Timelocked contracts have been a prominent development in the cryptocurrency industry. Albeit it has tremendous potential, a newly discovered bug in timelocked Bitcoin contracts can cause a lot of problems if left unchecked.
Several Bitcoin transactions on the network are seemingly locked in place.
Timelocked Contracts With Bitcoin are a Time Bomb
More specifically, they cannot be executed or funds cannot be moved until a certain condition has been fulfilled.
Apparently, over a million of such transactions have occurred on the Bitcoin network between September last year and this March.
Albeit they all seemed to follow the default “setup” for timelocked contracts, that is not necessarily the case.
Of these transactions, nearly 10% was not properly enforced by Bitcoin’s network protocol.
As such, a colluding entity could easily steal these funds if they so desired.
While an attack of this magnitude does not exist as of yet, one never knows what the future may hold.
Some people are convinced that Bitcoin miners don’t need any more “power” as of right now.
However, if timelocked contracts are utilized without being enforced correctly, the balance of power can shift very quickly.
What will be done to address this uneasy situation, remains to be determined.
Companies relying on timelocked contracts for payments may want to keep on top of this situation for the foreseeable future.
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