Since the report from CoinMetrics showing that a bad actor exploited a vulnerability in the BTCP fork mine code, we have been hard at work trying to mitigate the damage. In our official response, we suggested that BTCP could hard fork to remove all shielded coins in existence as ~1.7 million of them are illegitimate, while only 20k coins are legitimate. Since then, the community has overwhelmingly supported this action, however, we have not ignored those who could be affected.
First and foremost, we highly recommend that all users with shielded coins deshield them immediately until we proceed with our action plan. We have been monitoring the amount of deshielded coins in circulation and have not seen a dramatic increase which would suggest the bad actor is moving the illegitimate coins. Regardless, we recognize that some people may not see this notice in time and could lose their coins. To help these people, we are going to create a fund of 20k coins and anyone who can make a legitimate claim to have lost shielded coins will be reimbursed through this fund. To ensure full transparency of this process, we would like to be sure this process is managed by a third party volunteer instead of by the BTCP Contribution Team. If you wish to nominate and vote on this matter, please go to this reddit link and nominate/upvote people/groups you believe would be good volunteers for this process. We will leave this vote open for a month and ask the chosen party if they would like the manage the fund and process of distribution to afflicted users.
In good news, the code for a hard fork removing the shielded coins is finished and the hard fork will occur at block height 455500, which is approximately 1 week from now. This code also contains the removal of unmoved coins which will occur at block height 480000 (~March 1) and we estimate approximately 3.5 million coins will remain. You can see the code at our GitHub Repository.
While we suggested in our whitepaper that the unmoved coins could be removed slowly over 2 years, after further exploration, we now realize the potential for a chain split is incredibly high. Therefore, all unmoved coins will be removed simultaneously.
We recommend that all exchanges, pools, wallets, and any other nodes upgrade immediately. If you plan to upgrade and are unable to on time, we recommend that you turn off your wallet until you can upgrade. The code for the hard fork can be found at the Bitcoin Private github repo. Of course, anyone in the community reserves the right to not upgrade and continue running the old chain. Below is how the BTCP Contribution Team plans to proceed moving forward:
- Code released today. Hard fork in ~1 week at block height 455500. This will immediately remove all shielded coins. Furthermore, unmoved coins will be removed at block height 480000, which is approximately March 1, 2019. We estimate that approximately 3.5 million coins will exist on the blockchain afterwards.
- Begin planning the next hard fork, which will A) create fund of 20k coins for those affected by the shielded pool burn, B) change the algorithm, and C) modify the block reward to match with a 21 million supply. Ideally we would like to see this done in Q1 or Q2 of 2019, but we must be careful not to introduce another vulnerability.
Unfortunately, we will have to suspend work on the rebase until we are finished with the above steps. It is an extremely important project, however, ensuring the security of the BTCP network is now our #1 concern. Given the opportunity for a significant vulnerability to be introduced in this process, we will be taking our time going forward to ensure we can locate and fix and critical vulnerabilities before release of step #2, the rebase, and any other major code update from here on out.
The BTCP Contribution Team