More than $100m in cryptocurrency stolen from blockchain biz Blockchain venture Harmony offers bridge services for transferring crypto coins across different blockchains, but something has gone badly wrong. The Horizon Ethereum Bridge, one of the firm's ostensibly secure bridges, was compromised on Thursday, resulting in the loss of 85,867 ETH tokens optimistically worth more than $100 …
To be fair, nobody sensible is claiming that. Cryptocurrencies are really quite badly named, in that the only time they are really used as a currency, it's more like a barter system (a bit like "buying" something with bearer bonds) and there is someone at the other end who is either going to exchange them for actual currency (e.g. by "trading" them on an exchange) or who is going to pass them on to another in another "purchase".
There are real obstacles to using them like real currency, the most obvious one with Bitcoin, beyond the elephant in the room of price instablity, is the need for transactions to have a certain number of confirmations in the blockchain to be treated as completed. The Bitcoin blockchain, by design, has an average block time of ten minutes, and six confirmations are normally the level at which a transaction is considered to be "confirmed", so in order to use them like you'd use currency, you'd have to be sitting around for an hour to make sure the "money" has gone through before handing over the goods.
What most cryptocurrencies are more akin to, is a very volatile kind of investment, although it has to be said, that even after the most recent "crash", if you'd bought some Bitcoin at the most recent high, it'd still be performing better than those Deliveroo shares I foolishly bought.
The strengths of "crypto" if they can be said to have any, are "non-fungibility", which roughly translates as "can't be forged", a decentralised ledger (so you can't "cook the books") and anonymity. The first of these is pretty moot, if they can be stolen, in this case, the weakness being a vulnerability in the "in-transit" part, a bit like nicking the gold in The Italian Job. Also, the second of these can actually defat the third, in that forensic analysis of the blockchain ledger, there for all to see, allows pretty comprehensive de-anonymisation of wallet ownership, useful to law enforcement, but not so much to those concerned with privacy. The problem being, of course, that the criminal element are attracted to its use exactly for this purpose. Ironically, they'd be better dealing off in USD, in non-sequential unmarked used mid-denomination notes, which is why that is still the preferred currency of crims...
... The Register is, in general terms, a bit like a trade magazine mostly read by people in the trade. At least that is what I think.
Nicking $100 million of something would be front page news if it was in the "real world". I barely watch or read the "normal" news any more as I grew fed up with the daily covid blandishments and pronouncements. Did this $100 million even make the normal news?
If it was a Brinks-Mat / Hatton-Garden replay where actual bags of cash or bullion was stolen in a dramatic way then, yes, I would expect it to make the front pages in at least the country where the theft occurred.
But this is some weird technical thing about funny money which is held on some kind of chain thingy to most people and it is difficult to tie to a specific location and definite time, especially as everyone seems to be using pseudonyms. So no, meeja not picking it up. To slow. No car chases.
Well, yes and no. If you "valued" it at $100M using the Ether price six months ago, you'd definitely be looking at much less (somewhere in the region of $30M at today's price). If you made that "valuation" a week ago, you'd currently be looking at around $115M, because the "value" has rebounded a bit.
The sheer nature of that amount of volatility means that it deeply unsuitable as any sort of serious investment vehicle. Of course, if you were to "buy the dip" right now, you could be looking at 10x your investment in two years time, or, just as likely, 10% of it. It's probably fairly unlikely to fall to zero, but you have the additional problem that, if you have a reasonably large investment in to, and want to get out, fast, when the "market" falls, then you'll be hard-pressed to find a buyer for the whole amount, and you'll probably contribute to pushing the price down even further.
Then again, there are "serious" stocks and shares that exactly the same considerations apply to. Part of the problem with "markets" is that the value of a thing gets decoupled from its nature, and people are only trading on the numbers, without caring about what they are buying or selling (there is a possibly apocryphal story somewhere of someone trading in fossil fuels finding themselves taking delivery of a large number of barges of coal to the London Docklands because they forgot to tick the box saying they didn't actually want physical delivery of the "asset" they had bought, but had been unable to find a buyer for, to turn a profit).
"Nicking $100 million of something would be front page news if it was in the "real world". "
'Real world' news needs to be in soundbites of 30 seconds or less so as to be digestible by Joe & Sharon Average in between their daily COVID and "Live in fear" reminders by the talking heads. Anything remotely complicated or needing more explanation than 'somebody bad dun something bad and here's a picture of the loot' won't make the front page.
Watch Idiocracy. It was satire when it was released in 2006; it's now terrifyingly close to the truth.
Some people paid in some part of that money, but how much those people actually paid in is difficult to know. If you buy $100 at $1 of some funny money and then the price in $ rises to $2 then you've still only paid in $100; yet if (when) someone steals it you've "lost" $200 worth of the funny money.
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