Will 2 Million Secretly Mined Bitcoin Private Coins Kill the Project?

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Bitcoin Private is currently embroiled in a huge scandal, after it was discovered that 2 million tokens were created and pre-mined in secret. These additional tokens were not mentioned in the project’s whitepaper and are worth a whopping $3.9 million at the time of press. The Bitcoin Private project is a legitimate project born from a group of developers who wanted to make a more privacy-focused version of Bitcoin – almost a Bitcoin version of Monero. This scandal has the potential to kill the project in its tracks, but is the fallout from the scandal going to be enough?

A Fresh Bitcoin Fork

Bitcoin Private is one of hundreds of Bitcoin forks that has emerged over the years. However, the developers of the project tweaked the code and mixed it with bits from Zclassic – a fork of Zcash – in a bid to make it more privacy-focused. The Bitcoin Private fork occurred in February 2018 and was originally seen as a genuine fork born out of disagreement within the developer community. This new scandal is casting doubts over this, as rumors swirl that it could simply be another scam looking to capitalize on Bitcoin’s name and the demand for privacy-focused cryptos.

Unknown Developer Taking Advantage of a Bug

Unfortunately, the Bitcoin Private team knew about this bug and in a statement distanced itself from the illegal creation of these new tokens. The extra 2 million Bitcoin Private tokens were created during the mining fork, and the team said that anyone with enough blockchain development knowledge could have exploited this bug. However, it’s only possible for the bug to occur once, meaning this can never happen again.

A Solution to the Problem

Currently, all of the mined Bitcoin Private coins reside in shielded addresses – along with around 1.8 million secretly mined Bitcoin Private coins. The developers of the project are proposing a quick and easy solution to kill off these new coins – a hard fork to remove all shielded coins from existence. If it does go ahead and do this, all legitimate coins kept in shielded addresses will be removed from existence, but so too will the illegitimate ones – it would also fix the supply cap. This isn’t a desirable solution by any means, but it could be a bluff designed to make the developer move the illegitimate coins out of a shielded address so that they can be traced and eliminated from the ecosystem.
The true fate of Bitcoin Private is yet to be seen, but unless these illicit coins are removed from circulation, the project is as good as dead. There is a growing demand for privacy-focused cryptos and the US government is starting to panic. It would be a huge shame for the project to have to call it quits due to one developer getting greedy, but unfortunately hackers don’t seem to care.