$500 Billion Bitcoin Controlled by Few Programmers

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The Wall Street Journal (WSJ) reported on the 16th (local time) that the number of programmers who can get their hands on the programs that support the $500 billion cryptocurrency Bitcoin has been reduced from six to five.

The WSJ pointed out that the problem is that these programmers, called operators, are not well known and those who are paid by donations can decide the fate of Bitcoin.

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These operators have, on at least one occasion, secretly fixed loopholes in their programs that could have destroyed Bitcoin’s value.

Following in the footsteps of Bitcoin’s creator, a mysterious figure known only by the pseudonym Satoshi Nakamoto, operators must ensure that Bitcoin programs work on the latest versions of Windows or MacOS. This is because the trade volume can be maintained.

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The Bitcoin core program requires as careful management and supplementation as any other program. In this regard, Bitcoin expert Jameson Robb said, “(Bitcoin programs) are becoming more and more obsolete. more susceptible to attack. All technology must be managed by humans,” he said.

In the case of a typical software company, program developers are evaluated for their abilities while working according to a detailed organizational structure and job division. In particular, in the case of listed companies, detailed information on financial status, operation and management is disclosed.

In the case of cryptocurrency, the information to be disclosed is not in accordance with the regulations of the authorities and is disclosed through the Byzantine code repository of Microsoft’s own website GitHub, where white papers, bulletin boards, and Bitcoin core programs are stored. Moderators and other program developers discuss code issues and personal issues in a public chat room once a week.

Because it operates in an open-source way, anyone with an account on GitHub can suggest modifications to the Bitcoin Core program. However, only operators have the right to modify the program. It is a structure in which users download the program update, which takes place once every six months, from the GitHub repository to run it.

“Dealing with a lot of people’s money sounds really scary,” wrote one person who watched the coding work that one of the moderators, Andrew Chow, streams live on the Twitch site every Monday at 2:00 p.m., in a chat window last summer.

Chow said, “It was really scary, but it got easier with time. In particular, I learned what not to touch.”

In the past 18 months, four Bitcoin operators have resigned due to burnout or legal burden. As a result, new operators were elected through an instant vote after heated discussions in the chat room.

Bitcoin operates on a blockchain basis. A 450 gigabyte copy of the database is stored on a network of tens of thousands of computers. 99% of these computers use some version of the Bitcoin Core program to record transactions.

Developers say the widespread use of the Bitcoin Core program is weakening the cryptocurrency’s decentralization advantages. The computer on the Bitcoin node is also equipped with other programs, making it vulnerable to security and making it difficult to operate the Bitcoin Core program, which is a big problem.

The Bitcoin network itself has no reward mechanism for its operators. All it does is donate money to the operators from cryptocurrency companies and wealthy investors.

Such an approach carries the risk of conflict of interest. Samuel Dobson, a former operator, said, “There is a problem that invisible control can be achieved with the donation method.”

Backers say their donations to the operators range from $100,000 to $150,000 a year. Alphabet’s median developer remuneration is $225,000, which is significantly less than the plus of various bonuses and stock options.

Cryptocurrency exchange Coinbase Global said in a report filed with the US Securities and Exchange Commission (SEC) that operator issues could affect the speed, security, utility and value of Bitcoin.

A former operator of Dobson stated that Bitcoin Core operators are replaced by other operators based on their reputation.

Meanwhile, as the value of cryptocurrencies plummeted, donations to operators also decreased significantly. The operators are distributed all over the world and meet once or twice a year.

Bitcoin graphical user interface manager Hennadi Stepanow fled war-torn Ukraine to London last year, his backer said. Michael Ford, the operator of the build system, which is the process of interpreting and executing the source code, often uploads pictures of his parents’ farm in Western Australia. Gloria Zhao, a University of California graduate, writes about a program that governs Bitcoin transactions.

The three work in a non-profit office in Shoreditch, London, while being paid by Brink. Brink is evaluating their contribution to Bitcoin.

Chow, a University of Maryland graduate, manages a digital wallet program that stores bitcoin. After graduating from university, he worked for Blockstream.

The last operator, Marco Falke, is in charge of inspecting the program and receives money from OKCoin, a Chinese cryptocurrency exchange, and Paradigm Management, an investment company. He has been touring Europe since leaving New York in 2020, and his Twitter account appears to be based in the Swedish city of Malmö, but he has declined to say where he lives.

Vladimir van der Lahn, who has been working as an operator for the longest time and has been a leader dynamic, has been inactive for two years. He is supposed to live in Amsterdam, and he is paid by the MIT Digital Currency Initiative Neebra.

The process of solving problems in Bitcoin Core is very subtle. Since most nodes must voluntarily upgrade their programs to eliminate vulnerabilities, hackers will have more time to attack if information about vulnerabilities is exposed in advance. Because of this, program modifications are often done covertly.

On September 17, 2018, it was revealed that Bitcoin developer Matt Corrallo identified an ‘inflation bug’ in Bitcoin Core that allowed hackers to trade one Bitcoin multiple times.

Corrallo said the crypto messenger Signal is a “denial-of-service bug” that poses less risk to major Bitcoin miners.

Operators notified users to update Bitcoin Core, which fixed the bug, but it wasn’t until three days after the network node computers were sufficiently updated that the original problem was revealed to be an inflation bug. The inflation bug was a bug that could have wiped out Bitcoin.

Some Bitcoin users argue that these issues should be more transparently disclosed.

In 2011, Nakamoto, the original creator of Bitcoin Core, passed control of the program to a developer named Gavin Andreessen and disappeared. Andreessen handed over operating rights to van der Rann in 2014, and two years later van der Rann removed Andreessen’s access.

Van der Lan announced in 2021 that it would quit all operating activities, including the role of chief operating officer. The reason he couldn’t do it anymore was because he had health problems due to burnout.

In June of last year, there was a heated debate over who to designate as the successor, and Ford proposed to appoint Zhao to lead.

At the time, famous Bitcoin developer Jeremy Rubin suggested that operators need to clarify their respective roles, but Van der Rann objected, and Rubin countered that he was “avoiding the responsibility issue of operators.”

Source: Donga

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