alone made me shiver. “

Bitcoin finiteness

The 2,609 Bitcoins that Mark Karpeles accidentally destroyed in October 2011 cannot be moved, but can be observed. In Tux’s defense, Bitcoin has historically been less user-friendly, and performing complex transactions required more tinkering than it is today.

You will live forever in a Bitcoin address with the unusual name “s-272edf45031dd498e7b3ae89e11ff21b”. In order to increase the possibility of restoring this destroyed BTC, the forum user “etotheipi” wrote: “In order to spend these coins, you have to provide a public key which is equal to“ 0x00 ”for the application Reifemd160 (sha256 (pubKey)). Unfortunately, Reifemd160 only produces 20 byte hashes. Even if you already have a chain that can generate such a hash, good luck finding the associated private key. “

Assuming the Mt. Gox coins only lost the equivalent of $ 8,300 at the time, that wouldn’t be considered a big deal. Today those coins would be worth $ 26 million. The fact that they have been sitting at the same address untouched for 8 years is proof of Bitcoin’s finality.

Disclaimer of liability: This information is provided as a personal blog, not general information or investment advice. We are not responsible for your investment decisions.

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page