A typo sent $36 million of crypto into the Ether. This surprising issue has alarmed many around the crypto community. While the immutable nature of the blockchain is one of the most appealing features of this distributed ledger technology, once data has been processed or a transaction has occurred, neither can be undone. One of the most significant drawbacks of using blockchain technology?
It can never be changed. If human error leads anything to be sold at the incorrect price or funds to be delivered to the incorrect location, it may be challenging or impossible to undo the transaction. In this awful situation are the developers of the Juno cryptocurrency. A community vote mandated the confiscation of approximately 3 million Juno tokens, valued at approximately $36 million, from an investor believed to have acquired the tokens through fraudulent means.
This alone was a major crypto news story. The funds were going to be transferred to a hardware wallet that was going to be controlled by people who owned Juno tokens. These people would then be able to vote on how the funds were going to be used. A developer accidentally copied and pasted the erroneous wallet address, resulting in the transfer of $36 million in cryptocurrency to an inaccessible account. Here is how a typo sent $36 million in crypto into Ether and raised alarms in the crypto community.
The Complex Blockchain Transaction Process
In an interview with Coindesk, Andrea Di Michele, a founding member of the Juno development team, said that he had provided the developer responsible for the transfer with the right wallet address as well as a hash number. Hashes are the glue that holds the blockchain together, and at first glance, the digits that represent hashes can appear to be quite similar to wallet addresses. The person responsible for the transfer was a programmer who made a copy-and-paste error, and instead of the wallet address, they pasted the hash number.
According to Di Michele, the fact that none of the network validators saw the problem was an even more excruciating experience than the human blunder that occurred. In order for transactions encoded in “blocks” to be uploaded to a blockchain, “validators” must validate each transaction. Trying to explain how a typo sent $36 million in crypto into Ether, Di Michele noted that there were around 125 validators for this transaction, but not a single one was examined. He stated that this should serve as a wake-up call for validators.
The Juno blockchain is an attempt to compete with Ethereum by developing a system that is both more scalable and more efficient. Proof-of-Stake is a more efficient consensus process than Proof-of-Work, which is utilized by Bitcoin and Ethereum. PoS systems validate transactions by having token holders vote to accept them, but PoW chains rely on the solution of computationally tough cryptographic issues. This is why PoW systems crunch so much more power than PoS systems: the solution to these problems requires a lot of computing power.
The Downside Of Decentralization
This issue where a typo sent $36 million in crypto into Ether highlights one significant downside of decentralization. The infrastructure of blockchain was primarily developed with the intention of fostering greater decentralization. For instance, it does this by enabling a network of individuals located all over the world to process payments in place of centralized organizations such as banks. The fact that no single entity can quickly correct human mistakes like these is one of the drawbacks of decentralization. In December, someone sold their Bored Ape Yacht Club NFT for 0.75 Ether instead of 75 Ether, resulting in a loss of around $3,000 rather than $300,000. These “fat finger” blunders and wrongdoings are commonplace, especially among crypto exchanges.
Developers of blockchains have in the past identified techniques to reverse transactions, but the solutions aren’t always easy to implement. After a hacker took advantage of a smart contract in 2016 and inadvertently stole Ether worth around $50 million, Ethereum developers were forced to “hard fork” their blockchain in order to recover the stolen funds. This means that they essentially built a duplicate of the original blockchain, keeping it identical in every aspect but for the fact that the stolen funds were transferred to a recovery address. It was a tense situation as it raised a debate around Ethereum vs Ethereum Classic.
Some members of the community believed it violated cryptocurrency principles and continued to use Ethereum Classic’s original blockchain. Because Juno is a Proof-of-Stake chain, it is possible that this key issue will be simpler for the developers of Juno to resolve. According to Di Michele, Juno operates based on a governance model, in which token holders have the ability to vote to change blockchain transactions. As a result, changing direction needs a vote by a majority of token holders and then an upgrade to the software.
Talking about the solutions for this issue where a typo sent $36 million of crypto into the Ether, Di Michele stated that the funds will be sent to the correct address in one week or something like that; although the situation is unfortunate, it can be easily resolved. According to what he claimed, the funds will be retrieved with an additional upgrade that will change the chain state. PoS chains are not like Bitcoin since they are governed by governance, and if governance orders it, state changes can occur.