The first and highest-voted question comes from Lee, [about] the Binance rollback that was proposed.
"Binance said they considered rolling back the Bitcoin chain, but then decided against it."
"How on earth would that have even happened, if they had decided to [do it]? What would have happened?"
"Would this mean launching a 51% attack?" Yes, that is basically what they proposed.
In order to roll back the chain, Binance must persuade enough miners, at least 51% or more,
to [return to] a block before the attacker made withdrawals of coins from Binance,
set that previous block as the parent, and start re-mining new blocks from that point onwards.
Imagine that Binance had really decided to do this, about one day after the attack.
At that point, they would need to persuade miners to re-mine about 145 blocks [in the Bitcoin blockchain].
[They would also need to muster] their hashing power to overtake the 49% of miners...
who [may continue mining] from the current block; they will have the longest chain.
Overtaking [the minority hash power] would cause a reorganization of the chain.
During this time, they would deliberately mine a transaction from Binance that [pre-emptively]...
spends the funds that the attacker tried to steal.
Once that "recovery" transaction is confirmed, the transaction from the attacker would not succeed.
Those coins [are sent elsewhere] on the chain being [built] by miners [performing] the rollback.
But think about it for a second: 51% is not actually enough [to succeed].
With only 1% advantage in hash power over the [minority] chain,
the majority chain would only gain on them by about 1.5 blocks per day.
With every 100 blocks or so, they would catch up by one block.
Think about this: the chain that was re-organised starts 145 blocks in the past, compared to the minority chain.
Let's say that Binance didn't manage to launch this attack until one day after the theft.
Gaining only 1% per day [is very slow].
As they mine block -145, the other 49% of miners are extending the chain by block +1.
After [the majority chain] has mined 100 blocks, they are still about [144] blocks behind,
because the minority chain has mined another 99 blocks or so.
They started 145 blocks behind; 100 blocks later, they are 144 blocks behind.
After another 100 blocks, they are 143 blocks behind. At this rate, it would take [the majority chain]...
about 150 days to catch up and overtake [the minority chain].
That is a very long time. During that time, if anything goes wrong...
[What happens if] just 1% of miners abandon this effort [on the majority chain] and return to the other side?
It is over. All of that energy put towards rolling back the blockchain is wasted.
Let's say that Binance managed to [organise this attack] in a much shorter period of time.
They act quickly to collaborate with miners, perhaps persuade some pools to join them.
But the pools may start losing miners, because this is a very contentious act.
Let's say they organised this within five blocks. Well, even in that case, it would still require...
a very significant effort to overtake the [minority] chain, because they are still only about 1% faster.
They would need an overwhelming [majority] of the miners on their side, and very quickly...
[for this recovery] to even be doable, purely from a hash power perspective.
Some people have suggested that Binance could bribe miners to do this.
They could bribe them by creating a transaction to [preemptively spend] the funds with very high fees,
which would incentivise the miners, so they would be paid-off to confirm it.
Those fees must be worth more than the rewards from the blocks that the miners would be rolling back.
Let's say they rolled back five blocks. The fees as a bribe must be more than 60 bitcoin,
because miners make 12.5 bitcoin per block just if they continued to mine on the normal chain.
If they roll back the chain, the energy they previously expended to mine those five blocks will be wasted.
Even if they win [in the end]. Presumably, the miners who took this chance have already received the rewards.
If they go back and spend the energy twice, they will not receive the rewards twice.
Only one of the chains will succeed. They will only be paid the block rewards once.
This means that Binance must bribe them with the entire reward amount...
for however many blocks they are trying to re-write, and then some more, because this is risky [operation].
If it fails, that is energy loss. They would lose the reward from Binance [because that transaction is now invalid].
There is another wrinkle: the attacker could offer a bribe of their own.
They could add another transaction on top of the withdrawal transaction for the stolen funds,
which also pays a big fee to miners.
The bribe from the attacker is much less risky; the miners would not need to play the roll-back game.
They could just continue to mine the normal chain, a much less risky proposition [for them].
They would not be spending any energy to go against consensus.
They would be able to earn that reward with almost 100% certainty.
If they roll back the chain, they lose the attacker's [easy] bribe, and it is very risky.
If they don't roll back the chain, they could receive the attacker's bribe for much less risk.
The attacker would need to bribe them with an amount more than the block reward,
because the miner would not be wasting energy [to accept it].
The attacker wouldn't need to bribe them with more [bitcoin] than Binance.
In fact, they could bribe miners with a lot less, because it is a less risky proposition.
The bottom line here is: how would the proposed roll-back work? It wouldn't work.
It is as simple as that. It wouldn't work. It is too risky. It would require immediate coordination.
There is no way, in my mind, that Binance would be able to incentivize enough miners.
Once miners understood that this roll-back could be easily thwarted by a bribe by the attacker,
[they would not be willing to risk] wasting energy.
It is as not easy to attack the Bitcoin blockchain as people think,
even with motivated actors and hundreds of millions of dollars at stake.