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Binance will not perform a rollback on the Bitcoin network to recover the funds that have been stolen during the hack on the exchange on Wednesday. In the hack, 7000 BTC got stolen.
Binance CEO Changpeng Zhao says that Binance has decided to not pursue the 're-org' approach', after discussions with different miners. CZ lists four reasons, one of which is that they may damage the credibility of Bitcoin.
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) 8 mei 2019
In an AMA shortly after the statement on the hack, CZ addressed the option that Binance could issue a rollback on the Bitcoin network. "There is the discussion about: do we want to issue a rollback on the Bitcoin network? Because right now 7000BTC, if we distribute that to miners, will be far higher than what they paid for the last few blocks. To be honest, we can actually to this in the next few days.
"But there are concerns if we do a rollback on the Bitcoin network at that scale. It may have some negative consequences for Bitcoin. So again, t he team is still deciding that and we're running through the numbers and checking everything."
Those negative consequences are the dangers that come with a rollback, but more so the reputation of Bitcoin. If any party could just rollback the Bitcoin network, even after a hack, the Bitcoin decentralization isn't worth much.
Binance has now decided to not issue the rollback after discussions with miners. CZ says that the pros were that they could 'revenge' the hackers by moving the fees to miners, that they could deter future hacking attempts in the process and that they could explore the possiboloioty of how the Bitcoin network would deal with situations like these.
There were more cons however. According to CZ, 'we may damage the credibility of BTC, we may cause a split in both the Bitcoin network and in the community and the hackers did demonstrate certain weak points in our design and user confusion, that was not before.' CZ says 'it was a very expensive lessen for us, but it is nevertheless a lesson'.
pros: 1 we could "revenge" the hackers by "moving" the fees to miners; 2 deter future hacking attempts in the process. 3. explore the possibility of how bitcoin network would deal with situations like these.
— CZ Binance (@cz_binance) May 8, 2019
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
cons: 4 While it is a very expensive lesson for us, it is nevertheless a lesson. it was our responsibility to safe guard user funds.
— CZ Binance (@cz_binance) May 8, 2019
We should own up it. We will learn and improve.
As always, thank you for your support!