Ethereum Divided: Rollback or Risk $1.5B Loss After Bybit Hack

Ethereum Community Divided Over Calls for Blockchain Rollback After Bybit Hack

The Ethereum community is grappling with a contentious debate following a massive security breach at Bybit, which resulted in the loss of nearly $1.5 billion in ETH. The incident has sparked discussions about whether Ethereum should intervene to recover the stolen funds by rolling back the blockchain.

A blockchain rollback, also known as a reorganization, involves reversing confirmed transactions to restore the network to an earlier state. This process typically occurs after a major security breach or exploit and requires validators to reach a consensus to discard the affected blocks, effectively erasing the malicious transactions.

Despite its potential benefits, a rollback remains a controversial and rarely used measure due to its impact on a blockchain's trust and decentralization. Blockchains operate on the principle of immutability, meaning transactions are expected to be final once confirmed. Rolling back transactions challenges this principle, raising concerns about the security and reliability of the network.

BitMEX co-founder Arthur Hayes has been vocal in advocating for a rollback to solve the ByBit hack. He pointed to the 2016 DAO hack, where Ethereum underwent a hard fork to recover stolen funds, as precedent. Hayes argued that since Ethereum previously compromised on immutability, another intervention should not be off the table.

JAN3 CEO Samson Mow also supported the rollback, stating it could prevent North Korea from using the stolen funds to fund its nuclear weapons program.

However, not everyone agrees. Pseudonymous crypto trader Borovik strongly opposed the idea, arguing that a rollback would jeopardize Ethereum's credibility and neutrality. Bitcoin advocate Jimmy Song also dismissed the possibility, stating that the Bybit hack cannot be compared to the 2016 DAO exploit. Song emphasized that the DAO hack allowed for a 30-day intervention, whereas the Bybit attack is already finalized, making a rollback impractical.

Adriano Feria, an Ethereum supporter, introduced an alternative perspective. He argued that Bybit could have avoided this situation by using a Layer 2 (L2) solution with conditional reversible transactions. According to Feria, blockchain technology needs some form of reversibility to ensure real-world adoption.

This debate raises a fundamental question for Ethereum: should it prioritize immutability or