Stanford proposed to radically change the way cryptocurrencies work

Researchers at Stanford University (USA) have drawn attention to what they consider to be significant drawbacks of the blockchain immutability concept and proposed a radical change in the way cryptocurrencies work.

According to the researchers, the immutability of transactions does not allow banks, regulators, and others to change the distributed Ledger. There is also a big problem for ordinary users — in case of fraud, hacking, or simply a mistake when sending cryptocurrency, investors have no way to get their money back. «In 2020, about $ 7.8 billion was stolen, and in 2021, this amount doubled to $ 14 billion. If there was a way to cancel fraudulent or erroneous transactions, similar to traditional finance, the losses could be significantly reduced,» the researchers believe.

Within a short period of time, the sender could request the reversal of the transaction from a decentralized group of judges, who would first freeze the assets and then, after providing the necessary explanations, reverse the transaction.

It is worth noting that the possibility of canceling transactions would make it easier for law enforcement agencies to recover stolen or fraudulently obtained cryptocurrencies. Currently, the percentage of hackers being held accountable and recovering stolen funds is minimal. That is why the cryptocurrency exchange Binance has launched an educational program for law enforcement officers that will teach them how to find cybercriminals.

As for the Stanford researchers' proposal to allow crypto transactions to be canceled, the cryptocurrency community members had a mixed reaction to this idea. Critics have pointed out that the concept of involving individuals in arbitration destroys the principles of anonymity and undermines the essence of decentralized finance. Moreover, if the proposal is implemented, governments and other regulatory authorities will be able to block and cancel any cryptocurrency transactions.