Inflation Bug

An inflation bug is the most severe class of Bitcoin software vulnerability: a flaw that would let an attacker create more BTC than the protocol's 21-million-coin cap allows, by tricking validators into accepting invalid transactions or invalid coinbase outputs.

The canonical example is CVE-2018-17144, disclosed September 18, 2018.

What the bug was:

• A specific class of double-spend - submitting two transactions in the same block that both spent the same UTXO - had been a known impossibility. Bitcoin Core checked for this in the block-validation path.
• An optimization in Bitcoin Core 0.14.0 (2017) accidentally removed that specific check for transactions that didn't pass other earlier checks. The relevant code path could be triggered by a carefully-constructed block.
• An attacker who produced such a block could double-spend an output. Iterated, this is inflation.

How it got found and fixed:

• Awemany (a developer working on Bitcoin Cash software) discovered the bug while reviewing inherited Bitcoin Core code.
• They disclosed it privately to Bitcoin Core maintainers.
• Bitcoin Core 0.16.3 shipped the fix within 24 hours of disclosure, with patched versions for older supported branches.
• Mining pools and exchanges upgraded within hours.
• No one is known to have exploited the bug in the wild before the fix.

Why this matters:

• Bitcoin's monetary integrity nearly broke. If exploited and not detected, the 21M cap would have been silently violated, which would have been catastrophic for trust in Bitcoin's monetary properties.
• The patch worked because the social process works. Private disclosure, fast review, fast deployment by infrastructure operators. The same coordination would be needed for any future critical bug.
• It's a reminder that "the code is the constitution" requires the code to actually be right. Bitcoin's monetary commitments depend on Bitcoin Core (and its compatible implementations) actually enforcing the rules. Subtle bugs in optimization paths can undermine the commitments.

CVE-2018-17144 remains the most cited example when developers argue for conservative changes to the validation code path, more test coverage on consensus-critical functions, and minimum review periods on optimizations.

See the Inflation Bug Postmortem rabbit hole for the full timeline - the duplicate-input check that wasn't, how the bug was found, the private-disclosure process, and how the patch shipped without panicking the market.