Coinbase is quite acclaimed for being one of the best cryptocurrency exchanges but just recently the platform revealed a major flaw. The platform recently encountered an issue in the Ethereum balance.
Now, the troubling aspect is that this balance issue allowed the users to manipulate their balances with ease. The users were able to manipulate the system using the smart contract. This facilitated them to add as much Ethereum to their account as they want.
The alarming part is that this issue was revealed to the public in March 2018 by Coinbase although it existed since December 2017. However, Coinbase readily accepted this issue and were not defensive. In fact, they rewarded the Dutch researchers who identified the issue.
The research group Vicompany received a reward of $10,000 from Coinbase. Apparently, it seems that Coinbase rewarded the research group because they feel that the identification of the issue has saved them from a lot of unpredicted trouble in the future.
This glitch could have caused massive losses to the exchange. As per the researchers if one particular transaction fails, then in this case all the other transactions should fail also. However, this did not happen on Coinbase interface.
The specific transactions failed to revert on the interface. This is why the users could add unlimited Ethereum to their account. However, Coinbase is now focused on resolving these issues.
As soon as the issue was identified the exchange ensured that it is fixed on a priority basis. The exchange changed the logic for handling the contract to resolve this issue.
The disturbing part is that Coinbase is not the only exchange that has been experiencing these glitches. Just way back in February a Japanese Exchange by the name of Zaif faced a strange issue that allowed the users to buy BTC for $0.
All these revelations are red flags for the digital currency exchanges and they need to take immediate action. They need to strongly monitor their working mechanism and improve their quality control before these issue cause serious losses to the exchange or the users.
The exchanges need to go by the rule that a stitch in time saves nine. A little effort can save the reputation of the exchange because no user wants to invest in a digital currency exchange that has a vulnerable mechanism.
This way people will not get the opportunity to misuse or manipulate the system by any means at all.