LFN #263 - A Month of Transactions Erased: What Happened With Zano and What I Learned

We've been big supporters of Zano, thye have been a sponsor of this show and of our events , and I've personally onboarded scores of people into it. So this one isn't easy for me, and I took a few days before saying anything publicly because I wanted the full picture and I needed to work out where I actually stand.

Here's the breakdown.

About a month ago Zano pushed a network upgrade through a hard fork. There was a flaw in the new code that nobody caught for an entire month. An inflation bug, meaning whoever found it could mint Zano and Freedom Dollar out of thin air. It surfaced on Friday the 25th when the price dumped around 25 percent and somebody on the team asked why so much was suddenly being sold.

Nobody knows how much got created. There's still no public number. A person close to the project said they couldn't confidently establish the amount, which is why they rejected simply buying the fake coins back. The marketing lead told Cointelegraph it was "considerable." Some of it sat in accounts with visible balances and can be counted, but once it got spent into ordinary private outputs it stopped being traceable. That's the tradeoff with a privacy coin, and it's why a clean audit is so difficult. The post-mortem still hasn't been published.

So the team faced two bad options. Do nothing and accept that the supply everybody was promised might be meaningless. Or roll back the chain.

They rolled it back. First they announced 24 hours, then walked the language back to a "coordinated network upgrade," then rolled back a full month.

On this show I get into:

Why immutability is the whole point of a blockchain, and what it means when a month of it can be undone.

What the speed of that decision tells us about how decentralized the project actually is.

The transaction I lost. Three weeks ago I helped a meat vendor at the Bastrop Farmers Market set up a wallet and bought $130 worth of meat with Zano. I've eaten the sausage. When my wallet resyncs I'll have the Zano back and he won't. I'm going to go make that right with him.

Why I don't think this was insider action or a cover-up, and why I still think the rollback may have been the right call for the project's survival.

The part that bothers me most, which is that the core team didn't catch this for a month while outside parties are running AI across crypto codebases hunting for exactly this.