According to researchers from Stanford University, the concept of blockchain immutability, due to which transactions cannot be reversed after completion, has a serious drawback.
A group of researchers noted that, on the one hand, the immutability of transactions does not allow banks, regulators and other persons to change the distributed ledger. On the other hand, in case of fraud, hacking, or simply an error when sending cryptocurrency, the user does not have any options to return the funds.
“In 2020, about $7.8 billion was stolen, and in 2021 this amount doubled to $14 billion. If there was a way to reverse fraudulent or erroneous transactions, by analogy with traditional finance, then the damage could be significantly reduced,” the researchers said. .
In addition, the ability to reverse transactions would make it easier for law enforcement to recover stolen or fraudulently obtained crypto assets.
“Within a short dispute period, the sender can request a cancellation of the transaction from a decentralized group of judges, which will first freeze the assets and then, after providing the necessary explanations, cancel the transaction,” the researchers explained their proposal.
The crypto community was ambivalent about this proposal. Critics pointed out that the very idea of involving individuals in arbitration destroys the principles of anonymity and undermines the essence of decentralized finance. You might as well go back to databases run by commercial banks.
Moreover, if the proposal is implemented, governments and other regulators will be able to block and cancel any cryptocurrency transactions.
Recall that in 2019, scientists from Stanford University developed a “fully decentralized and confidential payment mechanism” called Zether to anonymize smart contracts on the Ethereum blockchain.
Source: Bits
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