In a post-mortem issued shortly after it lifted the freeze on bitcoin withdrawals, Binance has identified the “repairing of several minor hardware failures on wallet consolidation” as the incident that ultimately forced it to pause withdrawals. To fix the problem and to stop this from recurring, Binance said it changed the logic “to only take successful UTXO from consolidation transactions or successful withdrawal transactions.”
Minimal Hardware Failures
Binance has said bitcoin withdrawals on its Bitcoin network have resumed just hours after “a stuck on-chain transaction” forced the exchange to freeze withdrawals for about three hours. According to a Twitter thread in which it seeks to reassure users, the exchange claimed that users’ deposits were unaffected. The exchange stated that customers had the option of withdrawing via another network during down periods.
The following is a description of the product: post-mortem of the events that forced the exchange to halt withdrawals, Binance claimed that the “repairing several minor hardware failures on wallet consolidation nodes” on June 13, had caused the “earlier transactions that were pending to be broadcast to the network after the nodes were repaired.”
The exchange explained that it was the transactions with low gas fees, which led to transactions becoming stuck. This was explained by the exchange
These pending consolidation transactions had a low gas fee, which resulted in the later withdrawal transactions – which were pointing to the pending consolidation UTXO – getting stuck and not able to be processed successfully.
Therefore, to fix this and prevent this from recurring, Binance said it had to “change the logic to only take successful UTXO from consolidation transactions or successful withdrawal transactions.” Following this change, withdrawals on the bitcoin network have resumed, the exchange said.
P2P vs Centralized Finance
Ray Youssef, CEO of peer-to-peer exchange platform Paxful has angered by Binance’s decision to stop withdrawals. Binance is one of the most centralized cryptocurrency exchanges in the world. His June 13th statement. tweetYoussef took this opportunity to promote the advantages of using a P2P portal.
“While exchanges like Binance have stopped all bitcoin withdrawals Paxful remains open. P2P is built on the honest principles of sound money just like p2p electronic cash ala bitcoin,” Youssef said.
The Paxful CEO ends his tweet by questioning Binance’s decision to “leave all sh*tcoin withdrawals open.”
Reacting to Youssef’s tweet, one Twitter user named Crypto Journal said: “Nice one just what I was telling people yesterday after CZ’s post. Binance is a CEFI-like company. [centralized finance] those guys are buccaneers they don’t care about the little guys. They fear if people start withdrawing they can’t meet up cause most of the bitcoins are on loan.”
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