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Schwartz Compares Arbitrum's Emergency to Bitcoin's 2010 Bug
TL;DR
Ripple's David Schwartz defends Arbitrum's emergency action to freeze 30,766 ETH after a KelpDAO exploit, likening it to a critical Bitcoin bug from 2010. The move has sparked concerns over centralization.
Key points
- David Schwartz defends Arbitrum's emergency intervention
- Arbitrum Security Council froze 30,766 ETH after KelpDAO exploit
- Intervention secured funds without impacting network state
- Pushback from critics over centralization concerns
Mentioned in this story
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KelpDAO
Ripple CTO Emeritus David Schwartz has defended the Arbitrum Security Council’s recent emergency intervention.
In fact, he has compared it to one of the most famous existential crises in Bitcoin’s early history.
After the recent KelpDAO exploit, the Arbitrum Security Council decided to freeze the 30,766 ETH held by the attacker.
The council was able to secure the funds without impacting the broader network state.
The intervention was immediately met with intense pushback from those who are concerned about centralization.
The concern is that the security council can force changes onto the network without requiring individual node operators to actively download and accept a new software fork.
"The Security council has the power to upgrade the smart contract on the L1, effectively a coercion mechanism that has absolutely nothing to do with decentralisation," Nakamoto argued.
The 2010 value overflow incident
Schwartz, however, does not believe that Arbitrum's actions represent a departure from decentralized principles.
Schwartz pointed to the incident when an attacker was allowed to mint over 184 billion BTC out of thin air (which was known as the “value overflow incident”).
Satoshi Nakamoto and early Bitcoin developers released a new patch, and the community of node operators effectively rewound the blockchain's history. "This is exactly what bitcoin did in response to the overflow incident," Schwartz explained on X. "Node operators disagreed with the view of the shared database that the existing consensus rules were showing them. So they opted to both change those rules and rewind the system's history."
The Arbitrum community was faced with a network state they found illegitimate, and the council acted to rectify it. "Nothing compelled anyone to honor the view of the blockchain the then current consensus rules produced," he noted. "This is how decentralization works."
Q&A
What did David Schwartz say about Arbitrum's emergency intervention?
David Schwartz defended Arbitrum's decision to freeze 30,766 ETH, comparing it to a significant crisis in Bitcoin's history.
What was the KelpDAO exploit and its impact on Arbitrum?
The KelpDAO exploit involved a hack that led to the Arbitrum Security Council freezing funds to secure 30,766 ETH without affecting the network.
Why are people concerned about centralization in Arbitrum's actions?
Critics argue that the emergency intervention by the Arbitrum Security Council raises concerns about centralization and its implications for decentralized governance.
