#Binance - Crypto inferno

May

CZ discusses Bitcoin rollback

#Binance, #Bitcoin, #Blockchain, #Crypto, #Cryptocurrency

In the wake of the Binance hack, the Binance CEO seems to have seriously considered trying to get miners to reverse the illegal transaction.

Losing $40 million will make you say, think and do strange things, and we have to hope this is the reason for Changpeng Zhao’s bizarre idea to roll back the Bitcoin blockchain to recover the 7,000 BTC that hackers stole from Binance earlier this week.

In an AMA held shortly after the hack ,CZ commented, ‘To be honest, we can actually do this probably within the next few days. But there are concerns that if we do a rollback on the bitcoin network at that scale, it may have some negative consequences, in terms of destroying the credibility for bitcoin.’

CZ was roundly criticised by many in the crypto community, who hold the integrity of the Bitcoin blockchain as sacrosanct. Mike Novogratz commented, ‘I am shocked that @cz_binance even went there. Talk of forking or reorganizing the blockchain is close to heresy. When the ethereum community did it the project was like 5 months old. A baby. Bitcoin now has $100bn market cap and is a legitimate store of wealth.’

The discussion moved fast, with different proposals of what the fork or special transaction might look like rising to the surface – doubtless in response to the community’s own anger. CZ later appeared to recant on the rollback idea, with this tweet:

To clarify, the proposal by @JeremyRubin & @_prestwich is to construct a TX that would keep all other tx, and just distribute the hacker coins to miners (about 300 BTC/block prod).

It’s not: rollback of any tx, nor is it reverting funds back to Binance.

He ultimately stated that it would not work, and that Bitcoin was too secure and immutable. However, this does not appear to be what was first meant, and it seems likely that the narrative has been massaged to make it appear less serious.

An attempt to alter confirmed blocks or ‘edit’ previous transactions would be an attack on the blockchain, raising a precedent that other, more malicious actors could seek to replicate. CZ has done much for the crypto space and has our gratitude. So we have to give him the benefit of the doubt here: 7,000 BTC is a good reason to consider unconventional solutions. But he cannot be under any illusions that it would risk fatally damaging Bitcoin’s credibility.

Ultimately, this isn’t about CZ or the hackers, it’s about Bitcoin’s security. If one person can gain consensus to reverse a transaction on Bitcoin’s blockchain, it’s very bad news. Bitcoin has to be immutable to be useful. In some ways, it would have been good if CZ actually tried, so we could establish that principle once and for all.