the irreversible transaction feature was introduced to bitcoin by Satoshi in order to solve a very serious issue that everyone using the old payment systems have been facing for years and have led to millions of scams. that feature was charge back of systems such as Paypal.
right now bitcoin offers a strong security and another level of security specific to merchants who are receiving the payments and don't have to worry about it being reversed and the headaches of proving they were scammed to that centralized system.
Topic: Bitcoin is irreversible: strength and weakness - page 5. (Read 1039 times)
That's the saddest part in cryptocurrency. Each successful transactions is irreversible and that is the weakness as you have mentioned when the transactions are meant in some illegal purposes like scams, hacking issues. Once it was settled, we can not do something about it. It can only be refunded by a person if you know him personally. Unfortunately, there isn't any device to returned the amount or to get the transactions invalid.
This was the same thing that Binance CEO mentioned and it caused mayhem in the whole space. Nevertheless, I think personally that blockchain is smart this way and should be allowed to be so. Fact is that, for crypto and blockchain to be very different from the normal fiat we know, we should have these exceptional features. Binance isn't the first exchange to be hacked and honestly many people have experienced worse. We all need to be careful and cautious so we don't fall as victims for anyone.
I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds? Given the advances of cryptocurrency and the blockchain we are experiencing right now, is it even possible?
There is one simple way to reduce huge hacks on centralized exchanges to a bare minimum and that is, the use of combination of phone number, email address, authentication app and other security features for alerts and verification when withdrawals are initiated . . This should be an extra security measure and optional.
Other way to prevent hackers from stealing lot of money is to build some sort of network of platforms on bitcoin blockchain for reversing transactions. Ofcourse this won't affect the irreversiblity of the bitcoin Blockchain.
Another way is the use of multi signature address/wallet or escrow for withdrawing large amounts. This feature can be implemented on exchanges and can be compulsory or optional. Once activated, the exchange would request for multsig address when huge withdrawal is initiated. When the fund is in the address, it will take some time before the owner can be allowed full control of the fund. The address can be provided by the owner, or generated automatically when the feature is enabled or can be generated when signing up for new account on the exchange
Other way to prevent hackers from stealing lot of money is to build some sort of network of platforms on bitcoin blockchain for reversing transactions. Ofcourse this won't affect the irreversiblity of the bitcoin Blockchain.
Another way is the use of multi signature address/wallet or escrow for withdrawing large amounts. This feature can be implemented on exchanges and can be compulsory or optional. Once activated, the exchange would request for multsig address when huge withdrawal is initiated. When the fund is in the address, it will take some time before the owner can be allowed full control of the fund. The address can be provided by the owner, or generated automatically when the feature is enabled or can be generated when signing up for new account on the exchange
I agree with Lucius that one of the ways to minimise the risks is to use escrows. Inability to reverse transactions after they happened seems natural to me. In some cases there are intermediaries protecting from scam, in others you just have to be careful to ensure the protection of your money.
I don't think a technology could make a difference here, but I think something like insurances from hacks can get popular. Say, you are paying a small amount of money monthly, but in case your wallet was hacked the insurance company reimburses your losses.
I don't think a technology could make a difference here, but I think something like insurances from hacks can get popular. Say, you are paying a small amount of money monthly, but in case your wallet was hacked the insurance company reimburses your losses.
Even fiat and gold are irreversible in many ways.
Bitcoin was created with multiple functions and it's just disappointing somehow that we notice its weaknesses more than its strengths when in fact, it is just visible when being used in an illegal way.
We should accept the fact that Bitcoin itself wasn't created perfectly and it's still on the process of improvement so it is just for us to deal with these lapses.
Bitcoin was created with multiple functions and it's just disappointing somehow that we notice its weaknesses more than its strengths when in fact, it is just visible when being used in an illegal way.
We should accept the fact that Bitcoin itself wasn't created perfectly and it's still on the process of improvement so it is just for us to deal with these lapses.
how about physical attack like robbery for example?, Blockchain technologies of course has many advantages, that's doesn't mean it's always perfect. in cryptocurrencies we are the Bank! so how we managing our Bank and keep it safe? that was our problem. Always stay in private maybe the right answer.
Here the list of physical bitcoin attacks :
https://github.com/jlopp/physical-bitcoin-attacks/blob/master/README.md
Here the list of physical bitcoin attacks :
https://github.com/jlopp/physical-bitcoin-attacks/blob/master/README.md
I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds?
no, not when we have already provided lots of easy and convenient ways of securing your bitcoins in a way that it gives you maximum security while making it impossible for hackers to be able to have any way of accessing it.
100% of the hacks are because the victims weren't using these methods or were using them wrong.
And worth to mentioned that it was not designed in the first place. That's why we always preached that you always have to protect everything, not your keys, not your coins. It's case of Binance though, they can't do anything about it as well, they will undermine the integrity of blockchain. CZ knows that as well that's why he immediately shoot down that idea.
I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds?
no, not when we have already provided lots of easy and convenient ways of securing your bitcoins in a way that it gives you maximum security while making it impossible for hackers to be able to have any way of accessing it.
100% of the hacks are because the victims weren't using these methods or were using them wrong.
As far as the Rollback has been applied only once. However, it was done immediately after the event and the transaction was fixed. Moreover, Bitcoin did not have so many transactions. So remember that you have a chance to create too many victims with each rollback.
You can see this rollback...
Quoted from : https://en.bitcoin.it/wiki/Value_overflow_incident
You can see this rollback...
Quoted from : https://en.bitcoin.it/wiki/Value_overflow_incident
Quote
On August 15 2010, it was discovered that block 74638 contained a transaction that created 184,467,440,737.09551616 bitcoins for three different addresses. Two addresses received 92.2 billion bitcoins each, and whoever solved the block got an extra 0.01 BTC that did not exist prior to the transaction. This was possible because the code used for checking transactions before including them in a block didn't account for the case of outputs so large that they overflowed when summed.
A new version of the client was published within five hours of the discovery that contained a soft forking change to the consensus rules that rejected output value overflow transactions (as well as any transaction that paid more than 21 million bitcoins in an output for any reason). The block chain was forked. Although many unpatched nodes continued to build on the "bad" block chain, the "good" block chain overtook it at a block height of 74691 at which point all nodes accepted the "good" blockchain as the authoritative source of Bitcoin transaction history.
The bad transaction no longer exists for people using the longest chain. Therefore, the bitcoins created by it do not exist either. While the transaction does not exist anymore, the 0.5 BTC that was consumed by it does. It appears to have come from a faucet and has not been used since.
A new version of the client was published within five hours of the discovery that contained a soft forking change to the consensus rules that rejected output value overflow transactions (as well as any transaction that paid more than 21 million bitcoins in an output for any reason). The block chain was forked. Although many unpatched nodes continued to build on the "bad" block chain, the "good" block chain overtook it at a block height of 74691 at which point all nodes accepted the "good" blockchain as the authoritative source of Bitcoin transaction history.
The bad transaction no longer exists for people using the longest chain. Therefore, the bitcoins created by it do not exist either. While the transaction does not exist anymore, the 0.5 BTC that was consumed by it does. It appears to have come from a faucet and has not been used since.
One of the most important feature of cryptocurrency is its being irreversible. One the coin is sent, the only way for it to be back to the sender is if the receiver will do the same thing in reverse. Now, in cases of hacks, scams and frauds, it means that you better forget what you already lost as there is no way for you to recover the lost coins.
In other words, once you click the send button there is no turning back. I know that a lot of us are actually considering this a major advantage of Bitcoin or any cryptocurrency for that matter because unlike PayPal there can be no refund requests to happen.
Therefore when you are a victim of a theft, expect no one to be able to help you in recovering the coins. As one author said it, the bitcoin genie cannot be put back into the blockchain bottle.
I am wondering, can we not devise an effective and special technology that can be utilize in case of hacks or frauds? Given the advances of cryptocurrency and the blockchain we are experiencing right now, is it even possible?
Maybe it will happen in the future as the technology will develop to better.
That will be possible to see in the future with better technology and with the other coins, I guess
But for now, the only way we can do to prevent the mistake is by always double check the wallet address before we send bitcoin to them, so we don't make any mistake.
But if that is related to the scam, then I don't think that there is a way to prevent the transaction because once it's sent, we cannot take the money's back, maybe I am wrong.
That will be possible to see in the future with better technology and with the other coins, I guess
But for now, the only way we can do to prevent the mistake is by always double check the wallet address before we send bitcoin to them, so we don't make any mistake.
But if that is related to the scam, then I don't think that there is a way to prevent the transaction because once it's sent, we cannot take the money's back, maybe I am wrong.
That's the problem here, being irreversible is not a good thing.
For my experience;
I have a lot of mistakes when having a transaction, especially when selling some assets from a different decentralized exchange. I mistakenly sent it to a wrong address and my assets can't be retrieved. There's a lot of money waiting for me but was gone for an instant.
The only advantage of it was when I'm receiving the assets and can't be brought back to the project owner.
For my experience;
I have a lot of mistakes when having a transaction, especially when selling some assets from a different decentralized exchange. I mistakenly sent it to a wrong address and my assets can't be retrieved. There's a lot of money waiting for me but was gone for an instant.
The only advantage of it was when I'm receiving the assets and can't be brought back to the project owner.
Bitcoin's main selling point is immutability. There are blockchains like EOS that can reverse transactions, as in the case of theft or fraud, but they are controversial due to the perception that they are centralized and lack immutability. One of the main attractions of blockchain is its irreversibility. I'm curious how the EOS experiment will go, but they may avoid reversing future transactions out of concern of the negative publicity.
I like bitcoin just as it is, and I hope law enforcement will catch thieves using the blockchain.
I like bitcoin just as it is, and I hope law enforcement will catch thieves using the blockchain.
Irreversible transactions are a huge advantage ,if you compare crypto to the paypal scam.In PayPal,you have to rely on the mercy of their dispute resolution process and the mercy of your customers.
I agree. Paypal chargebacks are a menace and have affected me and many people so many times and Paypal does not care most of the time which is why I personally support the irreversible nature of BTC.There is no guarantee that there won't be any more scams even if BTC TXs becomes reversible in nature.
This topic has been discussed so many times.
Irreversible transactions are a huge advantage ,if you compare crypto to the paypal scam.In PayPal,you have to rely on the mercy of their dispute resolution process and the mercy of your customers.
Bank transactions are supposed to be reversible,but that doesn't stop all the credit card thefts.
The only way to protect ourselves against hacks/scams is to keep our passwords safe.
Irreversible transactions are a huge advantage ,if you compare crypto to the paypal scam.In PayPal,you have to rely on the mercy of their dispute resolution process and the mercy of your customers.
Bank transactions are supposed to be reversible,but that doesn't stop all the credit card thefts.
The only way to protect ourselves against hacks/scams is to keep our passwords safe.
If there was an option that in case that a fund has been hacked or is being used into fraudulent things then bitcoin will just be the same as Paypal or that option will just be abused, that why I think it's not viable to have that option. If you were to be hacked then the fault is yours for not keeping your keys in a secure place.
When we talk about bitcoin as a means of payment then in most cases is possible to prevent abuse. In case you buy something in this forum and you use escrow, transaction is safe almost as if you were using PayPal. Since most merchants accept bitcoin using payment processors, they should also in some way protect users, so in a way there is some kind of protection.
In case coins are hacked from user desktop / mobile wallet, only way to get them back is to find hacker and take that coins from him, but this is in most cases impossible. Some method that would make it possible to just move coins from one address to another without private key would be subject to abuse, and would totally undermine concept of bitcoin.
The rule is that who controls the private key of some address, controls coins on that address regardless of whether it is a legitimate user or hacker.
In case coins are hacked from user desktop / mobile wallet, only way to get them back is to find hacker and take that coins from him, but this is in most cases impossible. Some method that would make it possible to just move coins from one address to another without private key would be subject to abuse, and would totally undermine concept of bitcoin.
The rule is that who controls the private key of some address, controls coins on that address regardless of whether it is a legitimate user or hacker.
Bitcoin does not have a central authority that control it activities and that is one of the advantage and also the disadvantage of decentralization, unlike the faint paper money where the bank can make refound back to the sender in the case of wrong sending or frauds where the found still remains in the receiver account and it part of the double spending mechanism. But bitcoin don't have this feature and before a blockchain development that will carter for this will be in place it will take a long time from now, may be when bitcoin get regulated that can happen but until then bitcoin transactions is just base on p2p no middle man.
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