Speaking on the primary arguments surrounding the fork, Binance founder and chief executive officer Changpeng Zhao, said that decentralization is not “black-and-white”.
Binance Global Inc recently completed its hard fork of the BNB Smart Chain (BSC) network. According to the operator of the world’s largest cryptocurrency exchange Binance, the hard fork was successful. The hard fork is a split that occurs to make a change in the blockchain protocol. In the process, a new one is created to render the old one invalid. It can be recalled that hackers stole around $100 million from the network after spotting a weakness on October 6. According to the report, this caused developers to fork the network in the upgrade v1.1.16.
It is important to note that the exploited funds were around 2 million BNB tokens (US$570 million). Fortunately, the developers were able to halt the process to prevent $470 million from leaving the network.
According to Narek Gevorgyan, founder and CEO of crypto portfolio manager CoinStats, the exploit was handled well but reveals weaknesses in the network.
“In such an unfortunate situation, both the decentralization and security of the BNB chain were put into question. It revealed the network has a single point of failure and the trust of few people is needed to keep the network running,” he said.
As the hard fork was expected to improve security, it raised questions among a section of the community members between centralization and decentralization in the crypto ecosystem.
Speaking on the primary arguments surrounding the fork, Binance founder and chief executive officer Changpeng Zhao said that decentralization is not “black-and-white”. According to him, Bitcoin and Ethereum are not particularly decentralized in certain aspects.
It is argued that Ethereum is not as decentralized as it seems as it went through a similar hard fork in the past. In 2016, the network went through a hard fork after 3.6 million Ether was stolen in a hack. This led to the creation of the Ethereum mainnet. The original was rebranded as Ethereum Classic.
Jonathon Miller, Australian head of the US-based cryptocurrency exchange Kraken, also believes that this kind of fork is a big trade-off.
“Forking the network on this kind of basis [has] very, very big trade-offs because it to a certain extent [does] undermine the principles of a ledger that is immutable – and immutability is a really important function of these decentralized networks,” he said.
Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.
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