In a recent exchange with the community, Ethereum Foundation’s lead developer, Tim Beiko, firmly rejected the suggestion of rolling back the Ethereum blockchain in response to the massive hack at Bybit crypto exchange. Writing in detail on X, Beiko laid out why such an action is neither feasible nor realistic.
Ethereum’s Complexity Prevents Rollback, Beiko Explains
Earlier this year, on February 21, Bybit, a prominent Dubai-based exchange, experienced a historic hack where attackers made off with $1.4 billion in assets, including mantle-staked ETH (mETH) and other ERC-20 tokens. The breach originated from the compromise of one of the exchange’s cold wallets, sending shockwaves through the industry and sparking discussions about possible recovery strategies.
One option that emerged in these discussions was a potential rollback of the Ethereum network. As the term suggests, a blockchain rollback would undo recent transactions by reverting the blockchain to a previous state.
Beiko highlighted that the idea of a rollback is not new. He pointed to a 2010 incident involving the Bitcoin network when Satoshi Nakamoto applied a software patch to void a problematic transaction where 146 billion BTC were created. At that time, Bitcoin faced minimal mining activity, with the cryptocurrency trading at about $0.07.
Similarly, Beiko recalled the 2016 scenario on the Ethereum network involving TheDAO, a decentralized application that controlled about 15% of the ETH supply and was breached by a hacker. Luckily, TheDAO had a safeguard in place that paused withdrawals for a month in case of a breach, allowing Ethereum developers to step in and manually alter TheDAO’s database in what they termed an "irregular state change." This action, however, led to significant divisions within the Ethereum community, ultimately leading to the creation of the Ethereum Classic chain.
In addressing the Bybit situation, Beiko argues that rolling back the blockchain would be nearly impossible for several reasons. First, the Ethereum network’s protocol rules weren’t technically breached. The hack resulted from a compromised multi-sig wallet interface, with the custodian inadvertently authorizing a fraudulent transaction, leading to asset loss.
Additionally, Beiko noted that unlike the situation with TheDAO, the hacker in the Bybit case has already started moving the stolen funds, which would reduce any attempts at a rollback to a never-ending chase. Furthermore, Ethereum’s network is now vast and intricately interconnected with numerous bridges and DeFi protocols. Implementing another "irregular state change" would likely create a massive and potentially disastrous ripple effect across the system.
Current ETH Market Status
As of now, Ethereum is trading at $2,754, showing a 2.77% increase in the past 24 hours.
ETH trading at $2,756 on the daily chart | Source: ETHUSDT chart on Tradingview.com
Featured image by iStock, chart by Tradingview.
