According To CoinDash, The Ethereum Hacker Returned 20,000 Stolen Ether
A report on why the Ethereum hacker returned the Ether they hacked. Here is an interesting piece of news.
What Happened To The Ethereum?
In case you have said there’s no honor among thieves, here is it that you haven’t met a cryptocurrency hacker. This is because CoinDash said an Ethereum hacker who had pilfered 43,000 ether tokens during its ICO has quietly returned 20,000 tokes to its wallet and using the ETH price that is around $ 871 per token, which is roughly $ 17.4 million. Hereafter CoinDash has made the announcement writing that 20,000 ETH was sent back from the hacker’s address to one of the CoinDash’s ETH accounts. Thereafter the company adds that it was important to note the CoinDash product launch is still scheduled as the incident will not jeopardize the company’s plan and commitment to the community.
Here is what Alon Muroch the CEO of CoinDash underscored that the incident has no impact on its business operations which is similar to the hack itself while the hacker’s actions will not prevent them from the realization of their vision. It is then that amazingly this is the second time the hacker has returned funds to CoinDash where the cyber thief gave back about $ 3 million worth of ETH earlier just three months after his brazen heist.
The Second Time Hacker Returned Funds
It has to be noted that the hack occurred just minutes after CoinDash launched its initial coin offering as it was designed to raise Ethereum funds for its social trading platform. Here the hacker whose identity remains unknown hijacked the site and quickly stole 43,000 ether tokens as reported by CoinDesk. Here the thief still has13, 400 ETH tokens worth $ 11.6 million using today’s price which is about one-quarter of the amount he originally snatched. In this context it’s unclear who the hacker is or why they returned the money as in its statement Israel based CoinDash told customers it had alerted the Counter Cyber Terrorist Unit in Israel and said it will continue to be tracked and monitored for any suspicious activity according to the company.
Thereafter it was not surprising that the bizarre turn of events has fuelled conspiracy theories and crackpot rumors while some speculating the hack was a PR stunt to get publicity for CoinDash’s new product launch set for later. Others claim the heist was an inside job as no matter what the truth is, the odd incident spotlights the Wild, Wild West the secretive and unregulated cryptocurrency world of today.
What Are The Problems With Coin Selection?
Here this is why Bitcoin’s coin selection relates to how the cryptocurrency’s algorithm chooses coins from its unspent transaction output for future transactions. The UTXO comes as the change left after a spending transaction as the change is typically stored in a user’s wallet consisting of multiple pieces of data each with varying amounts of Bitcoin. Thereafter as an example, a balance of 1 Bitcoin in a wallet might consist of 0.3 bitcoins in one piece of data, 0.2 Bitcoin in another, etc. Thereby together, these pieces of data make up a single Bitcoin in the user's wallet.
Eventually, during a transaction to spend that single Bitcoin the algorithm chooses chunks of data and creates other UTXOs in the process were for an example, it might choose to spend just 0.2 Bitcoin from the piece of data that contains 0.3 Bitcoin and add it to another 0.2 Bitcoin from another piece of data, etc. Thereby as can be imagined, the algorithm’s process is inefficient and time-consuming. There is another important drawback of the process that is it creates dust or pieces of data whose value is smaller than transaction fees, making them essentially useless for transactions.
Later on last year, in a post on Medium, the prominent Bitcoin developer and entrepreneur Jimmy Song attempted to calculate the number of such coins as he wrote if Bitcoin UTXO s were like items in a vault, they would see about two-thirds of the vault filled with trinkets and the rest filled with much higher value items. Adding to it he wrote that it was economically irrational to move those coins as continuing with the analogy a transaction fee would be like the vault owner charging you to withdraw trinkets that belong to you.
Finally To Conclude On Changing Coin Selection Process
There are developers of the BnB algorithm who say that the new code attempts to find an exact match for the transaction amount instead of arbitrarily choosing amounts from each piece of data. However according to Andrew Chow, a Bitcoin core developer, this helps shrink the UTXO setting a little more as the algorithm also typically finds exact matches for smaller transactions, as the practice help reduce dust. It then reduces transaction fees for users and frees up additional space on the network by reducing the number of UTXOs on it. This is where the Coindesk article states that BnB was able to reduce Bitcoin change in approximate 40 percent of transactions that would otherwise have produced bigger numbers of UTXOs.