naruto on Nostr: Liquid's inflation bug was not a hidden inflation bug. Hidden inflation means you ...

Liquid's inflation bug was not a hidden inflation bug. Hidden inflation means you can't tell if inflation occurred in a transaction or not. We can tell with certainty which transactions caused inflation in Liquid. Therefore, it wasn't a hidden inflation bug.

Also, Liquid's inflation bug was not caused by privacy. It was a result of bad coding, similar to Bitcoin's overflow inflation bug and Bitcoin's other patched inflation bug.

Monero has had a similar bug before too. None that compromised Monero's supply integrity, and it was patched before exploited.

This Liquid bug is theoretically fixable with supply integrity kept intact by erasing the problematic exploit transactions from its sidechain history. That's what Bitcoin did when Bitcoin rolled back to erase the exploited overflow inflation bug.

In practice that will be challenging for Liquid because it's a sidechain that has peg-ins and peg-outs to Bitcoin.

HIDDEN INFLATION is not patchable with supply integrity kept intact. This was not a hidden inflation bug. There is no way of knowing for sure that Zcash's hidden inflation bug was exploited or not. That is not the case here. We can see the exploit transactions on Liquid because this was NOT a hidden inflation bug.