Since the recent $40 million Binance hack earlier this week, the concept of a BTC blockchain reorganization has been brought up multiple times. Binance CEO Changpeng Zhao discussed the idea, although, according to recent comments, he seems to have decided against the proposition.
What Is A Blockchain Reorganization?
A blockchain reorganization would mean altering Bitcoin’s blockchain. In a recent YouTube video, CryptoBobby explained the discussed reorganization as:
“The possibility of directly approaching Bitcoin miners, the people that mined the recent Bitcoin blocks, offering to pay them for reorganizing the blocks to basically take the hacked transaction out of the Bitcoin network, and remove that from the history.”
Such a reorganization likely would not go unnoticed. CryptoBobby brought up the topic of Bitcoin’s immutable ledger being altered. If a blockchain reorganization came to fruition, it potentially could have grave effects on the public’s view of Bitcoin and blockchain in general.
A significant point of strength in Bitcoin lies in its tamper-resistant public ledger: The public, especially mainstream traditional financial giants, might lose respect for Bitcoin, sending the asset back to the dark ages.
Additionally, if a reorganization occurred, it might open the door for more similar actions in the future, possibly even in conjunction with events of less severity, making reorganizations more common.
CryptoBobby mentioned similar ramifications in his video. “It goes to kind of spit in the face of the Bitcoin immutability,” he said.
“We’re talking about Bitcoin being this immutable digital store of gold that may be adopted by institutional investors, and then you could have a very profitable enterprise that was hacked due to its own negligence and is now rolling back time, kind of resetting things to their favor.”
Looks Like No Bitcoin Reorganization From Binance
According to a May 7 tweet, Binance’s CEO “CZ” mentioned the outcome could harm Bitcoin’s credibility, as well as possibly lead to division in the network and the community.
cons: 1 we may damage credibility of BTC, 2 we may cause a split in both the bitcoin network and community. Both of these damages seems to out-weight $40m revenge. 3 the hackers did demonstrate certain weak points in our design and user confusion, that was not obvious before.
— CZ Binance (@cz_binance) May 8, 2019
On May 8, the CEO pointed out a little confusion regarding the blockchain reorganization talk. Jeremy Rubin reportedly brought up the concept that sparked a discussion among the Binance team. The team, however, decided against the idea.
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
The Crypto Community Responds
The crypto community did not take too lightly to the actions discussed by the Binance CEO. Crypto influencer Udi Wertheimer pointed out several problems with the rollback, including the impracticality of such an event. He noted the costs to do so would total “more than the hack itself.”
Additionally, Wertheimer noted the competitive nature of miners, and that they would “be incentivized to break the coup for great riches.” He also pointed out the reorganization might lead to general risks of double spending activities, as well as several other aspects.
Longtime bitcoin aficionado and influencer Davincij15 posited such a rollback would not work, and the only outcome might be a splitting of Bitcoin’s chain.
The discussion also surprised Pixxlated as the Twitter user compared the situation to the DAO hack.
I cannot seriously believe @cz_binance was considering options to "roll back" the blockchain. This isn't a smart contract problem like Ethereum had for the DAO and even that caused an internal split.
We cannot "bailout" negligence. That is not what the blockchain is about. https://t.co/DQAo9LOXOf
— Pixxl | ØDIN (@pixxlated) May 8, 2019
Crypto influencer WhalePanda on Twitter simply stated he did not want to miss the fireworks, should the event occur while he was in transit.
8 hour flight to NY to #MCC2019. Please don't roll back the Bitcoin blockchain while I am offline.
— WhalePanda (@WhalePanda) May 9, 2019