Question

Subject - System Test & Verification

Can you think of an example of a software error that turned out to be VERY COSTLY?? There have been some real whoppers!!! Look for a sample of such a software problem online, and then summarize the case study you found here for the class in a couple of paragraphs. Do you think the error was caused by inadequate testing, or did someone misunderstand the specifications?

Answer 1

The Biggest example on System Test and Verification:

The History of the Mt Gox Hack: Bitcoin’s Biggest Heist

At the beginning of 2014, Mt Gox, a bitcoin exchange based in Japan, was the largest bitcoin exchange in the world, handling over 70% of all bitcoin transactions worldwide. By the end of February of that year, it was bankrupt.The victim of a massive hack, Mt. Gox lost about 740,000 bitcoins (6% of all bitcoin in existence at the time), valued at the equivalent of €460 million at the time and over $3 billion at October 2017 prices. An additional $27 million was missing from the company’s bank accounts. Although 200,000 bitcoins were eventually recovered, the remaining 650,000 have never been recovered.

In spite of the June 2011 hack, by 2013 Mt. Gox  had quickly expanded to become the largest bitcoin exchange in the world by 2013, behind the scenes it was struggling. Since its collapse, a number of Mt. Gox employees have spoken about how Mt. Gox was operating, with a picture being painted of a disorganized and discordant organization, with poor security procedures, serious issues relating to the source code of the website, system verification & authentications and a number of serious issues arising in relation to the operation of the business.Prior to September 2011, the Mt. Gox private key was unencrypted and it would appear that it was stolen via a copied wallet.dat file, either by hacking or perhaps through an insider.

In May 2013, a former business partner of Mt. Gox called Coinlab sued the company for $75 million, claiming breach of contract.In addition, the US Department of Homeland Security was investigating claims that a subsidiary of Mt. Gox operating in the US was not licensed and was therefore operating as an unregistered money transmitter. As a result of this investigation, more than $5 million was seized by the US government from the company’s bank accounts.

In my opinion, the specifications during creation of Mt Gox were not clear as the system itself was not capable of holding the type of data securely and hence got hacked.It might have not been upgraded to handle such amount of data or may be it would not have gone through appropriate verification and as a result, the US Department of Homeland Security investigated about a subsidiary of Mt. Gox operating in the US being not licensed.

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