Bitcoin is still a work in progress, and will be for the foreseeable future. That means that Bitcoin traders and exchanges need to solve problems as they come up. That’s not a fun way to troubleshoot in theory and a recent glitch on an exchange highlights just how that looks in practice — with a Japanese company now dealing with somebody who “bought” $20 trillion in Bitcoin for zero dollars.
The problem was simple, as Gizmodo reports. A minor pricing glitch meant that, for a few minutes, Japanese Bitcoin exchange Zaif priced the cryptocurrency at $0. Needless to say, some people tried to take advantage, but one guy really went all in:
…one customer apparently “purchased” 2,200 trillion yen worth of bitcoin and proceeded to try to cash it out. That’s about $20 trillion. Considering the fact that Bitcoin has a market cap of just over $183 billion, that sell order really must have confused some traders for a bit.
Needless to say, the trade is invalid, but it does underscore an increasing problem with Bitcoin. A price of $0 is obviously an error, but what if an exchange puts up what seems to be a legit price, but isn’t? Does the exchange still have to honor that price? Doe investors keep their coins? is there recourse for parties that feel slighted?
These are questions without an easy answer for Bitcoin or other cryptocurrencies, and they’re also key questions in Japan, a hotbed of Bitcoin trading activity that’s emerged as the biggest market for Bitcoin in the wake of China’s crackdown. The entire goal, remember, is to have a completely decentralized currency, where everyone keeps everyone else honest. But in a case of honoring accidental false prices — when both parties are trying to act ethically — whose honesty takes precedent?
(via Gizmodo)