Rollbacks in blockchain explained
In blockchain, a rollback refers to reversing its history to counter a disastrous event, such as big hacks threatening to disrupt the ecosystem, the discovery of critical protocol bugs or centralization risks of network integrity.
The Bybit hack, which resulted in a staggering $1.46 billion loss, has triggered a demand regarding a rollback of affected transactions on Ethereum.
In a Feb. 22 X Spaces, Bybit CEO Ben Zhou adopted a more neutral position when asked about supporting an Ethereum rollback.
“I’m not sure it should be a decision made by one person. In line with the spirit of blockchain, it might be better to have a voting process to determine what the community wants, but I’m uncertain,” Zhou said.
Still, Jan3 CEO Samson Mow commented in a Feb. 22 X post: “I fully support rolling back Ethereum’s chain (again) so the stolen ETH is returned to Bybit and also to prevent the North Korean government from using those funds to finance their nuclear weapons program.”
Similarly, BitMEX co-founder Arthur Hayes tagged Ethereum founder Vitalik Buterin, urging him to “advocate for rolling back the chain,” in a Feb. 22 X post.
While viewed as a last resort, this idea challenges the fundamental principles of blockchain — immutability and decentralization.
A rollback is theoretically possible but highly debatable, particularly on a large blockchain like Ethereum. Ethereum has evolved into an expansive ecosystem with several layer-2 solutions and numerous decentralized finance (DeFi) applications.
A rollback in blockchain can be achieved through a soft fork or hard fork, both of which involve modifying the blockchain’s history.
- Soft fork: A less drastic change that is backward-compatible, meaning the updated version is still valid on the old chain. It could be implemented without requiring a total consensus.
- Hard fork: A more drastic change where the blockchain splits into two, with the new version being incompatible with the previous one. This requires widespread consensus and could lead to a permanent division in the network.
In both cases, reversing transactions on such a significant ecosystem would require overwhelming consensus from the network participants, making it an extremely complex and controversial decision with potentially unexpected and equally calamitous fallouts.
In addition to hard and soft forks, a blockchain patch is another method of rollback. It involves a specific fix for an issue where the blockchain’s history is “rolled back” to a previous state, effectively reversing certain transactions or events.
Did you know? Hackers stole 120,000 BTC in the 2016 Bitfinex hack. If you calculate the value of the stolen BTC in 2025, it would be more than $8 billion.
Bybit hack explained
On Feb. 21, 2025, hackers stole around $1.46 billion in crypto from Bybit. Hackers used specifically developed malware to trick Bybit’s multisignature system into approving fraudulent transactions and sending funds to the attackers.
The theft was linked to North Korea’s Lazarus Group, infamous for breaching crypto platforms and laundering stolen assets through complex blockchain transactions.
The hackers converted stolen tokens like stETH and cmETH into Ether (ETH) on decentralized exchanges (DEXs). They then swapped large amounts of ETH for Bitcoin (BTC) and Dai (DAI). The attack was executed by tricking Bybit executives with a fake interface. The crypto exchange has launched a recovery bounty, offering up to 10% of recovered funds to anyone who helps retrieve the stolen crypto.
The attackers used phishing tactics to compromise Bybit’s cold wallet signers, replacing the multisignature contract with a malicious one. The “blind signature” tactics made it hard for the users to detect they were interacting with a fake interface while doing a routine transfer from Bybit’s cold wallet to a hot wallet.
It enabled the transfer ownership action that passed control of the entire multisignature process to the hackers. As a result, the hackers redirected about 401,000 ETH, worth nearly $1.46 billion, to their own addresses.
Roadblocks in rolling back Ethereum transactions
Built-in immutability is a significant hindrance to reversing Ethereum transactions. This key feature ensures records cannot be changed at the will of any particular authority, which conflicts with calls for rollbacks after events like the Bybit hack.
Reversing transactions would also erode user trust, disrupt the DeFi ecosystem and weaken Ethereum’s credibility. Moreover, Ethereum has grown into a vast network since its inception, making a rollback technically infeasible.
Let’s understand the roadblocks in a bit more detail:
Immutable design
Immutability is a…
cointelegraph.com