Zcash unveils an inflation bug that could have created infinite tokens

The confidentiality cryptocurrency, Zcash, revealed an inflation bug discovered 11 months ago, which affected its own currency and several other private coins. Although the vulnerability of Zcash has been corrected, it took 8 months after the discovery and some parts remain exposed.

Zero Knowledge

Last March, a Zcash engineer noticed an error in a cryptography document describing some "unconscious" evidence. Zcash (ZEC) 00 and several other pieces, use this evidence to activate many of their privacy features. This error meant that an attacker could hit an infinite amount of ZEC (or any other affected part) without being detected.

Zcash kept the discovery silent; only the small team working on the fix was aware of the problem. Team members used encrypted communications to reduce the risk of insider leaks or hackers detecting vulnerability.

In October, eight months after its discovery, the bug was surreptitiously corrected during a planned network upgrade. Although Zcash said he did not believe the bug had been exploited, they can not be sure.

Infinite Parts

While all this was happening, the other projects affected were kept in the dark. But after setting up their own solution, the Zcash team informed the security personnel of Komodo and Horizon. These two companies accounted for the majority of the market capitalization of the other affected coins, rising to $ 72 million and $ 22 million, respectively.

Both projects later implemented patches, but other smaller privacy patches were still vulnerable at the time of their announcement. This included Bitcoin Private, with a market capitalization of $ 18 million, which had a controversial history with Zcash.

Research has uncovered evidence of a secret pre-mine of Bitcoin Private, and the resulting controversy is blamed for tarnishing Zcash. CEO, Bryce Wilcox, explained:

We did not want to disclose to more parties that the majority of the market capitalization exposed had already been protected.

Subtle vulnerabilities

The disclosure indicates that "the vulnerability is so subtle that it has escaped years of badysis by cryptography experts centered on zero-knowledge demonstration systems."

A commentator on Twitter highlighted this "crypto at the cutting edge of technology is risky" and that, even if Bitcoin has less privacy features, it creates a safer system. He also suggested that the transparency of the BTC meant that a similar bug would be detected more quickly.

Is the leaked bug a threat to ZEC and its market value? Share your thoughts below!

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