David Schwartz Defends Arbitrum Freeze, Cites Bitcoin’s 2010 Rollback

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David Schwartz defends Arbitrum freeze by citing <a href="https://jpyxx.com/btc-usd/">Bitcoin</a>’s 2010 rollback

David Schwartz, the Chief Technology Officer of Ripple, has publicly supported Arbitrum’s choice to temporarily lock up over 30,000 ETH that was involved in the recent KelpDAO hack.

Summary

  • David Schwartz said Arbitrum’s emergency ETH freeze followed the same logic as Bitcoin’s 2010 rollback.
  • The freeze secured 30,766 ETH tied to the KelpDAO exploit without changing Arbitrum’s broader network state.
  • Critics said the Security Council’s intervention raised fresh concerns about centralization and emergency governance powers.

He explained that this situation is similar to how Bitcoin handled a problem in 2010 where someone exploited a bug to create a huge number of new coins. Back then, the Bitcoin network agreed to undo those transactions.

Following a security breach, Arbitrum’s governing body stepped in and froze approximately 30,766 ETH belonging to the hacker. While this protected the funds without disrupting the network, it sparked a new discussion about the balance between decentralization and having the ability to quickly respond to emergencies.

Schwartz links Arbitrum action to Bitcoin history

As a researcher following the situation, I understand some concerns about Arbitrum’s actions potentially moving away from core decentralized ideals. However, I believe it’s important to remember that communities always have the power to disagree with, and even actively correct, a network state they deem illegitimate. It’s a crucial part of how these systems are designed to function.

He highlighted a problem Bitcoin had in 2010 where a bug allowed someone to create over 184 billion extra bitcoins. The creators of Bitcoin, Satoshi Nakamoto and other early developers, quickly released a fix. Once network operators installed the update, the blockchain was corrected to remove the extra bitcoins.

In a message on X (formerly Twitter), Schwartz explained that this situation mirrors how Bitcoin handled a previous issue. He noted that during that earlier incident, those running the Bitcoin network refused to accept the existing data and instead decided to modify the underlying rules.

Schwartz explained that users weren’t required to stick with the previous version of the blockchain. He noted that the situation demonstrated how decentralized networks function when people disagree with the results of a consensus.

Arbitrum freeze drew criticism over centralization

Following the KelpDAO hack, the Arbitrum Security Council swiftly froze 30,766 ETH. Many in the community praised this action, saying it helped protect the stolen funds and prevented further harm to the overall system.

Some experts expressed worry that this change allows the council to update smart contracts directly on Ethereum‘s main network without needing everyone running the software to update it. This raised questions about how truly decentralized the network still is, as it gives the council significant control.

According to one critic, known as Nakamoto in the report, the Security Council’s ability to modify the core smart contract undermines decentralization, acting as a form of forced control.

The main concern is whether giving a small group emergency control aligns with the idea of a decentralized blockchain. This question often comes up after significant security breaches across different blockchain networks.

KelpDAO exploit pushed governance questions back into focus

The recent KelpDAO hack sparked a debate about how blockchain networks should handle funds that are quickly transferred between different chains. In response, Arbitrum’s governing council immediately froze the affected Ethereum without going through a full voting process.

According to Schwartz, the Arbitrum community believed the network was in an unacceptable state, and the council took steps to fix it. He explained this was a decision *by* the community, not a move away from decentralization.

His argument framed Arbitrum’s choice as part of a larger discussion within the crypto world. Some believe it’s okay to step in and recover lost funds during emergencies, while others worry giving that power undermines the very idea of cryptocurrency being decentralized and controlled by users, not a central authority.

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2026-04-22 11:40