The bug which lost more than $600M in various cryptocurrencies a few hours ago • Hacker News Board

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#101

Post by mrtksn » Thu, Aug 12, 2021, 6:07 PM UTC

legutierr wrote: post #99

mrtksn wrote: post #14

Cryptocurrencies are fascinating but the irreversibility is not a feature but a bug. I don't get the appeal for irreversibility. A legitimate trade always occurs between willing partners, why would you be so afraid that the transaction would be cancelled? The only legitimate use that comes to my mind are complex financial instruments where things mostly happens with an assumption that the underlaying assets are very…

> Sometimes mistakes happen(a faulty system, a design bug or straight out human error and people who are trying to take advantage of those), most of the time these are correctable. These errors are correctable if the counter-parties trust each other, or at least have a relationship that they don't want to undermine by being petty. Immutable blockchain systems are valuable in part because they allow entities to transa…

How do they transact if they don't trust each other? You have the guarantee that the money your received is not going back but what kind of guarantee does the receiver of product/service has?

Yes - so far, it worked well for extortion with ransomware but is that something that we want to have? Can you think of a legit business case where the merchant providing the promised service is guaranteed and all you need is a method to receive the payment? All that when the merchant and the buyer don't trust each other at all and on't have a conflict resolution mechanism. What do they trade exactly?

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#102

Post by t0mbstone » Thu, Aug 12, 2021, 7:04 PM UTC

paulgb wrote: post #30

MauranKilom wrote: post #18

Very ironic (or topical?) for a crypto exploit to boil down to finding a hash collision.

“Find a hash matching these digits” is roughly Bitcoin’s proof of work system. Maybe another way of looking at this is that these weren’t hackers, they were just miners who found a more lucrative coin to mine.

OMG that's brilliant

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#103

Post by nybble41 » Thu, Aug 12, 2021, 8:13 PM UTC

mrtksn wrote: post #14

Cryptocurrencies are fascinating but the irreversibility is not a feature but a bug. I don't get the appeal for irreversibility. A legitimate trade always occurs between willing partners, why would you be so afraid that the transaction would be cancelled? The only legitimate use that comes to my mind are complex financial instruments where things mostly happens with an assumption that the underlaying assets are very…

Irreversibility in the core protocol is a feature, and a necessary one at that.

If you start with irreversible payments and you need payments to be reversible with some kind of review/appeal process you can add reversibility through escrow. The classic arrangement is a 2-of-3 multi-key system where the payment is made to an escrow address where it can be either finalized or refunded only when at least two key holders concur; the third key, held by a neutral third party, is used to settle disputes when the payer and payee cannot come to an agreement on their own.

There are, however, situation were reversible payments are a liability, and there is no way to build an irreversible payment system on top of a reversible one. For example, you can't build a reliable escrow system on top of reversible payments since the payer can trivially circumvent the escrow by unilaterally revoking their payment to the escrow account.

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#104

Post by rahimnathwani » Thu, Aug 12, 2021, 9:20 PM UTC

Clewza313 wrote: post #5

Here's the original thread, as opposed to a random person quoting a random tweet halfway into it: https://twitter.com/kelvinfichter/status/1425217046636371969 https://threadreaderapp.com/thread/1425217046636371969.html

Calling dang.

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#105

Post by NicoJuicy » Thu, Aug 12, 2021, 9:29 PM UTC

exo762 wrote: post #60

jokoon wrote: post #19

I'm having a great laugh every time I hear about crypto-stuff goofs. Who thought an amazing new P2P invention would improve the image of normal money and traditional banks?

> Who thought an amazing new P2P invention would improve the image of normal money and traditional banks? Shady stuff that happens in the banking system usually happens behind the closed doors and we don't hear about it for years, if ever. Crypto/DeFi is new and exciting - it gets a lot of attention from press. It is still way easier for me to trust code than to trust people. Call it a character trait / flaw if you w…

Can't really hide lost funds worth 600 million $ because of a hack.

"Exciting" or not.

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#106

Post by [deleted] » Thu, Aug 12, 2021, 10:02 PM UTC

smaryjerry wrote: post #93

christkv wrote: post #56

Earlier quoted context omitted.

It’s valued at 600 million that does not mean it can be liquidated for 600 million.

That is literally what that means. Market caps are what they are because everyone who thinks it is worth less has sold and everyone who thinks it’s worth that or more will buy. There’s some outliers but in general these coins are trading their entire market cap over the course of maybe a month or less. Liquid generally means short term, if you can sell it for cash in under a year then it is liquid. Sure if you tried…

[deleted]

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#107

Post by [deleted] » Thu, Aug 12, 2021, 10:21 PM UTC

legutierr wrote: post #99

mrtksn wrote: post #14

Cryptocurrencies are fascinating but the irreversibility is not a feature but a bug. I don't get the appeal for irreversibility. A legitimate trade always occurs between willing partners, why would you be so afraid that the transaction would be cancelled? The only legitimate use that comes to my mind are complex financial instruments where things mostly happens with an assumption that the underlaying assets are very…

> Sometimes mistakes happen(a faulty system, a design bug or straight out human error and people who are trying to take advantage of those), most of the time these are correctable. These errors are correctable if the counter-parties trust each other, or at least have a relationship that they don't want to undermine by being petty. Immutable blockchain systems are valuable in part because they allow entities to transa…

[deleted]

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#108

Post by robcohen » Thu, Aug 12, 2021, 11:01 PM UTC

colechristensen wrote: post #34

mrtksn wrote: post #14

Cryptocurrencies are fascinating but the irreversibility is not a feature but a bug. I don't get the appeal for irreversibility. A legitimate trade always occurs between willing partners, why would you be so afraid that the transaction would be cancelled? The only legitimate use that comes to my mind are complex financial instruments where things mostly happens with an assumption that the underlaying assets are very…

The end question is "why bother" with cryptocurrencies if you have a central authority that handles transaction disputes. It makes sense if you have a small group of trusted entities that want to have a ledger between themselves (like inter-bank ledgers for various purposes) but if you have somebody in the middle handling disputes... don't you just have paypal? Then cryptocurrency is just an extra complicated step th…

If only there was some kind of extensible system that would allow for people to enter into contracts with the protections they desire. One might even call these contracts "smart", and could include the ability for a trusted third party (or collection of third parties) to provide a trusted role in approving the transaction. If only such technology existed.

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#109

Post by jaxrtech » Thu, Aug 12, 2021, 11:13 PM UTC

I currently work in the crypto space (views are my own). For the life of me, I cannot understand why we do not have a foundation built on something like TLA+ or the Z3 theorem prover instead of paying another human to try and poke your code for thousands of dollars. Maybe formal methods wouldn't be a silver bullet, but it seems a lot better and less error prone than manual review. Or maybe adopt existing knowledge from safety critical environments (e.g. programming brakes on a locomotive).

I always feel like we're making mistakes that tangential areas of software engineering must have already solved. I guess devs tend to also not like math or writing proofs either, which is ironic given this is "crypto" lol.

Re: The bug which lost more than $600M in various cryptocurrencies a few hours ago

#110

Post by xur17 » Thu, Aug 12, 2021, 11:15 PM UTC

bko wrote: post #70

crypt1d wrote: post #27

Earlier quoted context omitted.

A lot of these contracts, and especially those owned by first-tier cryptocurrency companies, are reviewed by 3rd party auditors. Of course that doesn't completely remove the risk, but certainly at least ensures that no obvious bugs are missed.

As this space evolves, I think there will be insurance and basic best practice safety measures. Also considering that almost all blockchains are open by design, it's no trivial task to liquidate a large sum of stolen tokens. So its not exactly a straight path from writing a script at Starbucks to making hundreds of millions of dollars.

There already are a number of insurance options.