Bitcoin Miners Reportedly Lose $50k Following a Manual Glitch

By July 11, 2015Bitcoin Business
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bitcoin mining $50k
A recent manual glitch on Bitcoin mining network costed miners about $50,000 worth in income, reported bitcoin.org.

The trouble surfaced during a consensual upgrade across all the leading Bitcoin software clients. As recalled by the aforementioned Bitcoin channel, the new Bitcoin update was intended to enforce BIP-66 to address the prevailingly surging mining hash rate. And as part of the rules, once 95% of the miners upgrade their clients to the next version, the blocks generated by the older version get invalidated.

Bitcoin Orange Logo LG WD
Bitcoin Orange Logo LG WD

“Early morning on 4 July 2015, the 950/1000 (95%) threshold was reached,” bitcoin.org reported. “Shortly thereafter, a small miner (part of the non-upgraded 5%) mined an invalid block — as was an expected occurrence. Unfortunately, it turned out that roughly half the network hash rate was mining without fully validating blocks (called SPV mining), and built new blocks on top of that invalid block.”

Bitcoin transactions must be confirmed by a consensus of the entire network. In this case, the older clients were treating the non-upgraded 5% miners as the entire network, and thereby ended up confirming transactions that weren’t exactly valid. Due to this manual glitch, mining operators lost about $50,000. Excerpt:

“All software that assumes blocks are valid (because invalid blocks cost miners money) is at risk of showing transactions as confirmed when they really aren’t. This particularly affects lightweight (SPV) wallets and software such as old versions of Bitcoin Core which have been downgraded to SPV-level security by the new BIP66 consensus rules.”

New Update for Bitcoin Miners

A new update on bitcoin.org has meanwhile advised all the mining operators to upgrade their software clients to Bitcoin Core 0.9.5 or more. Those dependent on the web wallets should further ensure that the third party applications are running on the latest software fork.

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