CZ's sole authority over BNB Smart Chain is a problem

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(Edited)

CZ's sole authority over BNB Smart Chain is a problem.

Direct from the desk of Dane Williams.



While BNB Smart Chain uses a system of validators, they are nothing more than CZ controlled sock puppets - Thus creating a BIG problem.

When it comes to BNB Smart Chain, CZ gets what CZ wants.

BNB Smart Chain coming to a grinding halt at the press of a button following yesterday’s exploit, shows this to be fact.

But just for a second, consider what CZ having the ability to press a button to halt an entire network really means.

For BNB Smart Chain and the entire goal of permissionless money and freedom of speech.

Screenshot of CZ, the man with sole authority over BNB Smart Chain, taken from the Binance website.

Implications of CZ’s sole control over BNB Smart Chain

Saying the implications are big BNB Smart Chain, would actually be the understatement of the century.

They’re truly massive.

We now know that BNB Smart Chain validators agreed to - So the reality being CZ himself decided to - implement a software update to block the hacker’s address.

While this is socially acceptable in the case of a hacker...

Doesn't this mean that if CZ is pressured by a government - or heaven forbid extorted by terrorists with a gun to his child’s head… for example - that he can do it to ANYBODY'S address?

Or heck, keep the switch off so the entire network comes to a grinding halt?

The answer is of course YES.

Making the entire BNB ecosystem and that $45 billion market cap of the network’s main token, a house of cards waiting to come crashing down.

It doesn't matter that we trust CZ to 'do the right thing' and not screw us over because he's a great guy.

Which by all accounts, I’m sure he is… lolololol!

(If you understand CZ’s role during the Steem hostile takeover, you’ll hopefully get a chuckle out of that.)

The issue is of course that he has the technical capability to do so.

The entire BNB Smart Chain is not a permissionless system and as such, has one glaring vulnerability in CZ and Binance Inc.

Sure it worked out this time because CZ’s control meant he was able to freeze accounts and trap the money from hAcKeRz.

He chose the option to save the greater good.

Cool.

You can't, however, say that the next time he will do the same.

As we see everyday - highlighted by what's happening in the UK financial system right now - if something can go wrong…

Then something WILL go wrong!

While BNB Smart Chain based DeFi platforms like our very own Cub Finance are paying out ridiculous yields, I am happy to take advantage.

Heck, I’d be stupid not to.

But to have anything close to a valuable amount of money tied up in anything BNB ecosystem related long term is the absolute last thing I want to do.

I encourage you to at least consider the ramifications of CZ’s ability to freeze the entire BNB Smart Chain network on your own investment.

Then on what it could mean for the permissionless movement of money and information.

Sound overly dramatic?

It’s not.

When push comes to shove, all that will matter are decentralised, permissionless parallel running systems.

Of which right now there aren't many.

Seriously, try to name them with confidence

Post merge, you can’t even confidently add a PoS Ethereum to the list.

All roads lead to Hive.

Best of probabilities to you.

PS. I need some help.

While you’re here, can you help me fully understand exactly what happened here?

Please jump into the comments and help me work through these questions.

So we know the exploit was on a cross-chain bridge called BSC Token Hub.

My understanding is that this particular bridge allows you to move between the BNB Beacon Chain (BEP2) and the BNB Chain (BEP20 or BSC).

So my questions:

Did the hacker essentially 'trick' the bridge into printing new BNB tokens on BSC, without actually stumping up an equal amount of capital on the other side?

Or… was this a pool of tokens sitting in an account that someone (I take Binance Inc?) owned?

PPS. Now go and read some of the truly great Hive authors who actually make you think.

Not just the same, re-hashed SEO plays you see by so called crypto journalists in the mainstream media.

To start with, I’d highly recommend also checking edicted’s similar take in the back half of his there's been a disturbance in the force post.

(I didn’t plagiarise, I promise!!)

Honestly, I’m just happy that I’m not the only one that thinks along these lines when it comes to the end game for crypto.

Then if you’re really keen, answer gadrian’s questions around how secure Cosmos bridges may or may not be.

So many good and thought provoking minds floating around the Hive blockchain’s social dApps.

Take advantage of them.

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Nice..
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go to this official taki announcement how to get the airdrop CLICK HERE
if it helps please follow me and vote me for witness.

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It is the same narrative with your bank account where they can freeze as soon as you make a small mistake in society.

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But banks don't pretend to be something that they're not.

When you deposit money in a bank account, you are fully aware of the risks and in certain jurisdictions, are backed by government safeguards.

Binance Smart Chain essentially pretends to be a decentralised network with their system of validators.

When the reality is a single man has full control over them and as such, is a single point of failure.

CZ did 'the right thing' this time.

But there's no guarantees he will next time.

This is a MASSIVE risk for anyone with serious money tied up in the BNB ecosystem.

Much higher than in a US-based or in my case, an Australian-based bank.

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I always know my money is in my bank account and save to use if I pay my bills on time. With BNB, it might not be the case.

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Good insights there about BSC. It seems too centralized, much like ETH PoS.

By the way, did you notice this comment below mine by luisucv34? It looks suspicious, the link and it is spam. I saw the same comment exactly on another post now.

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This BSC Token Hub hack was a perfect case study to showcase the centralisation of BNB Smart Chain.

Like you said, Etherum 2.0 with its switch to PoS has centralised the network even more than it already was (with Vitalik... erm, the Ethereum "Foundation's" stake).

I wonder when we'll get Ethereum 2.0's moment of truth...

PS. Thanks for letting me know about the comment.

It's definitely a phishing scam.

All we can do is downvote the account until their rep hit the front-end's threshold for hiding comments.

But that sucks too, because it looks like just a regular guy who has had his keys compromised and will now get his account destroyed.

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WARNING - The message you received from @luisucv34 is a CONFIRMED SCAM!

DO NOT FOLLOW any instruction and DO NOT CLICK on any link in the comment!

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It's hard to explain the risks of centralization to people who haven't gone through what we did with the takeover of the former chain and be taken seriously. Many will think we are paranoid when we keep pushing for a decentralized layer-one chain (at least). Until it happens to them. @jongolson explained well how he didn't trust people who told him Paypal was closing down accounts for no reason (thought they must've done something) until it happened to him and his business.

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Yep, jongo's Paypal story on the Cryptomaniacs pod was a great example that even normies can understand!

Let me just reiterate that I'm not against centralisation per se.

Centralised and decentralised networks can and always will coexist, affording users the advantages that both parallels offer.

Heck, one of centralisation's biggest advantages was shown here.

I mean I'm certainly not cheering for hackers - It's a good thing that this clown didn't get all of the money out.

Suck shit.

But my issue is that we don't know where CZ's line for centralised intervention get drawn.

And the fact that CZ gets to draw that line at all!

If you've got money tied up in the BNB Smart Chain ecosystem, you need to be aware of what could happen.

And if these risks concern you, then your search for a decentralised alternative will likely lead you to Hive.

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Let me just reiterate that I'm not against centralisation per se.

I am not either. It is what most apps will be and many of the layer twos. Base layers should be light and decentralized though if censorship and control are concerns, and they are (or should be), at the societal level, but not in the corporate or government world.

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its the same history with all centralized shit.

But everything needs a little bit of centralization don't you think?

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I'm 100% with you on this, BSC = VERY high risk because of that centralisation.

I'm actually going to pull some of my Cub funds as a result, not sure where I'm gonna put them however?!?

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We all just have to now weigh up our personal risk:reward for being in BNB.

Do you really think the risk of CZ's kids being kidnapped and him shutting down the entire network outweighs the 35% you can earn on stables? ;)

Probably not ;)

I wouldn't have my entire net worth in the BNB Smart Chain ecosystem.

But I'm certainly not dumping everything.

For me, it's not so much about this particular issue, but what can and will happen in the future.

Say when governments get their shit together and try to make a concerted effort to regulate crypto networks.

There will come a time when tax revenues are going to dwindle because of crypto.

And when shit starts hitting the fan as a result, the doors of people in control of the networks are going to be knocked on.

Which networks are decentralised enough that the network will keep functioning if a few key men are compromised?

BSC? - Nope.

Ethereum? - Nope.

Hive? - More likely than the other 2.

But yeah, for me, this stuff is far enough away that my couple of K in Cub doesn't mean shit ;)

Don't make a hasty decision!

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It's nice that people get to see in live action what everyone was talking about all this time. One man, one button, and it's game over for you.

BTW from what I saw on Twitter the hacker was able to generate false Merkle trees which some claimed was impossible before this hack.

This seems to be a nice summary of the incident if you want to go into technical stuff.

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The issue of hacking and crypto theft is slowly becoming a norm which could impede crypto mass adoption. I think this should be a wake-up call to developers and ecosystem builders to ensure that potential loopholes that could give rise to hacking incidents and exploitation are covered.

More so, crypto users should practice safety measures to safeguard their assets from being stolen.

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