Deutsch15 years after a successful hack of what was then the largest crypto exchange Mt.Gox, its former head is now speaking out. Mark Karpeles wants to reverse billions in damages to the Bitcoin ecosystem. For this, he plans a hard fork. Why this proposal faces enormous resistance among Bitcoiners.
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Bitcoin: How a Hard Fork Aims to Avert Billions in Damages
An earlier security issue that caused billions in damages to Bitcoin is to be resolved by a hard fork – an idea recently proposed by former Mt.Gox head Mark Karpeles. The incident is almost 15 years old. Many users of what was then the largest crypto exchange Mt.Gox are affected. To this day, the criminal case has not been fully settled.
A look back: Before Mt.Gox had to close its doors in 2014 due to insolvency, the company was a success story. At the time, the trading platform was by far the most popular service of its kind. 70 percent of global Bitcoin trading took place on Mt.Gox.
For years, attackers had been emptying the crypto exchange’s wallets undetected. One of these incidents in 2011 led to a transaction that stole 79,956 BTC from the marketplace’s wallets. This money has remained untouched ever since. Precisely for this reason, Karpeles wants to restore the assets in an unusual way.
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“In June 2011, a hack of the MtGox systems resulted in approximately 79,956 BTC being transferred to address 1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF. The private key for this address is controlled by the attacker, not MtGox or its creditors. These coins have not moved for over 15 years. They are among the most well-known and publicly tracked UTXOs in Bitcoin’s history,” Karpeles wrote last Thursday.
In his Github post, the developer therefore makes the concrete demand to transfer the money to its rightful owners through a hard fork.
“This proposal adds a consensus rule that allows the UTXOs tied to address 1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF to be spent using a signature from the MtGox recovery address 1zUrwsmiJxs19c8SJ8FyGZRXD1zUW77Wj, so that the funds can be repaid to MtGox creditors as part of the existing, court-supervised recovery process.”
Why a crime-fighting fork is so unpopular among Bitcoiners
Karpeles’ demand relies on a controversial concept. The blockchain can be retroactively altered by a majority decision, as it is based on the democratic principle. However, such measures are extremely unpopular among Bitcoiners and in the entire crypto scene.
Changing the blockchain through a fork contradicts the concepts of neutrality and immutability. Certain transactions would be reversed because they are undesirable to the majority of users.
In 2016, there was such a hard fork for Ethereum, which led to the splitting of the network into Ethereum and Ethereum Classic. To this day, the measure is considered questionable, even though it allowed for the reversal of the unauthorized removal of large amounts of ETH.
Countless posts on X show: Bitcoiners view Karpeles’ proposal with critical eyes. The almost 80,000 BTC are currently worth 5.2 billion US dollars. From a financial perspective, the desired fork would therefore be a boon for those affected.
Karpeles’ proposal was closed after just one day. Leading Bitcoin developers had marked it as “spam.” The fork will therefore most likely not be implemented.
The programmer urges readers on X to leave serious criticism of the proposal. Karpeles himself considers the measure positive, as it could have a signaling effect that prevents similar attacks in the future.
Bitcoin Core developer Luke Dashjr has already declared the proposal’s success impossible.
“That will obviously never happen,” he replied to Karpeles’ request for comments.
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Dashjr criticizes the technical implementation more than the fundamental concept. It would be “more sensible” to delete the “old UTXOs” and “mint new ones.” This way, the integrity of the entire blockchain would still be guaranteed.
