In the aftermath of the recent multi-million dollar hack on the cryptocurrency exchange Binance, the startup’s CEO Changpeng “CZ” Zhao publicly discussed whether his centralized company should roll back Bitcoin’s blockchain to reverse the transactions which saw hackers siphon 7,000 BTC ($42 million) from Binance.
CZ’s open discussion to rollback the blockchain was not taken lightly by prominent Bitcoin community members, as doing so would severely damage Bitcoin’s credibility as an immutable blockchain.
The contentious CEO even received a sarcastic response from Vitalik Buterin when he announced that he ultimately decided not to attempt to roll back Bitcoin’s blockchain:
Wait what?
— Vitalik Non-giver of Ether (@VitalikButerin) May 8, 2019
What in the World was CZ Thinking?
The fact that CZ – who runs the world’s largest cryptocurrency exchange – thought that re-organizing the Bitcoin blockchain to recover 7,000 BTC was a possibility, is almost unbelievable.
However, it’s worth noting that this conversation was initiated by Jeremy Rubin, a core Bitcoin developer who previously contributed to Bitcoin’s code. The conversation then expanded to include other prominent members and miners involved with Bitcoin, where this absurd idea was then put to rest.
After speaking with various parties, including @JeremyRubin, @_prestwich, @bcmakes, @hasufl, @JihanWu and others, we decided NOT to pursue the re-org approach. Considerations being:
— CZ Binance (@cz_binance) May 8, 2019
Prior to this decision, CZ proclaimed that he could probably convince the largest Bitcoin miners to gather over 51% of the network’s total hashing power and roll back Bitcoin’s network transactions.
As reported by Coindesk, CZ said:
“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.”
These remarks from CZ were not perceived well by the cryptocurrency community.
For instance, Bitcoin angel investor, Simon Dixon proclaimed that if Binance could re-org Bitcoin, any big financial institution could as well, and Bitcoin would be deemed useless.
Why would you even consider it? If Binance can re-org Bitcoin we might as well all get out of crypto as JP Morgan and the Fed could too.
— Simon Dixon (@SimonDixonTwitt) May 8, 2019
Another disgruntled Bitcoin enthusiast by the name of Udi Wertheimer is completely baffled that CZ was considering such an attempt. In a long Twitter thread, he explained why this idea was so bad and would have never worked even if CZ had attempted to re-org Bitcoin.
In the thread, he explained that a day of mining costs 1,800 BTC, consequently by the time CZ succeeded at rolling back the chain it would have cost him more than the hack itself.
1/ Waking up to see that @cz_binance suggested rolling bitcoin back (in the next few days lol!!) to recover his lost funds.
He now wants to put this bad idea to sleep, but I won’t. Here’s a thread. Read it, because it’s *your* job to defend bitcoin from this crap pic.twitter.com/KHjfw2kjXx
— Udi Wertheimer (@udiWertheimer) May 8, 2019
Final Thoughts
All in all, CZ claimed to have learned a lot about re-organizing the Bitcoin blockchain by openly discussing it with community members. Since the open discussion, CZ listed the pros and cons of re-org the blockchain, and the cons far outweighed the pros.
This entire situation has proved an eye-opener, and as Wertheimer points out, if there were to be a larger hack of 500,000 BTC or so, and a prominent influencer recommended that we should re-org, how would the community respond?
To this he said:
“I’d argue it would still be impossible, but the drama could be real and painful. That’s why we must learn from this, stay vigilant, and not cut people some slack when making these suggestions in “test runs” like this one.”
Meanwhile, Binance’s BNB cryptocurrency continues to tank after the fallout of the Binance hack and CZ’s counterproductive actions and recommendations. BNB is currently trading at $21, down just over 2% today alone. Whether the sell-off will continue or people will buy the dip is yet to be determined.
Do you think that someone would ever have enough influence to re-org the Bitcoin blockchain if there was a big enough hack or reason to do so? Let us know what you think in the comment section below.
