NXT For Investors #14 – Why Were Security Flaws Purposely Put Into The NXT Source Code?

Tai Zen:  This is Tai Zen and Leon Fu and we’re excited to have with us here today – Aaron. He is one of the most popular and prolific Nextcoin ambassadors on Bitcoin Talk and on all the Nextcoin forums.

Now, there was a lot of people said that that was crazy when they first released the source code on January 3rd, 2014, that they purposely injected three security flaws in there and opened it up for bounty. 

That if somebody wants to review the source code and find those three security flaws, that they would be rewarded for it, and those three security flaws were also there to prevent other people from trying to clone the NXT source code before it was fully developed.

Could you talk a little bit about that? Is that fair? Is that good or is that bad or what’s your thoughts on that?


I didn’t like it; I wasn’t happy about that. To me, the promise was that you’re going to release the source code on January 4th. If they were going to release it with flaws and they should have said, “We’re going to be releasing with flaws”.

So that to me is somewhat of a little bit of the breach of contract. I wasn’t happy about it. I wasn’t unhappy enough to go and sell all my stake, but I recognize why they did that. It makes sense from a tactical perspective. I just would’ve felt a lot more comfortable if they had told us that that’s what they wanted to do.

Tai Zen: So does that conflict with what you just said just a few minutes ago that you prefer that people do not try to clone or copy the NXT source code or…


I assume so there were two ideas, two reasons behind it. One is so that somebody just makes a simple copy and then exploit all of that hard work, part of the case, you have to look at it this way, right?

The IPO brought in funds that made it possible for BCNext to create this thing. Somebody else comes along and just copies all BCNext’s work and takes all of the market share, all the capital of Nextcoin and without doing any of that effort.

Really the victims here are the people who bought into that IPO, they paid for a product to be developed and somebody else’s just going to take it. And without any work of their own, they can accept that copy of it. But the other point was that this is a good way to find bugs perhaps Come-from-Beyond and BCNext missed, right?

Because people don’t know exactly what the bugs are. If they can look through and then they can point out the one that wasn’t the one that they injected in there and they go, “That’s good.” And then they can fix it, the NXT is more secure for it. So there are some good arguments for why it was a good thing to do, why it’s was a good idea. Because…

Leon Fu: It was sort of like an incentive for other programmers to examine the NXT code, right? Because they say, “Wow, I can make so many hundreds of…” I don’t know what the bounty was, but it’s sort of like if I’m a Java programmer, it’s like an incentive for me to go look at the code and study it because I could potentially make money.

Aaron: It’s even a third thing, right? Because now there are people who understand how the code works. And they found all of the errors, the last one is buried deep in the protocol, in the cryptographic curve. To my understanding, it’s going to require a cryptographer to figure that one.

Leon Fu: Okay.

Tai Zen: Well, my thoughts are this, if the source code is that good, how would it be possible for, you know, based on the forums, everybody’s saying that the source code is very genius, right? How would it be possible for another a coder to review BCNext’s code if they are not at his level?

Aaron: It’s a lot easier to…

Tai Zen: Is it possible?

Aaron: Understand some else’s idea and then to figure it out yourself, right?

Leon Fu:

Yeah. I’m not so concerned about copycats because they can copy the source code but they can’t copy the network, the people. Right. So, another Java programmer could just copy it and call it, you know, the Nextcoin or something else.

But I mean a lot of the work is not just a code, but it’s the community that’s being built around the code. Right. And you can’t copy the community, right? Just like you see hundreds of Bitcoin copies, but they are not worth what Bitcoin is worth because they don’t have the community that Bitcoin has or the infrastructure.

Aaron: Well, there is one potential advantage that a copycat could potentially give us. And that’s fair distribution, you have to understand the fact that the distribution was quote-unquote unfair it’s what paid for the development. So I mean…

Tai Zen:

The way I look at is this, Aaron and Leon, a lot of people have commented on my YouTube video channel and on my freedom blog at PrisonOrFreedom.com, and they say that they think it’s unfair, it’s a scam because the 73 original stakeholders got the majority of the coins.

And the way I look at it like this, if you look at the top 500 companies in the world on the S&P 500 lists, you know, I pretty much missed out on all the IPO of those companies, but I don’t complain about it, you know, I mean there are IPOs that come out every day that I missed out on and then it shoots to the moon. So I mean…

Aaron: Not just the IPO. You’re missing out on everything that comes before the IPO, extensive licensing in order to even get involved so the IPO is sort of a good analogy, but I think maybe an even better one. One of those people who came before the IPO, you don’t have any option to do that with the government regulating. These you have the ability to get in the way before anyone can get into a stock way before the IPO.

Tai Zen: You have a lot of articles out on the internet about NXT and then you have a lot of writing out there, now does someone have to contact you in order to use those articles or they are welcome to use your articles and it’s okay and they just need to reference you, what’s the policy on that?

Aaron: Information is nobody’s property.

Tai Zen: So you have no problems with people using your articles on their websites or their blogs or anything like that?

Aaron: You can do anything other than changing it and say that that’s what I wrote.

Tai Zen: So as long as they use it in your words…

Aaron: Or change the words and say that they change the words.

Tai Zen: As long as they’re clear that they re-edit it and which portions re-edit it.

Aaron: As long as they don’t say that I said something that I didn’t say, everything else is fine.

Tai Zen:

Okay. I would also like to add to anyone watching this that I have included the bottom of all of these videos, in this interview with Aaron here and you know, I’m grateful that he took the time to answer a lot of our questions here.

I’m including his NXT address below if you guys want to make donations for his efforts directly to him and be aware that the address below and I will make a mark very clearly that they belong to him so you can donate directly to him even though the videos are on my blog. And I guess if you have a Bitcoin address, you can include it down there too and I’ll post it down there too.

Aaron: Sounds good.

Tai Zen: Alright, well thanks for your time today guys. I hope that you know, this video is able to help you understand more about NXT and we’ll look forward to seeing you guys in the next video. Thanks.


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