On Aug. 15 2010, an unknown hacker nearly destroyed Bitcoin. The hacker generated 184.467 billion Bitcoin out of thin air in what has become known as the Value Overflow Incident.
Satoshi Nakamoto quickly hard forked the blockchain to remove the 184.467 billion Bitcoins, which is the only thing that saved Bitcoin from dying an early death that day.
Essentially, the code for checking Bitcoin transactions did not work if outputs were so large that they overflowed when summed, and a hacker figured this out and took advantage of it. There is supposed to be a fixed maximum supply of 21 million Bitcoin, but the hacker, in a single transaction, created 8,784 times more Bitcoins than ever should exist.
If this hack hadn’t been rectified, Bitcoin would likely have died then and there, which would mean the entire crypto space as we know it would not exist. The price of Bitcoin would have plummeted to zero instantly once users realized that it could be minted at will. Bitcoin would have lost all of its trust and reputation.
Satoshi Nakamoto, Bitcoin’s infamous and anonymous creator, created a code fix within 3 hours of the incident first being reported on Bitcointalk. Early Bitcoin developer Gavin Andresen worked alongside Satoshi to bring about a quick resolution.
Within 5 hours of the incident, Satoshi released version 0.3.1 of Bitcoin, which prevented future printing of Bitcoins via this exploit and rewound the blockchain to erase the hacked 184.467 billion Bitcoins.
This was a hard fork, so two different versions of Bitcoin existed in the immediate hours after version 0.3.1 was released. Satoshi monitored the competing blockchains closely and urged miners not to mine the bad chain because doing so would make it take longer for the good chain to become the dominant chain.
Just 19 hours after the incident began, the good chain became the dominant chain according to Satoshi.The bad chain still existed and disrupted some users for at least the next day, but ultimately, the good chain generated from version 0.3.1 became the Bitcoin blockchain everyone uses today.