Two million BTCP coins created by a scammer could mean the end of Bitcoin Private. The development team acknowledges the existence of the fraudulent coins, that were created thanks a hole in the network’s code. They are now planning to hard fork their blockchain and remove shielded addresses and all the hidden coins, including the legitimate ones. There’s a big chance people will lose coins because of this decision, and there’s also a change people will drop support after this fiasco.
The two million scam coins were created during the early days of the Bitcoin Private blockchain, when they forked their network from the regular Bitcoin network. It’s believed that someone close to the development team, or perhaps even an insider, noticed the bug and decided not to take action.
Bitcoin Private doesn’t believe a developer, who goes by the Github nickname of airk42, has made the mistake on purpose. They think a third party discovered the bug and abused it.
Either way, Bitcoin Private has requested exchanges to close deposits and withdrawals on BTCP trading pairs. The coin is available on HitBTC, Crex24, TradeOgre and the Turkish exchange Sistemkoin.
The whisteblower on this story was CoinMetrics. The believe 1.7 to 1.8 million illegitimate coins now exist in shielded addresses, which guarantee total privacy. Reportedly 20 thousand legitimate BTCP coins (currently valued over 34 thousand dollars) is also shielded. Around 300 thousand of the illegitimate coins has already been traded on several exchanges. Bitcoin Private is planning to remove all shielded coins for its blockchain, annihilating the illegally created coins that are still hidden.
The outcome of this hard fork is crucial for the future of Bitcoin Private. Ideally it means the world continues as if nothing happened and BTCP gets its renewed blockchain. In a less ideal world two coins will exist, while in a third option everybody will leave Bitcoin Private for death.
Also published on Medium.