Binance Coin continues to surge after it saw a massive spike in its value over the past 24 hours. BNB currently stands at $27.08 with 14.20% increase in the last 24 hours, making it an all time high. Even though the exchange lost more than $41 million in bitcoin hack last week, the coin has still maintained its position as one of the top 10 cryptos in the world.
Binance, a Malta-based bitcoin and crypto exchange, is one of the most respected exchanges in the world. Just last week, the exchange was hacked and the perpetrators managed to steal more than 7,000 bitcoins from the company’s reserves. After the hack, it was expected that investors would likely dump their tokens onto the market, which it did initially. However, seeing the last 24-hour rally in price it can be predicted that the hack had no effect on the investor confidence. Over the previous 24 hours, the price of Binance coin has gone up almost 16% while altcoins like Ethereum and Litecoin have shown a growth of 7 and 5 percent respectively.
Analysts suggest that the current price performance of the token can be attributed to the fact that Binance was open and transparent about the attack. The company informed its investors as soon as they assessed the damage done by the attack. Just days after the attack, CEO and founder Changpeng Zhao held an Ask-Me-Anything session on reddit. In the session, Zhao, who goes by his nick CZ, said that the company would try to rollback the bitcoin blockchain which would reverse the transaction back to the reserve. He also explained the consequences:
To be honest, we can actually do this probably within the next few days. But there are concerns that if we do a rollback on the bitcoin network at that scale, it may have some negative consequences, in terms of destroying the credibility for bitcoin.
The idea of rolling back the bitcoin blockchain caused a lot of stir in the crypto world. Influencers were quick to point out that a rollback of the bitcoin blockchain can be catastrophic for the miners. Crypto influencer Udi Wertheimer was quick to point out the fact that redeeming 7,000 bitcoins would cost more to the crypto community than the hack itself. He said this on his Twitter while addressing the statement made by the Binance CEO on Reddit.
1/ Waking up to see that @cz_binance suggested rolling bitcoin back (in the next few days lol!!) to recover his lost funds.
He now wants to put this bad idea to sleep, but I won’t. Here’s a thread. Read it, because it’s *your* job to defend bitcoin from this crap pic.twitter.com/KHjfw2kjXx
— Udi Wertheimer (@udiWertheimer) May 8, 2019
He then went on to explain in his tweets:
First off, the idea that this rollback of *days* would even be practical at all for anyone involved is insane. A day of mining costs 1,800 BTC. Rolling back four days costs more than the hack itself, even before you consider how badly miners would be punished for attempting this.
Udi went into details of the fallback that a rollback may cause to the bitcoin community and investors as a whole, and shot down the idea. He stated that reorganizing the blockchain for a hack of 7,000 bitcoin is “ridiculous” and went on to explain the scenarios in which a rollback of the whole blockchain could be a viable option. He tweeted:
“So again, realistically this isn’t a concern, no one would reorg days for 7,000 BTC. But here’s what you should be concerned about: what if 500,000 BTC get stolen? what if exchange won’t be able to make users whole? lovable influencer says “we should reorg”? I’d argue it would still be impossible, but the drama could be real and painful. That’s why we must learn from this, stay vigilant, and not cut people some slack when making these suggestions in “test runs” like this one.”
The company has been informing its users about any updates about the hack through their Twitter. On the 12th of May, the company announced that the deposits and withdrawals should come back live by the 14th of May, and the exchange will start normal function after some time. The company in their blog post said that they are working on a few security updates on their platform so that such incidents may be stopped. The post read:
Our team is making progress and has been working through the weekend. In the past few days, we have made some significant overhauls to our system, with a large number of advanced security features added and/or completely re-architected. We will share details on some of the changes later.
Binance Bounces Back
The Binance attack was different from previous security compromises in crypto exchanges. In this case, Binance had the capital to pay off all of its users affected by the breach. The firm had been putting away a percentage of monthly profit in a Security Asset Funds for Users which was established to recoup any losses the company had faced. Binance had multiple offers from investors for any financial help to which CZ replied:
We are hurt but not broke.
The overall handling of the whole situation by CZ and his whole team at Binance is the reason why such a catastrophic hack that might have destroyed any other company did not result in a severe price drop in the Binance Coin.