Binance Hack: Why a reorganization of the Bitcoin Blockchain is a bad idea

the had to organize hand-Changpeng Zhao, the idea, due to the current Binance Hacks and the theft of 7,000 Bitcoin, the Bitcoin Blockchain. However, the CEO of Binance can arrange a "Blockchain Reorganization" and implement? And he should? An insight into the Blockchain Reorganization.

By Phillip Horch
8. May 2019BTC$5.923,00 0.97%Facebook Twitter LinkedIn xing mail

It currently does the rounds in the news divisions of the crypto-pages: Binance a 40 million US Dollar. In the case of an attack, Unknown persons have stolen currencies over 7,000 BTC from one of the largest trading places for Crypto. Directly after there was a dubious idea from Changpeng Zhao. So the CEO of Binance thought (he has dropped the idea now and again), a Blockchain Reorganization. So, the hope is that Zhao's, you could make the output of the 7,000 BTC to undo the Bitcoin Blockchain, therefore, reorganize, and neither Binance would have to touch the "SAFU-Fund", could fill in Justin Sun the heroic and the damage in the Tether to settle. But is that so easy?

a Blockchain Reorganization

Disclaimer: In the following Text, it is a measure to be forced a little more technical. For a better understanding of the Tutorials to the 51% attack to Bitcoin Mining and Blockchain technology, or the Podcast are recommended to the subject of Proof of Work.

in Order to understand how a reorganization of the Bitcoin Blockchain could be made to work, we need to look for something in the Depths of the Blockchain and their internal security mechanisms.

One of the great advantages of the Blockchain technology, which is under the crypto-currency Bitcoin, is your Immutabilität. In other words, it is immutable. What was once carved into the Blockchain, one can no longer remove. Thus issued Bitcoin once and for ever, spent, transactions you cannot reverse the action. Two related exceptions.

The 51-percent-attack

A way to break the Bitcoin Blockchain, would be a 51-percent attack. To do this, attackers would need to be in possession of more than half of the Hash Power. You have the right to vote, to write a new, valid Version of the Blockchain. Especially in view of the increasing centralization by the individual Mining Pools (keyword: Antpool) came here in the past to concerns of the Community, that larger players can break the Blockchain.

to do This, one is reminded of the consensus mechanism in Bitcoin: Via SHA 256 Miner about the currently valid Version of the Blockchain to be agreed and can attach this "chain of blocks" until a new valid Block, if you calculate a valid and correct new Block "".

it Creates now a group of hard-working miners, to control more than half of the total Hash Rate, you could play a new Version of the Blockchain in the System, they would have the majority (over 50 percent) and could manipulate the consensus to their favor. So you would be able to Bitcoin's double-spending, called the Double-Spending Problem.

a Blockchain Reorganization – the reorganization of the "block chain"

Bitcoin Miner consequences – that may sound logical – the currently valid Version of the Blockchain and which radiates the highest degree of accuracy. According to Blockchain logic is that the one with the most blocks, so the Version of the Blockchain, the chain is at its longest. Actually, it is the Version that has the highest Difficulty and the highest number of blocks. With each new Block that is added to the chain, is also the work performance higher, one speaks of Work Done.

now, If two miners at the same time find a new Block, they compete in order to have the latest Version of the Blockchain. So it comes to a short-term Fork. They then compete for the correct Version of the Blockchain; anyone who finds the next correct Block, it is allowed to claim the correct Version of the Blockchain. The Rest breaks down, you want to speak in crypto-images, and remains in the Ether of ones and zeros. One then speaks of an "Orphan Block" orphan "Block." Here, the nodes reorganize themselves and associate themselves with the new, valid Version of the Blockchain.

United (malignant) forces: reorganization by 51-percent-attack

now Has a single attacker has enough Hash Power to 51-percent-attack, he can fake such a reorganization of the Blockchain. So he could use his valid Version of the Blockchain by boxes, and on top of that Bitcoin to your liking. To do this, he would be mines, first in Private new block, in order to transmit it later to the other miners.

Why is car Binance no reorganization of the Blockchain and may

The idea of Changpeng Zhao, who organise the Bitcoin Blockchain for Binance, gives the impression of a lack of technical knowledge. Either of the Binance Boss is not aware of the technical effort, a reorganization of the Blockchain means, or he overestimated the importance of his company's self-indulgent.

No question, Binance is one of the largest stock exchanges of the crypto-Ecosystem. However, because of the theft of 7,000 Bitcoin, a reorganization of the Blockchain to be arranged, cannot and must not do. Because the basic idea would be corrupted behind Bitcoin and the idea of the Satoshi Nakamoto brought ten years ago, in his White Paper to the Public, ad absurdum. Because of the technical failure of a single Institution, you can't knock down the entire ten-year history of the Blockchain.

Furthermore, and this is at least as important: How often in the history of crypto currencies and the Blockchain technology has failed a single Institution. Neither Bitcoin the Blockchain technology, made this security leak is possible. It is the infrastructure of a single Player, that was the infamous Single Point of Failure, which may sometimes be ever been a reason to call the Blockchain.

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