The Bybit hack, which saw $1.400 billion worth of Ethereum stolen, cannot simply be reversed, as some in the crypto community have claimed.
Samson Mow and some other members of the crypto community have suggested that Ethereum could reverse the transactions in which around $1.400 billion was stolen from one of Bybit's cold wallets, similar to what was done in 2016 after the hack of The DAO, which gave rise to Ethereum Classic.
However, Tim Beiko, a lead developer at the Ethereum Foundation, has ruled out this possibility, arguing that it is technically complex and could have negative consequences for the network.
Bybit, meanwhile, has implemented measures to mitigate the impact, such as a bounty program to recover stolen funds and collaborations with security experts in an attempt to recover lost funds.
Why is transaction reversal not feasible on Ethereum?
The suggestion to roll back transactions from the Bybit hack is based on a historical precedent: The DAO hack in 2016, which resulted in the creation of Ethereum Classic. However, Tim Beiko and other developers have explained that the current circumstances are very different.
In the case of The DAO, the situation was unique, Beiko explained, because The DAO, the protocol that was exploited by the hacker, had implemented a security measure that kept fund withdrawals from being made. frozen for a month, which gave enough time for the developers and the community to come to an agreement and eventually roll back the chain.
However, in the case of Bybit, the situation is very different, as there was no glitch with the Ethereum network or the multi-signature wallet used by the exchange. Beiko detailed that it was “a compromised interface that made it look like a transaction was doing one thing while it was actually doing another,” noting that from the perspective of the Ethereum protocol, “there is nothing that distinguishes that transaction from other legitimate transactions on the network.” He stated that there is no protocol rule that has been broken where patching the problem would allow the stolen funds to be isolated, making it a practically unviable solution.
Furthermore, Beiko noted that in the case of The DAO, the community reached a near-unanimous consensus to perform a hard fork that would reverse the affected transactions. However, Ethereum is currently a much larger and decentralized network, with millions of users and a more diversified economy, so if a mass reversal of transactions were technically feasible, it would require a similar consensus, something that would be practically impossible given the scale of the network.
INVITE AND WIN“The Ethereum ecosystem is very different today than it was in 2016. DeFi and bridges to other chains mean that stolen funds can easily be mixed within a network of applications,” he explained, noting that this would violate Ethereum’s core principles, such as its security and immutable and decentralized nature.
This stance has been echoed by other members of the community, who argue that opening the door to reversing transactions would set a dangerous precedent. Some have even commented that if Ethereum started altering transactions for specific reasons, it would lose its neutrality and become vulnerable to political and economic pressure.
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The solutions Bybit is exploring to recover funds
Although a transaction reversal is not on the table, Bybit has not sat idly by. The company has implemented several strategies to recover the stolen funds and mitigate the impact of the hack.
The first measure has been the launch of a bounty program, through which up to 10% of the recovered funds are offered to ethical hackers and cybersecurity experts who help track and recover the stolen assets. This program has generated great interest in the community, with several cybersecurity firms and individual experts joining the efforts.
Additionally, Bybit has been working closely with other platforms and projects in the industry, resulting in the recovery of $43 million in assets linked to the hack.
On the other hand, although these measures have been applauded by the crypto community, for many this hack has served as a reminder of the risks associated with storing large amounts of cryptocurrencies on centralized exchanges.
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