The EOS government is rolling back transactions, as an arbitration report made public today shows. The paper states that the resolution to roll back the transaction answers to the fact that the hacker took control of it in a phishing attack. Despite this, this fact has alerted some about the dangers that an EOS rollback policy brings.
EOS Rollback Activated
EOS, one of the top 5 cryptocurrencies, has the power to roll back transactions on its blockchain. This is already happening, as evidenced in the ruling document made public today on social networks. The ruling states that the claimant (VH) now can possess his funds again. Written in a pseudo-legal way, it explains the reasons and justifies its ruling with a series of arguments. It even features an arbitrator and a case manager.
Supposedly a phishing attack affected the claimant, and he submitted the case to the EOS governance structure. They failed at his favor, ordering miners (Block Producers) to undo the changes made and return the funds via EOS rollback.
To some, this does seem good, because the phishing scam was nullified. But for the more cryptocurrency savvy, this is a terrible trend. Cryptocurrencies are all about trustless transactions, and not about getting third parties into the dealings. After all, that’s what they were designed to avoid since day one.
Is The EOS Approach Right?
However, this is not new, and in its time EOS rollback was advertised as a feature for the new blockchain. The ability to roll back changes to the blockchain via an arbitration process. This arbitration process would rule about any controversies regarding EOS funds. But this focus brings a series of problems with them.
Blockchain and smart contracts system are trustless. This means that no people can be in charge of them and the platform must manage this by itself. The introduction of a third party that can rule over transactions seems to go against this fact. Also, blockchain is meant to be an immutable ledger. To modify it (even if it is for good) seems to deprive it of that.
The approach of arbitration also brings other operational concerns. If EOS in the future manage to scale big enough to serve as an important currency, what will happen if hack attempts multiply? This is a good question, as these procedures will be more and more common. The currency might not be able to scale because its incapability to process every requirement.
Now, this adds up to the bad reputation that EOS has with smart contract hacks lately. But this does not seem to affect China’s consideration about EOS. They still rank it number one among all cryptocurrencies.