Overstock Mix-Up Leaves Company Exposed To BTC/BCH Confusion

E-commerce giant Overstock has been reported to have experienced a serious technical glitch enabling users to buy goods priced in bitcoin (BTC) for equal amounts of bitcoin cash (BCH), in a bug that could have resulted in significant liabilities for the company.

According to media reports, the bug, which ostensibly persisted for as long as three weeks before being rectified, enabled users to pay a price in BTC in the significantly cheaper cryptocurrency of BCH, with some test purchases allowing users to buy $78 products for as little as $12.

Bancsec, the banking security firm based in North Carolina, was among the first to identify the glitch, reporting its findings to cryptocurrency journalist Brian Krebs.

Verifying its claims, Krebs was able to successfully purchase the $78 products in bitcoin cash, rather than in bitcoin as priced on the Overstock platform.

“Logging into Coinbase, I took the bitcoin address and pasted that into the ‘pay to:’ field, and then told Coinbase to send 0.00475574 in bitcoin cash instead of bitcoin.”

The bug appears to have occurred between leading wallet service Coinbase and the Overstock platform, with both blaming the other for the embarrassing and potentially costly mix-up.

Seeking comment from Overstock, Krebs was informed that the problem existed with Coinbase.

“Reached for comment, Overstock.com said the company changed no code in its site and that a fix implemented by Coinbase resolved the issue.”

However, representatives for Coinbase have maintained that the issue arose due to “the merchant partner improperly using the return values in our merchant integration API,” a reason offered by Coinbase for the fact the problem was isolated to just one merchant.

At today’s prices, one bitcoin is valued at around $14,500. By contrast, one bitcoin cash is valued at around $2,400. In exploiting the mix-up, customers were able to spend bitcoin cash as if it were the much more valuable bitcoin.

The matter has caused significant embarrassment to Overstock, widely regarded as one of the pioneers of bitcoin acceptance and the wider development of blockchain technologies.

According to Krebs, his investigations showed this to be an isolated problem, specific to the Overstock checkout process with Coinbase.