Binance losing 7000 BTC and the consequences of a ROLL Back

[Saf1211]

Yesterday Binance was hacked fgor $40 Million worth of BTC equivalent to 7000 BTC at todays price.
Well we have heard of hacks before what we have never heard of is the mention of rolls backs.
What do you mean Roll Back.
Binance techs have suggested taking 51% control of the miner power and rolling back this transaction.
Does any one else have a problem with this?

And who says they were hacked and not scammed? I would put my 5 cents on inside job, then blame on external factors, and cover it with your shit coin BNB and have another shicoin back it up TRX

saying this there are a number of pictures of comments made in the last attempted hack that conveniently said 7000 BTC disappeared.

not sure if anyone has seen them

[Beerwizzard]

Yesterday Binance was hacked fgor $40 Million worth of BTC equivalent to 7000 BTC at todays price.
Well we have heard of hacks before what we have never heard of is the mention of rolls backs.
What do you mean Roll Back.
Binance techs have suggested taking 51% control of the miner power and rolling back this transaction.
Does any one else have a problem with this?

It seems like the most retarded solution EVER.
Binance is a separate cryptocurrency related service. They are taking people's money and in exchange providing them the currency exchange service. And they are taking other people's money at their own fucking risk.
So what we get in the end is that Binance lost big amount of money and instead of paying compensations they  are asking the entire community to centralize the entire blockchain.
How about repaying those $40 mln from their own pockets? I bet Binance would be able to find such money.

[BlackFor3st]

Binance is part of top exchanges and I also believe that they can surely afford the top notch security the same with other top notch exchanges.

I am a little bit puzzled whether this accident is 100% genuine or there are other reasons behind it like inside job or something similar to it that all of the team members will received a share. We already know that bitcoin is unrecoverable, I am not sure if they will succeed with their plan as I saw that almost half of the said price that were stolen has been withdrawn already.

[BitcoinHodler]

Ethereum rolled back the transactions. The result ? Two coins, a split community and multiples of the actual loss wiped off the market cap instantly.

that is not the only result, it is not even the most important one either. losing market cap, price ,... don't matter at all.
the only important thing that happened to ethereum when they rolled back was that it lost its immutability and is no longer a trusted blockchain because the first thing about a blockchain is that it can not and should not change. if the "owners" decide they want to roll back they can do that any time they want specially when they switch to PoS and increase their power.

[erikalui]

The CEO doesn't even know what he is talking about and then had to take back his words. Like some people have a doubt that Binance has lost even more funds that they don't want to disclose and he is very well aware that even other exchanges have been hacked but never such a thing like a rollback has been ever talked about. It's foolish of him to even make such a statement.

[Saf1211]

The CEO doesn't even know what he is talking about and then had to take back his words. Like some people have a doubt that Binance has lost even more funds that they don't want to disclose and he is very well aware that even other exchanges have been hacked but never such a thing like a rollback has been ever talked about. It's foolish of him to even make such a statement.

My point exactly why talk about this and make it sound so simple. It damages the whole reputation of the BTC chain

[gentlemand]

An impartial and unemotional take here about how a reorg might be put together - https://twitter.com/AriDavidPaul/status/1126071394545090560

The person initiating it would have to make sure miners got more profit out of it than the status quo. Even the stupidest miner would hopefully realise they're devaluing everything, possibly permanently or even fatally.

I find it amazing that after all that's been learnt people at least half familiar with the whole thing could conceive of it being an idea worth exploring. At the same time it's a reminder that immutability is not automatic and has to be protected and maintained.

[jakelyson]

Luckily they are not pursuing it already

EDIT: Jeebus. CZ actually thought of trying to convince miners to do a re-org.



Tweet link: https://twitter.com/cz_binance/status/1125996194734399488

It would be a disaster to bitcoin if someone can convince miners to rollback just like that. Everything that bitcoin stand for will be lost at one fell swoop.

[figmentofmyass]

The person initiating it would have to make sure miners got more profit out of it than the status quo. Even the stupidest miner would hopefully realise they're devaluing everything, possibly permanently or even fatally.

that's the typical hardliner/maximalist stance but it's not well-evidenced. we have no idea how it would turn out. like it or not, the game theory around proof of work is not fully understood or set in stone. a lot of maximalists wouldn't want a post-coordinated-reorg bitcoin to survive, but i also think a lot of them are horrible at reading markets and would be 100% wrong about bitcoin's viability after such an event.

[gentlemand]

that's the typical hardliner/maximalist stance but it's not well-evidenced. we have no idea how it would turn out. like it or not, the game theory around proof of work is not fully understood or set in stone. a lot of maximalists wouldn't want a post-coordinated-reorg bitcoin to survive, but i also think a lot of them are horrible at reading markets and would be 100% wrong about bitcoin's viability after such an event.

It's all still waiting to be figured out, but BTC has the job of upholding crypto's principles in a way others don't.

It's like royal brothers. The one waiting to be king has to be a stiff. All the other ones are free to go and fuck winos in the eye socket. No one cares what they do.

If Bitcoin ever did this many would leave crypto all together and never bother returning. If it can be coaxed into doing it that means everything else can and will if it suits people who are rich, powerful or persuasive enough. It would be back to square one with a whole lot of money, effort and energy wasted along the way.

Immutability and decentralisation will ALWAYS be attacked as hard as possible by tossers who want short cuts. The people resisting know perfectly well that that's its only real value proposition.

[squatter]

It's all still waiting to be figured out, but BTC has the job of upholding crypto's principles in a way others don't.

It's like royal brothers. The one waiting to be king has to be a stiff. All the other ones are free to go and fuck winos in the eye socket. No one cares what they do.

If Bitcoin ever did this many would leave crypto all together and never bother returning.

Perhaps some people would, but I suspect they also might just be a small minority like the BIP148 contingent -- a small uncompromising group who is willing to fork themselves off the network and into obscurity.

If it can be coaxed into doing it that means everything else can and will if it suits people who are rich, powerful or persuasive enough. It would be back to square one with a whole lot of money, effort and energy wasted along the way.

Immutability and decentralisation will ALWAYS be attacked as hard as possible by tossers who want short cuts. The people resisting know perfectly well that that's its only real value proposition. 

The biggest mistake that people make is assuming that Bitcoin is immutable. It's not, and never was. This is a crucial mistake people make in their assumptions about pertinent game theory.

Bitcoin's design puts transaction reliability in the hands of miner incentives. I think Rubin made an interesting point about miners negotiating with one another about whether to build on the most recent block or to mine selfishly. We like to think that Bitcoin's incentives are perfect but there are surely situations where miners could maliciously profit (and have maliciously profited) from reorganizing the blockchain. When we think about smaller reorgs under this incentive set, we just consider it orphaning. 

So, there is an element of cognitive dissonance here and sadly, that's what this boils down to. Do you support free markets -- where miners can reorg the blockchain based on free market incentives -- or do you think these "hardliners" can and should pressure miners into ignoring short term market incentives in favor of their desired outcome?

This is the age-old question about long term vs. short term miner incentives. It really can't be answered with any level of certainty. I will say that I'm skeptical of people who think they can predict how the entire economy of Bitcoin users would react to any given situation. I'm agnostic on this question myself.

Do I want to see coordinate blockchain reorganizations? No, but if it happens, it happened because of Bitcoin's economic design -- full stop. My suspicion is that the market would understand this far better than ultra conservatives who would assume "Bitcoin is dead" because of a reorg. Those people are more like Bitcoin Cash supporters who sold all their coins because of Segwit activation because they fundamentally misunderstood Bitcoin's economic incentives. They'll be forked off and the rest of the network will move on without them.

[gentlemand]

So, there is an element of cognitive dissonance here and sadly, that's what this boils down to. Do you support free markets -- where miners can reorg the blockchain based on free market incentives -- or do you think these "hardliners" can and should pressure miners into ignoring short term market incentives in favor of their desired outcome?

There are short term incentives and then there's the overall incentive for it to remain viable long term.

I have no doubt many miners know little to nothing about what they're actually dealing with, or care. All they're doing is turning electricity into fiat. If such an opportunity did come up I'm sure more than a few would consider it.

There would be other miners and almost every node operator and developer and user doing everything possible to defeat them.

A reorg like this only benefits Binance and whoever they recruit. Why would anyone who is not Binance or being paid by Binance do anything other than go all out to stop them? If one company succeeded a million would attempt the same thing.

[squatter]

So, there is an element of cognitive dissonance here and sadly, that's what this boils down to. Do you support free markets -- where miners can reorg the blockchain based on free market incentives -- or do you think these "hardliners" can and should pressure miners into ignoring short term market incentives in favor of their desired outcome?

There are short term incentives and then there's the overall incentive for it to remain viable long term.

I have no doubt many miners know little to nothing about what they're actually dealing with, or care. All they're doing is turning electricity into fiat. If such an opportunity did come up I'm sure more than a few would consider it.

There would be other miners and almost every node operator and developer and user doing everything possible to defeat them.

A reorg like this only benefits Binance and whoever they recruit. Why would anyone who is not Binance or being paid by Binance do anything other than go all out to stop them? If one company succeeded a million would attempt the same thing.

Same with any selfish mining or double spend attack. They benefit miners and any entities they collude with, no one else. They certainly don't benefit users directly. Miners and services have colluded in such attacks in the past, too. People try to make it out like, "This time is different!" but they fail to realize what truly free markets really entail. 7,000 BTC wasn't enough to garner a serious discussion, but a much larger loss might see stakeholders talking differently, in spite of what the little guys on Twitter might have to say about it.

In some situations, we would have actual user incentives in favor of a reorg as well. If the loss were much greater, the market might perceive it as a huge blow to the ecosystem, like Mt Gox in 2014. An exchange of Binance's size socializing losses across users would also leave a sizeable number of Bitcoin users -- especially when emphasizing active circulating supply -- scathed. In a market so driven by value speculation, everyone has a vested financial interest in a positive outcome. The most principled of bitcoiners will consider a positive outcome to be one where the market crashes and investors lose, but in this kind of situation, I think you'd be surprised how many would opt for the opposite.

Everyone has their own opinion about what would happen. I'm personally not sure. I simply think the people who are so confident that it would be the end of Bitcoin might be wrong. I'm sure the market will confirm this either way eventually. Until then, we can keep debating it.

[Baofeng]

The CEO doesn't even know what he is talking about and then had to take back his words. Like some people have a doubt that Binance has lost even more funds that they don't want to disclose and he is very well aware that even other exchanges have been hacked but never such a thing like a rollback has been ever talked about. It's foolish of him to even make such a statement.

It didn't came for his own mouth, it was proposed to him and others chime in and CZ ask for advises as well. But obviously, he don't know what is this proposal and then when he weigh things down, it doesn't make sense to do it. So let the hackers get that 7000 BTC and have those forensics blockchain expert to track it down. And there are also exchanges who are monitoring the address and will block it the moment they see it entered within their environment.

[Saf1211]

so heres questions obviously a serious conversation has taken place on rolling back. Now if they did what happens to transactions that have happened thereafter.

Imagine if they all reverted back as well.

This whole roll back conversation is creating a reputation that bitcoin is no different to money and can be manipulated to help ones needs.

If roll back was possible im sure the governments would have killed BTC overnight with a roll back for some kind of adverse trade on BTC.

[FreeEarnsActivist]

There is an intresting analysis made by Coinfirm, they follow hacker addresses. Take a look at what kind of tools they use to recognize hacker: https://twitter.com/Coinfirm_io/status/1126082101080743938

[xtraelv]

It's all still waiting to be figured out, but BTC has the job of upholding crypto's principles in a way others don't.

It's like royal brothers. The one waiting to be king has to be a stiff. All the other ones are free to go and fuck winos in the eye socket. No one cares what they do.

If Bitcoin ever did this many would leave crypto all together and never bother returning.

Perhaps some people would, but I suspect they also might just be a small minority like the BIP148 contingent -- a small uncompromising group who is willing to fork themselves off the network and into obscurity.

If it can be coaxed into doing it that means everything else can and will if it suits people who are rich, powerful or persuasive enough. It would be back to square one with a whole lot of money, effort and energy wasted along the way.

Immutability and decentralisation will ALWAYS be attacked as hard as possible by tossers who want short cuts. The people resisting know perfectly well that that's its only real value proposition. 

The biggest mistake that people make is assuming that Bitcoin is immutable. It's not, and never was. This is a crucial mistake people make in their assumptions about pertinent game theory.

Bitcoin's design puts transaction reliability in the hands of miner incentives. I think Rubin made an interesting point about miners negotiating with one another about whether to build on the most recent block or to mine selfishly. We like to think that Bitcoin's incentives are perfect but there are surely situations where miners could maliciously profit (and have maliciously profited) from reorganizing the blockchain. When we think about smaller reorgs under this incentive set, we just consider it orphaning. 

So, there is an element of cognitive dissonance here and sadly, that's what this boils down to. Do you support free markets -- where miners can reorg the blockchain based on free market incentives -- or do you think these "hardliners" can and should pressure miners into ignoring short term market incentives in favor of their desired outcome?

This is the age-old question about long term vs. short term miner incentives. It really can't be answered with any level of certainty. I will say that I'm skeptical of people who think they can predict how the entire economy of Bitcoin users would react to any given situation. I'm agnostic on this question myself.

Do I want to see coordinate blockchain reorganizations? No, but if it happens, it happened because of Bitcoin's economic design -- full stop. My suspicion is that the market would understand this far better than ultra conservatives who would assume "Bitcoin is dead" because of a reorg. Those people are more like Bitcoin Cash supporters who sold all their coins because of Segwit activation because they fundamentally misunderstood Bitcoin's economic incentives. They'll be forked off and the rest of the network will move on without them.

I agree it is not immutable. Every time there is a code change and mandatory update the chain is changed by consensus. But the people who make the decisions is still quite a small group. Most users have no clue about coding so put their trust in the hands of those that make the decision.

Bitcoin has also been rolled back before.

On 15 August 2010 a Bitcoin vulnerability created 184 million bitcoins. It resulted in a patch.

Within hours, the transaction was spotted and erased from the transaction log after the bug was fixed
and the network forked to an updated version of the bitcoin protocol.

Strange block 74638
The most iconic bitcointalk threads. History on Bitcointalk.

But the ideal is immutability. I believe bitcoin is heading in that direction. The rejection of doing a roll back shows maturity.

[dmitrygerasimov]

Yesterday Binance was hacked fgor $40 Million worth of BTC equivalent to 7000 BTC at todays price.
Well we have heard of hacks before what we have never heard of is the mention of rolls backs.
What do you mean Roll Back.
Binance techs have suggested taking 51% control of the miner power and rolling back this transaction.
Does any one else have a problem with this?

And who says they were hacked and not scammed? I would put my 5 cents on inside job, then blame on external factors, and cover it with your shit coin BNB and have another shicoin back it up TRX

saying this there are a number of pictures of comments made in the last attempted hack that conveniently said 7000 BTC disappeared.

not sure if anyone has seen them

They did not loose them, they scr*w up by sending it to a non spendable adress

[1Referee]

They did not loose them, they scr*w up by sending it to a non spendable adress

Since you're so sure about your case, mind to list the non-spendable address(es)?

I'm not saying this isn't what might have happened, but we all know that suspicions and thoughts aren't valid as evidence. Binance isn't perfect, but I'm sure they wouldn't refer to the +7000BTC withdrawal as theft if it was just an internal mistake that lead to the funds become unusable. They could just say it was a withdrawal request from a wide range of traders that has been processed manually.

Losing +7000BTC is the worst form of marketing there is, but they still were seemingly honest and open about it.