If you have any exposure at all to crypto, you probably heard of Bybit hack, the biggest to date.
In this heist, $1.5B worth of Ethereum was stolen from the exchange, which led to many people raising the question of wheter an Ethereum rollback was a viable solution to this case.
Before going over that question, let's take a step back and go over blockchain rollbacks.
What is a rollback?
A blockchain rollback means restoring the blockchain to a previous state by revoking confirmed transactions and blocks.
That may sound controversial as we always hear about the "immutable nature of blockchain," but in certain circumstances and conditions, a blockchain rollback is indeed possible.
It's not only possible but there is precedent for it. Both Bitcoin and Ethereum were rolled back before but although I'll not go over technicalities, it's important to it's important to know that those rollbacks happened a long time ago, at a time when the blockchain ecosystem was completely different.
Why a new Ethereum rollback is extremely unlikely
Although technically feasible, a rollback on Ethereum at this point is very unlikely to happen. As I mentioned before, the context in which the Bitcoin rollback took place completely differed. One of the things that made it possible to happen was Bitcoin's limited adoption at the time.
We are talking about more than a decade ago, a time when the Bitcoin user base was a fraction of what it is today.
The blockchain ecosystem as we know it today is infinitely more complex. DeFi and bridges to other chains promoted a level of interconnectivity that we could not have imagined before.
This level of complexity brings way too many ripple effects to a theoretical rollback on the chain. Not to mention that these changes could have an impact even outside of the Ethereum blockchain due to offchain connections such as exchange sales and RWA redemptions. Those type of transactions "live" both on the blockchain and out of it, in the real world, and it's simply not possible to revert the offchain half of them with a rollback.
Moreover, the hack in question was not a result of a problem with the Ethereum protocol itself, not even with the multisig application used by the exchange. It was caused by a misleading transaction that led the user to think they were doing one thing while it was actually doing something else.
That's unethical, for sure, even criminal, one may say but, from the perspective of the protocol, it was a perfectly valid transaction that did not break any rules.
Final thoughts
Rollbacks are technical interventions that can restore a blockchain to a previous state by revoking previously confirmed transactions. While feasibly possible, there are many consequences that must be considered before a rollback is even considered.
In the case of the recent Bybit hack, the terms in which the transaction that led to the theft happened and, more importantly, the highly complex and interconnected state of the blockchain ecosystem that we have today make a rollback highly unlikely due to the many ripple effects it would bring.