Image credit: Inleo
The hack on Mt. Gox in 2014 was indeed a black day for the cryptocurrency community, as it happened to be the largest Bitcoin exchange with over 70% of all BTC transactions taking place through them across the globe at the time. This meant that when about 850,000 bitcoins disappeared from their platform, it marked around $450 million loss.
When those creditors lost their coins years back, I bet getting repaid wasn’t in their thoughts at all. As such, while the legal tussle over compensations continued to drag on and on there seemed little hope that creditors would ever recover their money back. But things took a different turn in 2019, when the Japanese high court finally approved the reimbursement plan that could see creditors get back their money.
Around the same time something happened with the Bitcoin network – it did this thing called a “hard fork.” According to my knowledge of this topic this is when blockchain literally splits into two.
And this is where the hard fork comes in. You see, Bitcoin went through a protocol alteration resulting in another coin called Bitcoin Cash during the years of MtGox case. Because of basic crypto principles, anyone who had BTC at the time would also receive an equivalent amount of BCH following the hard fork.
Now MtGox creditors are being repaid not just their original Bitcoin BTC but also Bitcoin Cash BCH proportional to what was taken away from them back in 2014. Therefore for people who lost hundreds and thousands of coins, it means that they’ll be getting more than just BTC as compensation. Some creditors may even get more Crypto than they initially lost.
This is an incredible twist of fate. The largest cryptocurrency hack may eventually end up benefiting those affected without any input from them whatsoever. The unexpected opportunity came when hard fork occurred long after gain. It’s truly amazing how technology continues changing in unpredictable ways.
Consequently, the hack victims will have their BTC recovered and they will also be awarded some BCH. It seems like the creation of the universe considers such people in these cases to be deserving of something good for them. Timing has played to MtGox creditors’ advantage hence a considerably favorable outcome. Additionally, it is an indication that some lessons on the volatile nature of digital currencies can be learnt from this experience.
First off, changes are happening all the time and in quite surprising ways when it comes to technology. That hard fork was an opportunity that nobody would have ever imagined at that time. Besides, change is constant as nothing is cast in stones.
Furthermore, it is a timely reminder about security for any exchange company. Indeed, Mt.Gox made one huge mistake by allowing itself to be hacked but their mistake was clear only many years after. This happened long ago, but knowing how things unfolded makes one wonder what if mtgox had been less vulnerable at inception.
Who knows though? Perhaps that hacking was actually necessary for us to be where we are now. It’s unbelievable but sometimes ends justify means and even if no-one saw it coming this time around.
Anyways, the moral of the story is - don't lose hope if crypto throws you a curveball. You never know what new possibilities might come down the line. And to all these exchanges - security has to be the top priority to avoid something of MtGox nature ever again.