Bitcoin developer and entrepreneur Jimmy Song says any attempt from crypto exchange Binance to roll back the Bitcoin blockchain would have been a spectacular failure.
After hackers stole 7,000 Bitcoin worth $40 million from one of Binance’s hot wallets, Binance CEO Changpeng Zhao said he was considering a plan to convince 51% of miners that power the Bitcoin network to essentially reverse and reorganize recent Bitcoin transactions, including the single transfer that moved the 7,000 BTC off of the exchange.
“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…
The team is still deciding that, and we are running through the numbers and checking everything. It’s interesting that it’s a tech solution [suggested] to us by the community, including some of the core members of the bitcoin development team. We will consider that very, very carefully, with the feedback we are receiving.”
The proposition triggered an intense reaction from the crypto community at large.
It's too bad cz didn't try to reorg.
Why? I think it would have failed spectacularly and would have completely disproven the miner centralization concerns leading to an enormous price spike. Bitcoin is antifragile. It does better after disordering events like a reorg attempt.
— Jimmy Song (송재준) (@jimmysong) May 8, 2019
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. https://t.co/pXSqiUcq0i
— Michael Novogratz (@novogratz) May 8, 2019
3/ this hack was relatively small, but consider Bitfinex’s previous hack of 117k+ BTC, which was 30+ days of block rewards. If Bitfinex could create a smart contract to programmatically incentivize miners to re-org 3 days of the blockchain, the simple economic incentives work.
— Ari Paul ⛓️ (@AriDavidPaul) May 8, 2019
While we're at it, can we please undo the Bitfinex hack and MtGox as well?
Fuck it, let's just reset everything and start from 0.
— WhalePanda (@WhalePanda) May 8, 2019
On Tuesday, Zhao said he consulted with Bitmain’s Jihan Wu and others and decided not to launch a campaign to roll back the network.
He then took things a step further, saying the effort would have flat-out failed.
To put this to bed, it's not possible, bitcoin ledger is the most immutable ledger on the planet. Done. https://t.co/rKLBCEZmgp
— CZ Binance (@cz_binance) May 8, 2019
Binance says it has not found any more compromised wallets, and 7,000 BTC remains the total amount of crypto stolen in the recent hack. The company will reimburse customers using its Secure Asset Fund for Users (SAFU), which allocates 10% of trading fees every month in order to cover potential losses.
Withdrawals and deposits are disabled as the exchange investigates the hack and works to improve security. In the meantime, Binance is advising users to change their API keys and 2FA codes.