The popular figures of cryptocurrency continue to debate on how Binance has handled the $40 million hack amidst claims that executives had plans to undo past Bitcoin transactions.
In a very long debate which is still making rounds on social media, mixed reviews were received by Binance after Changpeng Zhao (Binance’s CEO) seems to suggest that there were plans to reorganize (‘reorg’) the Bitcoin blockchain. Theoretically, this move will allow the bitcoin transactions stolen on May 7 by the hackers to cease being under their control. Also, user transactions for a whole day would become void.
It’s usually very difficult to carry out reorgs so as to fix erroneous transactions for decentralized blockchains, and talking about this case of Bitcoin, in reality, it is impossible due to the required consensus demands.
While Zhao explained that the idea is still hypothetical and that Binance wouldn’t go ahead with the reorg, he has been criticized by some for bringing up the topic at all.
Cryptocurrency News Today – Mike Novogratz – Vitalik Buterin
CEO of Galaxy Digital, Mike Novogratz commented on the topic after Zhao compared his plans and efforts with that of the Ethereum developers some years back. He took to his Twitter handle and wrote:
“I am shocked that (Zhao) even went there. Talk of forking or reorganizing the blockchain is close to heresy. 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.”
Vitalik Buterin (Ethereum co-founder) made a counterstatement revealing that the actions of Ethereum did not turn into a reorg. He tweeted:
“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.”
The back of fund of Binance (SAFU Fund) will cover for the losses of users. While the event seemed to have less impact on crypto markets, the price of Bitcoin dropped $200 but in a short while bounced back.
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