Hmm, an exploit caused the blockchain loss of over $5.2 million a few hours ago, August 2nd... Wow, this crypto is now worthless, I guess that is a huge loss for those looking to invest. I still think crypto hype is too much, the state is too volatile to invest in... Even if I had a bit of money, I don't think I'll ever invest in something like that! Link: Hot wallets on Solana blockchain drained of over $5.2 million in a matter of hours (msn.com)
It was an exploit in a third party wallet popular among those holding Solana, not Solana itself, although I'll agree that's not much comfort to those holding it.
I'm just wondering about blockchain - the technology itself. With this kind of thing going on, how much is IT worth?
Well, here's one closer - yesterday. $200 million gone in a blockchain bridge heist. I realize the bridge isn't the blockchain itself - but it's pretty firmly attached. https://www.cnbc.com/2022/08/02/hackers-drain-nearly-200-million-from-crypto-startup-nomad.html A chain is only as strong as its weakest link. Maybe this applies to blockchains (and their bridges) as well.
From the Solana article: "While the root cause of the exploit still hasn’t been deduced, many, including Solana co-founder Anatoly Yakovenko, are pointing to an iOS supply chain attack." Does that mean Apple technology - or a successful compromise of it - might somehow be at the bottom of this? Just asking...
This is like old times. The Bank can keep good records but they can't stop a holdup of the Wells Fargo Stage Coach, Jesse James and co. pulling a train robbery, or a couple of bad hombres with six-guns moseying into the Tombstone AZ branch... Plus there's no FDIC yet to protect the customers... Looks very bad for people running the crypto business. It makes bad guys look smarter than good guys. Maybe they are. I'm not going to test my theory.
When I was briefly interested in bitcoin (back when bitcoins were literally fractions of a cent), BTC was stored in an encrypted wallet on one's local machine. Can people still do that, or has the infrastructure changed so that you can't store bitcoin offline?
Yes - people can. (I just looked it up.) It's said to be one of the safest ways. So why doesn't every bitcoin holder do that? https://www.investopedia.com/news/bitcoin-safe-storage-cold-wallet/#
One's private key is basically just a really, really big number. You can let someone else store it for you (like Coinbase), which is popularly considered unwise. You can store it on a "hot wallet", i.e., one that's connected to the Internet, like the Solana victims we're talking about here. You can store it on a cold wallet, i.e., a device that's not connected to the Internet. You don't even necessarily need a device, since you can even write it down somewhere and just hide it somewhere ("paper wallet"). This hasn't changed, and won't, because it basically can't.
Based on what we've seen in heists, crypto technology is like banking in the Wild West of the 1800s. A lot of folks hid their money at home then. Thieves would sometimes find out and target them, back then. They still do. But the bad guys always knew for sure there was more money to be taken from banks. As a later robber, John Dillinger said, when he was asked why he robbed banks, "because that's where the money is." "Plus ça change, plus c'est la même chose" - Jean-Baptiste Alphonse Karr, 1849
Islamic Finance folks have a few differing views, but Muslims can now at least get their feet wet in crypto without compromising their faith: https://alamisharia.co.id/institute/en/learn/cryptocurrency-menurut-islam As some here know, I like (and adopt) the Islamic approach to money - even though I'm an Atheist. But where crypto is concerned - I'll just leave it alone. There's no fatwa that says I have to use it.
Yes, it is. And I think, in this case at least, that "size doesn't matter." If "they" can steal small numbers, "they" can steal big ones. Don't give 'em the chance.
