Binance Exchange, the last standing warrior against cyber-attacks, was hacked a couple of days ago. Hackers took away 7000+ Bitcoins, which were valued well over $40 million.
Soon after the hack was discovered, the world’s largest crypto exchange suspended withdrawals and announced that it would be using its reserve SAFU funds to compensate all the users for their losses. Apart from this, the exchange also began looking for ways to get hold of the hackers and minimize losses as much as possible.
In the process of doing so, Binance began a discussion on re-organizing the stolen blocks, which could help them make the blocks stolen irrelevant. What it meant that making the stolen tokens unusable for the hackers, though they couldn’t be restored on the platform again.
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However, the move didn’t go down too well with the crypto community and invited mixed reactions, which were mostly critical. Though Changpeng Zhao, Binance Chief, decided against the re-org, it raised quite a few eyebrows and questions on the integrity of the so-called “decentralized” industry. The re-org tweet became such a hot topic of discussion that Zhao had to post multiple tweets to clear his side.
Sure, the intention behind the re-org discussion wasn’t evil, but the result could have been devastating for the reputation, and faith users have for Bitcoin. In fact, even Binance decided to re-org blocks of the stolen tokens; they couldn’t do it because of the sheer immutability of Bitcoin.
evaluating a suggested option is wrong in itself, especially under the circumstances. And under all circumstance, freedom of thought is not a crime.
3. we did not want to do it.
4. we couldn't do it.Bitcoin is secure. Onwards, lots to do…
— CZ 🔶 BNB (@cz_binance) May 8, 2019
However, what this does is raises a far more serious question. Had the hack been on a much smaller token, say a Litecoin or TRON, the re-org would have been possible, so would Binance would have backed off then too?
Secondly, the open discussion about the re-org invited severe flake from the crypto community, but what would have happened had this been a closed-door conversation? One thing what we can be pretty sure that Bitcoin is immutable, and cannot be altered even by giants like Binance, but smaller ecosystem are not as resistant.
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Cryptocurrencies came into existence raising the flags of decentralization, and that is in question due to the recent turn of events. Major players like Binance are powerful, capital-wise and skill-power wise, to tinker with crypto-blocks, while as of late, it seems quite unlikely that Binance will do any tinkering as of now; however, such key players having the power to do so is scary in itself.
