‘Shocked He Went There:’ Crypto Takes Sides On Binance’s Alleged Bitcoin Reorg Plan
Cryptocurrency’s best-known figures continue to debate exchange Binance’s handling of its $40 million hack amid claims executives planned to undo past Bitcoin transactions.
Binance CEO Rejects Reorg
In a lengthy debate still playing out on social media, Binance received mixed reviews after CEO Changpang Zhao appeared to suggest there was a plan to conduct a reorganization (‘reorg’) of the Bitcoin blockchain. The step would theoretically allow the transactions involving the bitcoins hackers stole from Binance May 7 to no longer fall under their control.
At the same time, an entire day’s worth of user transactions would become void.
Reorgs to fix erroneous transactions are extremely difficult to do for decentralized blockchains — and, in the case of Bitcoin’s, de facto impossible due to the consensus demands required.
As Bitcoinist previously reported, more centralized blockchains can conduct similar activities more easily. EOS, for example, reversed transactions late last year in an episode which likewise attracted negative attention.
While Zhao subsequently explained that the idea remained hypothetical following discussions and that Binance would not pursue any form of the reorg, some reactions criticized him for mentioning the topic.
Mike Novogratz, the Galaxy Digital CEO and major Bitcoin bull, vented rare comments on the topic after Zhao drew a comparison between his plan and efforts by Ethereum (ETH) developers several years ago.
“I am shocked that (Zhao) even went there. Talk of forking or reorganizing the blockchain is close to heresy,” he wrote on Twitter. “When the (Ethereum) community did it the project was like 5 months old. A baby. Bitcoin now has $100 (billion) market cap and is a legitimate store of wealth.”
Back: Reorg ‘Not Happening’
Ethereum co-founder Vitalik Buterin also added a rebuttal, arguing Ethereum’s actions did not constitute a reorg.
“Ethereum did a surgical irregular state change. We never even considered actually rolling back the chain to undo the hack; the collateral damage from that (reverting a day of *everyone’s* transactions) would have been huge and possibly fatal,” he tweeted.
Binance’s back-up fund will cover losses endured by users, while the event appeared to have little impact on buoyant cryptocurrency markets, Bitcoin price shedding $200 but subsequently rebounding.
Mentioning the press handling of the hack as complicating perceptions, veteran cryptographer and Hashcash inventor Adam Back meanwhile took the opportunity to reiterate the difficulty of manipulating the Bitcoin blockchain.
“A Bitcoin reorg is just not happening, and I doubt any Bitcoin industry, miners nor developers considered it either,” he summarized, referencing previous, considerably larger, exchange hacks which came and went without such measures coming to pass.
What do you think about Binance’s remedial measures? Let us know in the comments below!
Images courtesy of Shutterstock, Twitter.