Sacrilegious Binance Reorg Would ‘Erode’ Bitcoin: Blockstream

Blockstream CEO and bitcoin expert Adam Back isn't keen on Binance chief Zhao's 'reorg' suggestion. | Source: Flickr/Joi Ito
Blockstream CEO and bitcoin expert Adam Back isn't keen on Binance chief Zhao's 'reorg' suggestion. | Source: Flickr/Joi Ito

By CCN: Blockstream CEO Adam Back told the What Bitcoin Did podcast that the block reshuffling proposed by Binance CEO Changpeng Zhao would raise “geopolitical issues” had it been attempted.

Accept That Bitcoin Is Final

Back explained why the idea of a chain reorganization as a means to punish hackers or rescue lost bitcoins is a terrible idea.

“You just have to accept that Bitcoin is final because a whole bunch of factors which we can get into, but it’s basically, you know, all of the infrastructure is set up to automatically just continue consuming and finalizing transactions. And there’s a lot of inertia and equipment that’s just running away, mining transactions, so it’s very hard. The software is not designed to undo things. The infrastructure isn’t designed to undo it. And there’s all kinds of side-effects if you did. And the side-effects are both technical and economic.

“In game theory, if you can undo something, the attacker can do other things. And people who disagree with the reorg can do other things. People are very incentivized to see it not happen because they’ve seen other coins have this happen and suffer a great loss of credibility as a result. And there are also geopolitical issues that, you know, you would establish a precedent that would erode one of the major benefits of Bitcoin, being censorship-resistance, which ties back to this kind of finality of the network.”

All For One, One For All

The Bitcoin “reorg” idea floated by Changpeng Zhao in the wake of his exchange’s 7,000 BTC loss was quickly withdrawn as community scorn centered on the embattled CEO. Zhao made clear that the idea didn’t originate with him, but his team had considered it and reached out to potential conspirators including Jihan Wu.

Bitcoin chain reorganizations have, of course, taken place throughout the blockchain’s life. The system is designed to tolerate them so long as there is consensus following a reorganization, although a lack thereof would lead to continued reorganizations. The reason that Bitcoin isn’t in a state of constant chaos is that those who have the hashpower abide by the same rules, and many use the same implementation of Bitcoin for their mining nodes.

Core developer Bryan Bishop spoke of a potential scenario where an exchange and a thief essentially battle it out with miners, trying to pay them to accept their preferred version of the blockchain.

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