Bitcoin Exchange Almost Gave Away $20 Trillion Worth of Coin for Free

Bitcoin Exchange Almost Gave Away $20 Trillion Worth of Coin for Free

posted Saturday Feb 24, 2018 by Scott Ertz

Bitcoin Exchange Almost Gave Away $20 Trillion Worth of Coin for Free

There's no question that the technology topic of this year has been cryptocurrency and blockchain. For the tech enthusiasts in the industry, the idea of decentralizing the data and processing is very appealing. Moving the transaction processing away from "traditional banks" is a draw for the market, but it is also turning out to be a problem.

One of the things that the banks have going for them is compounded knowledge, something that only comes with time and experience. Most of the banks have been around a long time and learned the hard lessons about how banking works years or decades ago. In the crypto world, the currency exchanges, which often act in the absence of a bank, are trying to forge their own paths. Being as they are all running in the technology startup environment, they eschew the existing wisdom and look for new ways to do things. While that has helped in a lot of industries, it seems to cause a lot of trouble in this one.

For example, we have seen several very large heists, such as NiceHash, Coincheck and, of course, Mt. Gox. Sometimes these issues are unavoidable, but sometimes the lack of experience in the industry is the problem.

An example of that comes to us care of Zaif, an exchange run by Tech Bureau Corp. out of Japan. For almost 20 minutes, all requested transactions had zero charge. Now, that is not to say that there were no transaction fees; the entire transaction was zero charge. A few users discovered how it worked and "purchased" about $20 trillion worth of Bitcoin. Yes, that is trillion with a T.

The company waited 4 days after the incident before announcing the issue. They attribute the issue to a glitch, but revealed no information about the glitch itself. They did promise that they would work to prevent future issues. Obviously, the transactions were invalidated and no one received or lost anything during this period. The only exception is Zaif, which lost a lot of trust, both from the crypto community and from the Japanese government. The Financial Services Agency is currently investigating what happened and whether or not the organization is secure enough to operate.

As we have mentioned in the past, it is important to remember when getting into cryptocurrency, there is always going to be the loom of technological collapse, so keep that in mind.

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