Bitcoin is irreversible: strength and weakness

[CryptoBry]

One of the most important feature of cryptocurrency is its being irreversible. One the coin is sent, the only way for it to be back to the sender is if the receiver will do the same thing in reverse. Now, in cases of hacks, scams and frauds, it means that you better forget what you already lost as there is no way for you to recover the lost coins.

In other words, once you click the send button there is no turning back. I know that a lot of us are actually considering this a major advantage of Bitcoin or any cryptocurrency for that matter because unlike PayPal there can be no refund requests to happen.

Therefore when you are a victim of a theft, expect no one to be able to help you in recovering the coins. As one author said it, the bitcoin genie cannot be put back into the blockchain bottle.

I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds? Given the advances of cryptocurrency and the blockchain we are experiencing right now, is it even possible?

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[Nadziratel]

One of the most important feature of cryptocurrency is its being irreversible. One the coin is sent, the only way for it to be back to the sender is if the receiver will do the same thing in reverse. Now, in cases of hacks, scams and frauds, it means that you better forget what you already lost as there is no way for you to recover the lost coins.

In other words, once you click the send button there is no turning back. I know that a lot of us are actually considering this a major advantage of Bitcoin or any cryptocurrency for that matter because unlike PayPal there can be no refund requests to happen.

Therefore when you are a victim of a theft, expect no one to be able to help you in recovering the coins. As one author said it, the bitcoin genie cannot be put back into the blockchain bottle.

I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds? Given the advances of cryptocurrency and the blockchain we are experiencing right now, is it even possible?

I agree with you completely. It has to be irreversible!!! No one should have the power to get back blocks or anything!
I just did answer some other thread similar question;

I disagree with the idea of implementing this Rollback. Once completely against the feature of instability! There have been about 100 blocks since the hack problem. And it doesn't feel right to get all this transaction back. Moreover, those who have a lot of money in the crypto world. And no one knows they won't make it a habit.

Thousands of people were being victimized in the event of Mt.GOX, or before, and no one was interested in Rollback? But when it comes to CZ and its precious exchange, we talk about it. CZ says that they are trying to be the best in every speech, making breakthrough in every field. CZ should not forget that the first thing you need to do is to secure the Binance platform and the money there!

The most important thing we need to protect for Bitcoin is that we have to be decentralized. CZ, Ver or any person should not have this power.

[dothebeats]

It should always be irreversible and by no means a done deal once the sent button is done. However one can still divert the said transaction if it isn't confirmed yet, so the mistake can somehow be corrected within a few minutes, so people should be keen on the details of their transactions. As for thefts and fraud, I can say that the irreversible nature of tx somewhat pushes people to better their security and the way they keep funds. It's a double-edged sword, but certainly a good thing since it urges people to take extra caution in handling their money in order to prevent hacks and thefts.

[okala]

Bitcoin does not have a central authority that control it activities and that is one of the advantage and also the disadvantage of decentralization, unlike the faint paper money where the bank can make refound back to the sender in the case of wrong sending or frauds where the found still remains in the receiver account and it part of the double spending mechanism. But bitcoin don't have this feature and before a blockchain development that will carter for this will be in place it will take a long time from now, may be when bitcoin get regulated that can happen but until then bitcoin transactions is just base on p2p no middle man.

[Lucius]

When we talk about bitcoin as a means of payment then in most cases is possible to prevent abuse. In case you buy something in this forum and you use escrow, transaction is safe almost as if you were using PayPal. Since most merchants accept bitcoin using payment processors, they should also in some way protect users, so in a way there is some kind of protection.

In case coins are hacked from user desktop / mobile wallet, only way to get them back is to find hacker and take that coins from him, but this is in most cases impossible. Some method that would make it possible to just move coins from one address to another without private key would be subject to abuse, and would totally undermine concept of bitcoin.

The rule is that who controls the private key of some address, controls coins on that address regardless of whether it is a legitimate user or hacker.

[alisafidel58]

If there was an option that in case that a fund has been hacked or is being used into fraudulent things then bitcoin will just be the same as Paypal or that option will just be abused, that why I think it's not viable to have that option. If you were to be hacked then the fault is yours for not keeping your keys in a secure place.

[davis196]

This topic has been discussed so many times.
Irreversible transactions are a huge advantage ,if you compare crypto to the paypal scam.In PayPal,you have to rely on the mercy of their dispute resolution process and the mercy of your customers.
Bank transactions are supposed to be reversible,but that doesn't stop all the credit card thefts.
The only way to protect ourselves against hacks/scams is to keep our passwords safe.

[Haunebu]

Irreversible transactions are a huge advantage ,if you compare crypto to the paypal scam.In PayPal,you have to rely on the mercy of their dispute resolution process and the mercy of your customers.

I agree. Paypal chargebacks are a menace and have affected me and many people so many times and Paypal does not care most of the time which is why I personally support the irreversible nature of BTC.

There is no guarantee that there won't be any more scams even if BTC TXs becomes reversible in nature.

[pushups44]

Bitcoin's main selling point is immutability. There are blockchains like EOS that can reverse transactions, as in the case of theft or fraud, but they are controversial due to the perception that they are centralized and lack immutability. One of the main attractions of blockchain is its irreversibility. I'm curious how the EOS experiment will go, but they may avoid reversing future transactions out of concern of the negative publicity.

I like bitcoin just as it is, and I hope law enforcement will catch thieves using the blockchain.

[finaleshot2016]

That's the problem here, being irreversible is not a good thing.

For my experience;
I have a lot of mistakes when having a transaction, especially when selling some assets from a different decentralized exchange. I mistakenly sent it to a wrong address and my assets can't be retrieved. There's a lot of money waiting for me but was gone for an instant.

The only advantage of it was when I'm receiving the assets and can't be brought back to the project owner.

[traderethereum]

Maybe it will happen in the future as the technology will develop to better.
That will be possible to see in the future with better technology and with the other coins, I guess
But for now, the only way we can do to prevent the mistake is by always double check the wallet address before we send bitcoin to them, so we don't make any mistake.
But if that is related to the scam, then I don't think that there is a way to prevent the transaction because once it's sent, we cannot take the money's back, maybe I am wrong.

[Johnzky]

One of the most important feature of cryptocurrency is its being irreversible. One the coin is sent, the only way for it to be back to the sender is if the receiver will do the same thing in reverse. Now, in cases of hacks, scams and frauds, it means that you better forget what you already lost as there is no way for you to recover the lost coins.

In other words, once you click the send button there is no turning back. I know that a lot of us are actually considering this a major advantage of Bitcoin or any cryptocurrency for that matter because unlike PayPal there can be no refund requests to happen.

Therefore when you are a victim of a theft, expect no one to be able to help you in recovering the coins. As one author said it, the bitcoin genie cannot be put back into the blockchain bottle.

I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds? Given the advances of cryptocurrency and the blockchain we are experiencing right now, is it even possible?

But the best question to be  answered is "does the hackings that happening in cryptocurrency is really legit"? I mean do some people that outside the team or dev are involved in hackings? Or are we facing inside Jobs on this part.sorry but until now i don't believe that there are no person inside that act towards those successful hacks

[muslol67]

As far as the Rollback has been applied only once. However, it was done immediately after the event and the transaction was fixed. Moreover, Bitcoin did not have so many transactions. So remember that you have a chance to create too many victims with each rollback.


You can see this rollback...

Quoted from : https://en.bitcoin.it/wiki/Value_overflow_incident

On August 15 2010, it was discovered that block 74638 contained a transaction that created 184,467,440,737.09551616 bitcoins for three different addresses. Two addresses received 92.2 billion bitcoins each, and whoever solved the block got an extra 0.01 BTC that did not exist prior to the transaction. This was possible because the code used for checking transactions before including them in a block didn't account for the case of outputs so large that they overflowed when summed.

A new version of the client was published within five hours of the discovery that contained a soft forking change to the consensus rules that rejected output value overflow transactions (as well as any transaction that paid more than 21 million bitcoins in an output for any reason). The block chain was forked. Although many unpatched nodes continued to build on the "bad" block chain, the "good" block chain overtook it at a block height of 74691 at which point all nodes accepted the "good" blockchain as the authoritative source of Bitcoin transaction history.

The bad transaction no longer exists for people using the longest chain. Therefore, the bitcoins created by it do not exist either. While the transaction does not exist anymore, the 0.5 BTC that was consumed by it does. It appears to have come from a faucet and has not been used since.

[BrewMaster]

I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds?

no, not when we have already provided lots of easy and convenient ways of securing your bitcoins in a way that it gives you maximum security while making it impossible for hackers to be able to have any way of accessing it.
100% of the hacks are because the victims weren't using these methods or were using them wrong.

[Kemarit]

I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds?

no, not when we have already provided lots of easy and convenient ways of securing your bitcoins in a way that it gives you maximum security while making it impossible for hackers to be able to have any way of accessing it.
100% of the hacks are because the victims weren't using these methods or were using them wrong.

And worth to mentioned that it was not designed in the first place. That's why we always preached that you always have to protect everything, not your keys, not your coins. It's case of Binance though, they can't do anything about it as well, they will undermine the integrity of blockchain. CZ knows that as well that's why he immediately shoot down that idea.

[sopanbmp]

how about physical attack like robbery for example?, Blockchain technologies of course has many advantages, that's doesn't mean it's always perfect. in cryptocurrencies we are the Bank! so how we managing our Bank and keep it safe? that was our problem. Always stay in private maybe the right answer.

Here the list of physical bitcoin attacks :
https://github.com/jlopp/physical-bitcoin-attacks/blob/master/README.md

[Genemind]

Even fiat and gold are irreversible in many ways.
Bitcoin was created with multiple functions and it's just disappointing somehow that we notice its weaknesses more than its strengths when in fact, it is just visible when being used in an illegal way.
We should accept the fact that Bitcoin itself wasn't created perfectly and it's still on the process of improvement so it is just for us to deal with these lapses.

[kryptqnick]

I agree with Lucius that one of the ways to minimise the risks is to use escrows. Inability to reverse transactions after they happened seems natural to me. In some cases there are intermediaries protecting from scam, in others you just have to be careful to ensure the protection of your money.
I don't think a technology could make a difference here, but I think something like insurances from hacks can get popular. Say, you are paying a small amount of money monthly, but in case your wallet was hacked the insurance company reimburses your losses.

[Ucy]

There is one simple way to reduce huge hacks on centralized exchanges to a bare minimum and that is, the use of combination of phone number, email address, authentication app and other security features for alerts and verification when withdrawals are initiated . .  This should be an extra security measure and optional.

Other way to prevent hackers from stealing lot of money is to build some sort of network of platforms on bitcoin blockchain for reversing transactions. Ofcourse this won't affect the irreversiblity of the bitcoin Blockchain.
 
Another way is the use of multi signature address/wallet or escrow for withdrawing large amounts. This feature can be implemented on exchanges and can be compulsory or optional. Once activated, the exchange would  request for multsig address when huge withdrawal is initiated.  When the fund is in the address, it will take some time before the owner can be allowed  full control of the fund.  The address can be provided by the owner, or generated automatically when the feature is enabled  or can be generated when signing up for new account on the exchange

[MakeMoneyBtc]

I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds? Given the advances of cryptocurrency and the blockchain we are experiencing right now, is it even possible?

The best way to resolve this cases of hacks and frauds is to prevent them because once your bitcoin is gone, it's gone for good. Now, the thing is this ties to the '' problem'' of anonymity because once blockchain is anonymous, even if you find the place(bitcoin adress) where your bitcoin is you cannot do anything. Also police doesn't have much knowledge at all about cryptocurrencies so they also cannot help you with this.