Bitcoin Private (BTCP) Accused of Pre-Mine, Discovers Coin Exploit

[Ozark]

A bug soon after the BTCP hard fork caused a bad actor close to the developer team to exploit the protocol and create two million coins now kept in shielded addresses.

Bitcoin Private (BTCP) keeps creating controversy after an investigation into an extra amount of pre-mined coins led to the discovery of a previously veiled bug. The Bitcoin Private team is now taking crisis measures to repair the ledger, by planning a hard fork to affect unmoved coins in shielded addresses.

“Unbeknownst to Bitcoin Private, approximately two (2) million BTCP coins that were never intended to exist on the blockchain chain were created and moved to a shielded address. According to CoinMetrics, as much as 300,000 illegitimate BTCP were deshielded, though it is unclear at this time if these coins were sent to an exchange or used/stored elsewhere,” explained the Bitcoin Private team.

At the moment, BTCP has a supply of 20,524,490 coins based on CoinMarketCap data, with a total of 21 million coins to match Bitcoin. To compare, until now, there are 17,444,200 BTC mined. In theory, BTCP is a hard fork based on Bitcoin, although awarding extra funds to ZClassic (ZCL) owners. However, the recent Coinmetrics report actually uncovered 22.6 million existing coins.

To solve the problem of the exploit, which was only possible for a short period during the fork mine, the team had two options - to hard fork and destroy all coins in shielded addresses, or destroy all unmoved coins. This would decrease the BTCP supply, while affecting a handful of users. Shielded addresses were the chief privacy feature for BTCP, but are now raising issues of centralization and immutability.

In effect, BTCP has shown that the ledger can be altered, and coins can be centrally revoked, with a pre-agreed hard fork where the decision is mostly up to the team. Paradoxically, the privacy coin would end up demanding users unveil their coins, unless they would rather lose them.

The BTCP Telegram group has suggested that some of the coins mined in the exploit could have been sold, explaining why BTCP market prices never picked up, and always went lower. In the last few days, BTCP sank even lower, down from the $2.40 level to around $1.80. BTCP reached $76.82 after the launch of trading in March 2018, but went down quickly, at one point repeating a peak around $50 in May, before seeing the bear market take its toll.

SOURCE