Find a bug in any software is not all that uncommon these days. Even the bitcoin ecosystem suffers from bugs every now and then which will affect particular services. One of the latest bugs was discovered in the BIP39 proposal, which affects the Copay wallet. It is unclear how many and which other wallet services may be affected by this problem as well.
An Annoying But Harmless BIP39 Bug
To put this news into perspective, coders discovered there is something wrong with the BIP39 proposal. A different address is generated from the recovery seed instead of restoring access from the original bitcoin wallet. That is quite an annoying and potentially catastrophic bug that could affect thousands of wallet users all over the world. Copay is the one wallet known to implement this solution for sure, albeit others may be affected too.
This bug affects both the seed word paper wallets as well as any service using BIP39 as a wallet recovery mechanism. At first, it was believed Electrum uses BIP39 too, but the service no longer generated BIP39 seeds since version 2.0 was released Other popular wallet providers, such as TREZOR, should not be affected, as they use a different blockchain source.
Thankfully, it does not appear this bug puts any bitcoin balances in jeopardy, according to one user. Wallets can still be recovered with the seed generated during the initial process, even though users may see a bunch of new addresses generated along the way as well. It appears mainly Copay users will suffer from this issue, although their funds will not be at risk by the look of things.
Issues like these will cause a bit of a panic, even though most of it is unjustified. Recovering the bitcoin wallet form a BIP39 seed may have to be done through a third-party solution to recover the full balance, which is more a nuisance than an actual problem. Developers are looking into this problem as we speak and an update will be released soon to make sure the BIP39 concept works as expected.
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