Bybit's Historic $1.4B Hack Makes the Case Why iEthereum Has the Best of Both Worlds

The world of cryptocurrency is no stranger to its fair share of hacking incidents. However, few have been as impactful as the recent attack on Bybit, one of the most prominent cryptocurrency exchanges. In February 2025, hackers infiltrated Bybit's cold storage wallet, making off with an estimated $1.5 billion in digital assets. The attack, which has since been dubbed the largest crypto heist in history, raised significant concerns within the crypto community, particularly for Ethereum (ETH), the blockchain on which Bybit relies for much of its infrastructure. This situation presents a crucial challenge for Ethereum's future: Does it uphold its principles of decentralization and immutability, or does it make an exception in response to this extraordinary theft?

Disclaimer: In this article, we will refer to the Bybit incident as a "hack," aligning with how it has been described by news sources. However, given the unpredictable and often opaque nature of the crypto industry—frequently compared to the wild west—it is important to acknowledge that what appears to be a hack could, in some cases, be an inside job or a managerial mistake. That said, how, who, or what caused the incident is not the focus of this article. Instead, we will concentrate on the choices and actions taken in response to the event—whether it was truly a hack, an internal error, or theft. For the sake of clarity and consistency, we will use the term "hack" throughout this article.

In this blog, we will explore the Bybit hack, the debate surrounding Ethereum's governance and decision-making, and why iEthereum may offer the best of both worlds in this critical situation. Let’s break it down.

The Bybit Hack: A History-Making Crypto Heist

On February 21, 2025, it was discovered that Bybit, a major crypto exchange, had fallen victim to a massive cyberattack. The attackers breached Bybit’s cold wallet, an offline storage solution that is widely considered the most secure method for storing digital assets. They made off with over $1.4 billion worth of Ether (ETH), a sum that quickly sent shockwaves throughout the crypto world.

Blockchain analysts soon traced the funds to multiple wallets, linking the hack to the Lazarus Group, a notorious North Korean state-sponsored hacking group with a long history of targeting cryptocurrency exchanges. The stolen Ether was quickly liquidated across decentralized exchanges, further complicating the matter.

Despite the magnitude of the hack, Bybit CEO Ben Zhou reassured customers that other cold wallets remained secure and that the exchange's operations would continue unaffected. The exchange was able to secure a bridge loan from undisclosed partners to stabilize operations and ensure the hack's effects were contained.

Still, the hack was a wake-up call to the crypto industry. Large-scale attacks like this highlight the vulnerabilities inherent in centralized exchanges, even those with robust security measures. Yet, it also raised questions about Ethereum’s role in this crisis—especially when it became known that the hackers, who now control over $1 billion in stolen ETH, are among the largest ETH holders in the world.

The Role of Ethereum: A Decision to Make

In the wake of the Bybit hack, Ethereum faces a significant dilemma. Should the network take action to invalidate the stolen ETH and reverse the damage done to Bybit? Should it roll back the chain, as it did in 2016 when the DAO hack took place? The situation feels eerily familiar.

In 2016, Ethereum faced a similar crisis when an attacker exploited a vulnerability in The DAO, an early decentralized autonomous organization, to steal $60 million worth of Ether. The Ethereum community responded by conducting a hard fork, essentially rolling back the blockchain to a state prior to the attack, in order to return the stolen funds to their rightful owners. This controversial move split the Ethereum network into two chains—Ethereum and Ethereum Classic—and sparked an ongoing debate about the role of immutability in blockchain technology.

Fast forward to today, and the debate is being reignited. The suggestion has been raised, notably by Arthur Hayes, co-founder of BitMEX, that Ethereum should roll back the network to reverse the effects of the Bybit hack. Hayes, a significant Ether holder, posited that since Ethereum had already made an exception for immutability in the case of the DAO hack, there should be no issue in doing the same again for this $1.4 billion breach.

However, the idea of rolling back the Ethereum blockchain has faced intense criticism from the Ethereum community. The network’s decentralized governance model is predicated on the principle of immutability—once a transaction is added to the blockchain, it cannot be changed. However, there is nuance. Just because a network is labeled "decentralized" doesn't mean that its validators—who uphold the consensus mechanism—cannot take a vote, and that collective decision can effectively become a centralized voice. Rolling back the chain to reverse the hack would undermine this principle, potentially eroding confidence in Ethereum as a secure and trustworthy platform.

Many argue that a rollback today would be far more complex than the one executed in 2016. Ethereum’s network is now vastly more interconnected, with Layer 2 solutions, bridges to other blockchains, and stablecoins all built on top of it. A rollback could create far-reaching consequences, including breaking bridges, destabilizing stablecoins, and disrupting decentralized finance (DeFi) applications.

The core dilemma is this: Should Ethereum preserve the principle of immutability, or should it prioritize democratic decision-making in the face of an unprecedented attack? The community faces an important decision, and one that will shape Ethereum’s future for years to come.

Ethereum’s Decision: Immutability vs. Democratic Consensus

Ethereum operates on a Proof of Stake (PoS) consensus mechanism, which means that decisions about upgrades or protocol changes are made by the network’s stakeholders—those who hold and validate ETH. While Ethereum is often touted as a decentralized platform, the reality is that decisions are ultimately made by the majority of validators and token holders. This makes Ethereum more democratic than purely immutable blockchains, but it also introduces the possibility that network changes could be made to address specific situations, like the Bybit hack.

The question becomes: If the Ethereum community votes to roll back the chain, would that invalidate the network’s claim to decentralization? Some critics, especially Bitcoin maximalists, argue that this would prove Ethereum is not truly decentralized. They point to the fact that 66% of Ethereum’s validators (a supermajority) could vote to make changes, including rolling back the chain, which they believe would undermine Ethereum’s immutability and decentralized ethos. However, it’s important to note that Bitcoin itself is not immune to a similar scenario. A 51% majority of Bitcoin’s mining hash power could also vote to make protocol changes, including rollbacks or upgrades. Thus, the same criticism could be leveled at Bitcoin, highlighting that no blockchain, including Bitcoin, is completely immune to the influence of a majority vote.

This argument overlooks a key point: Ethereum’s decision to prioritize democratic consensus over immutability was already made in 2016. Back then, the community chose to hard fork the chain and reverse the DAO hack, even though it went against the principle of immutability. Since then, Ethereum has evolved, and its governance structure has continued to prioritize democratic decision-making for the foundational layer of the protocol and network over rigid adherence to immutability.

If Ethereum does decide to roll back the chain again in response to the Bybit hack, it will likely result in a contentious decision, with some stakeholders supporting the move and others opposing it. This democratic process allows the network to address situations on a case-by-case basis, rather than adhering to an immutable code that could prove inflexible in the face of major challenges. It is also the nature of a living protocol. This presents dangers and opportunities.

iEthereum: The Best of Both Worlds

While the Ethereum community wrestles with these difficult decisions, there is a solution that offers the best of both worlds: iEthereum.

iEthereum is an ERC-20 token that resides on the Ethereum blockchain, benefiting from Ethereum’s democratic governance model while maintaining the key features of immutability. Unlike Ether, which is subject to the potential decisions of the Ethereum network’s validators, iEthereum is built with an immutable smart contract and a finite supply of 18 million tokens. This ensures that iEthereum’s tokenomics remain untouched, regardless of any changes made to the Ethereum network itself. As long as Ethereum lives on, for better or worse so does iEthereum. This is another reason I speak on the genius of iEthereum. Its almost like the creators knew that governance was going to need to change, update and compromise at a foundational level, but tokenomics and function were essential to keep immutable.

The beauty of iEthereum lies in its ability to operate within the Ethereum ecosystem while remaining immune to the risks of network changes like a rollback. If Ethereum decides to roll back the chain to invalidate the Bybit hack, iEthereum holders would receive a 1:1 equivalent on the new chain that forks. This provides a safeguard for iEthereum users, ensuring that their holdings remain intact no matter what decisions the Ethereum network makes.

With emphasis, iEthereum retains the advantages of operating on a network that is governed through “decentralized” stakeholder compromise; ie democratic consensus. Ethereum’s Proof of Stake mechanism allows for flexibility and adaptability, ensuring that the network can evolve in response to unforeseen circumstances like the Bybit hack. Meanwhile, iEthereum’s immutability ensures that the token’s value proposition remains stable and predictable, even in times of uncertainty. Don’t get me wrong, there are dangers to this. The point that I’m trying to make is that if you are attempting to build an ecosystem that includes various and diverse stakeholders, institutions, nation states, and individuals there is going to need to be some compromise. The Ethereum network chose back in 2016 to reach compromise via a supermajority vote.

With that said, we agree that immutability is important to gain trust and faith. In essence, iEthereum offers a unique combination of security, flexibility, and stability that makes it well-positioned to thrive in the face of Ethereum’s ongoing challenges. By operating within the Ethereum ecosystem, iEthereum can leverage the network’s vast resources and user base, while its immutable nature ensures that its tokenomics remain secure, regardless of what happens on the Ethereum blockchain. The more and more the Ethereum network evolves, the more and more iEthereum becomes genius in nature. It was ahead of its time.

Conclusion

The Bybit hack has put Ethereum to the test, raising important questions about the blockchain’s governance model and its ability to adapt to unforeseen events. While some advocate for a rollback to reverse the hack’s effects, the Ethereum community must grapple with the tension between immutability and democratic consensus. Regardless of the decision to vote or note and the outcome of said vote, Ethereum’s decision-making process highlights the dynamic nature of blockchain governance, and it serves as a reminder that immutability is not always the best solution to every problem.

In this context, iEthereum stands out as a solution that offers the best of both worlds. By leveraging Ethereum’s decentralized and democratized governance while participating in a larger ecosystem while maintaining the security and predictability of an immutable token. iEthereum provides a unique balance that makes it an attractive choice for those who value both flexibility and stability in the world of cryptocurrency. Whether Ethereum chooses to roll back the chain or not, iEthereum offers a safe haven for token holders, ensuring that their investments remain secure, regardless of the network’s decisions.

iEther Way, We See Value!