WTF is CZ saying?
Uncle Marty is becoming an old man before 30. I've been waking early and trying to go to bed before 10:00 PM during the week as often as possible. Last night, I was successful in that endeavor and dozed off around 9:15, luckily it would seem. I awoke to the unexpected drama produced by the founder of Binance seriously (at least temporarily) contemplating a re-org to recover the 7,074BTC that were stolen from his exchange yesterday afternoon at block height 575,013.
Binance co-founder and CEO "CZ" talks re-org, rollbacks, of the BTC chain to recover 7,000 bitcoin. #bitcoin pic.twitter.com/86bWsccPfu
— CoinSpice (@CoinSpice) May 8, 2019
As of writing, we are currently at block 575,137. One hundred and twenty-four blocks away from the hack. At this point, that transaction is buried under those confirmations and at least 300BTC that have been released from coinbase transactions to the miners who mined the blocks they were included in. A re-org certainly isn't happening at this point.
However, the positing from CZ that he had the ability to re-org the chain, but decided not to is extremely questionable and has caused quite a stir on Bitcoin twitter. To pull this off, Binance would have needed to coordinate with miners to rewrite the chain to change the transaction executed by the hacker. Now, that doesn't seem very decentralized or trustless, does it? Nor does it seem very practical.
Luckily, it seems as though CZ realized this pretty quickly and negged on his comments. Nonetheless, it has sparked heated debate about the nature of re-orgs and double spends, Bitcoin's perceived immutability and the game theory behind it all.
I am not going to rehash all that was discussed while I was asleep, so here are a few threads that you should check out on the subject:
1/ Waking up to see that @cz_binance suggested rolling bitcoin back (in the next few days lol!!) to recover his lost funds.
— Udi Wertheimer (@udiWertheimer) May 8, 2019
He now wants to put this bad idea to sleep, but I won’t. Here’s a thread. Read it, because it’s *your* job to defend bitcoin from this crap pic.twitter.com/KHjfw2kjXx
If you're handwringing about whether or not it would be 'acceptable' for Binance to create a massive double-spend transaction to get their funds back from the hack via massive reorg, then you've forgotten how this *permissionless*, *amoral* network called #bitcoin operates. /1
— Mario Gibney (@Mario_Gibney) May 8, 2019
The same thing was suggested in 2016 when Bitfinex suffered a hack of 120,000 BTC.
— BitMEX Research (@BitMEXResearch) May 8, 2019
Read the comments from back then, which explain some of the potential negative consequences of a re-org like this.https://t.co/QPylm6ZFOn
0,73% of lightning is running on a freaking @nodl_it
— nodl (@nodl_it) May 7, 2019
I'm not sure if you freaks have been following the Rabbit Hole Recap, but Matt Odell and I have been experimenting with a nodl.it node that was sent to us.
Well, we plugged it in a month ago, and since then it has quickly jumped to the 47th largest node in the Lightning network. At least of the nodes which are public. What a world.
Soak in the gravity of a world in which a couple of podcasters can plug in a machine smaller than a tissue box and aid a globally accessible financial network with liquidity and routing support.
The future is here. It's just not evenly distributed.
Final thought...
I need to get better at time/calendar management.
