Cryptocurrency security news: $300 million lost to a bug

Twitter/Ethereum ProjectA concept image from the Ethereum Project, the official proprietor of the cryptocurrency

Gold turns to dust in the most recent cryptocurrency blunder, as $300 million worth of Ethereum cryptocurrency was lost due to a mere bug in the system.

A series of bugs in a popular digital wallet service made one developer take control of the system and accidentally lock up all the funds. The cryptocurrency amount went nowhere and was not stolen by anyone; it was merely destroyed or erased, rendering it gone for good. The lost cryptocurrency was in the form of Ether, the one used for Ethereum distributed app platforms, which use graphics processing units (GPUs) for mining.

Parity, the developer which maintained the security of the digital wallets containing Ether was allegedly responsible for the lost funds, as they introduced a new security measure to prevent hackers from stealing $32 million out of a few multi-signature wallets. Parity, unfortunately, introduced another problem along with the new security measure and allowed just one user, named devops199, to become the owner of multiple digital wallets, causing all of them to be locked when Parity tried to undo the mistake. 

Parity then had to delete the code which allowed the said user to be the owner of several wallets. This froze all the wallets, with no way to access them, rendering the Ether they contain useless. As of writing, the developers are trying to resolve the problem.

Unfortunately for users, it seems the only viable solution is a "hard fork,"  which is creating a new network with different rules from the original. For this to happen, though, 51 percent of all their users will have to agree to the procedure in order for the funds to be returned.

This is easier said than done since the Ethereum mining platform would get centralized with the full control of the funds being handed over to the developers. This is something a lot of Ethereum miners do not like since the decentralized nature of the cryptocurrency allows them to make the choices, hence the 51 percent user base affirmation requirement.

The developers may be seeking an alternative solution but have not yet announced anything at the moment.