Coinbase Free Ether bug? Another Case For Moving To A Decentralized Exchange

A quick look at how the recent bug on the Coinbase trading platform shows that decentralized exchanges are the way forward...

Coinbase Free Ether bug? Another Case For Moving To A Decentralized Exchange

If the documented cases of hacked exchanges have not been reason enough to stop using badly designed trading platforms then surely this simple bug is...

One of the biggest centralized exchanges & online wallet providers in the cryptocurrency world Coinbase recently revealed they fixed a smart contract bug that let users award themselves an unlimited supply of Ethereum (ETH).

Yes, you read that right, you could have sat there all day and became an ether millionaire because of a glitch.

The bug came from how Coinbase reacted to a faulty wallet involved in a smart contract. Due to the faulty wallet failing the transaction, the smart contract fails and everything should normally be reversed. However, on Coinbase the transactions were never reversed meaning that you could just keep adding ether to your balance.

The report was made public on March 21st, however, the exploit was discovered by a Dutch security company Vicompany back in January 26th. Apparently, it took Coinbase over a month to fix the error.

We are talking about an error that could have drained billions from their exchange and quite possibly have had dire consequences on their whole business operation's financial future. A critical bug just sitting there for a whole month. Let that sink in for a moment...

Another clear-cut case for why decentralized exchanges are the way forward

Remember this is an exchange, where users are giving their trust to a single company to keep their funds & wallets safe. In return, you really would have thought a company as large as Coinbase would have had the respect & capacity to fix a glitch quickly!

Hacks and loopholes on exchanges are well documented, and it surely will not be the last. However, if you are in control of your private key then at least you do not have to worry about your wallet being drained by a hacker or a bug. It is stories like these that spurred us to start the Saturn protocol project. If an exchange is being governed by the Saturn protocol, then it becomes the users who decide what the development team should be focusing on.

And most importantly of all, a decentralized exchange, implements trading in a way that no business or single entity will ever need to control a trader's private wallet key other than the trader himself.

Remember the best thing you can do, to help our vision of a brighter cryptocurrency grow, is to join our community & show your support!