In today’s Exponential Investor…
- How about I just send you £10
- The biggest ‘dollar scam’ of all time
- How crypto will save Twitter
‘If you send me a bitcoin I’ll send you two back.’
If you ever seen anything like this on any social media channel, disregard it.
No one ever in their right mind will take a bitcoin form you, and then send you two back.
For a start, why wouldn’t they just send you one bitcoin if you sent them your public address? Why do they need you to send one to just send it back plus another?
It’s like me saying, send me ten quid and I’ll send you twenty back. Why don’t I just send you ten quid in the first place?
Obviously these sorts of things are scam.
What they are not however, is a ‘bitcoin scam’. The mere fact that the payment method requested does not make these things a ‘bitcoin scam’.
Which is why last week when you saw ‘Twitter hacked with bitcoin scam’ all over the mainstream media last week, they were all wrong.
Twitter was hacked. And more on that in a moment. And yes, this hack requested bitcoin transfers as part of the scam. But this is no bitcoin scam.
And here’s why…
One… billion dollars
According to the BBC,
On the morning of 16 December 2015 Qatar’s ruling family got bad news: 28 members of a royal hunting party had been kidnapped in Iraq.
A list of the hostages was given to Sheikh Mohammed bin Abdulrahman al-Thani, who was about to become Qatar’s foreign minister. He realised that it included two of his own relatives.
Some reports have it that one billion dollars was paid to free the hostages.
Now this was determined to be a kidnapping and ransom. At no point during this ordeal was it referred to as a ‘dollar scam’.
The mere use of dollars as the unit of exchange in this kidnapping/ransom is irrelevant to the underlying crime.
And it’s the same case with the hack on Twitter.
The underlying crime here is the hack on Twitter. The fact that bitcoin was deemed by the hackers to be their chose unit of currency is irrelevant.
Had they decided to ask for fiat money, or stocks, or made some kind of statement from Twitter accounts that would impact the market, would it have been called a ‘stocks scam’? Would it have been called a ‘dollar scam’?
Of course not.
But the good old mainstream will have you believe that bitcoin is a scam, its used for ‘scammy’ purposes. It’s the criminals choice of currency… BEWARE BITCOIN they shout at you.
The irony however is cryptocurrency and decentralised networks could save Twitter.
In fact had Twitter implemented blockchain technology in the right way, it could effectively become hack-proof.
And then it wouldn’t be about the ‘bitcoin scam’ that hit Twitter. It would be, ‘how crypto saved Twitter.’
Single point of failure
Twitter was hacked because of a single point of failure. That means that the hackers were able to exploit admin tools that gave them access to Twitter accounts.
From this they were able to access some of the most popular and followed accounts in the world. This included the famed ‘blue tick’ accounts which is supposed to verify the authenticity of the user to those accounts.
However, this no longer is the case. The ‘blue tick’ is worthless because Twitter’s security cannot be trusted. And it means that every single Twitter user in the world, 330 million of them, are at risk.
This is a fundamental problem with centralised systems and networks. As a user of Twitter you are told to protect your account with a password, two-factor security, all sorts of protection measures.
You think that protects your account. But it doesn’t. That’s because you’re still at the mercy of Twitter’s security. The mercy of Twitter admins and their ability not to be ‘phished’ or corrupted. At the mercy of Twitter’s database and their security of those.
You are at the mercy of Twitter. And when they fail, they fail you. You’re wide open and unshielded because they stuffed up.
This is exactly the same for Facebook, Apple, Google, Netflix, Spotify, Uber… the list goes on. Every one of these companies is at risk of a single point of failure because you are completely reliant on their ability to secure their data.
And far too frequently they fail at it, like Twitter has just failed.
Now this can be avoided in a decentralised, distributed network. A network built on blockchain technology using cryptocurrency can avoid these kinds of attack.
For example, let’s say that you use Twitter as the platform for social media. Except the access to your Twitter account is achieved by linking a private, encrypted digital key to your public Twitter handle.
So my Twitter handle is @samvolkering and if I had an encrypted private key secured in a wallet, which exists in a locked up part of a secure chip in my phone for example, I can access my Twitter account, no problem.
But if someone else wanted to access it, they’d need my private key. Now it’s not impossible to hack me specifically to do that. No system is 100% failsafe. But it would still be very hard and be very targeted. And in doing so they would only get access to my Twitter account.
If they wanted to access hundreds, thousands of Twitter accounts on a decentralised, distributed network, they’d have to repeat that same hack/attack on every single user they wanted to get access to.
Try doing 330 million different attacks as opposed to one attack on a single point of failure.
This is why decentralised, distributed networks can be massively powerful. They can be incredibly secure and can prevent unauthorised access to mass attacks because there’s no single point of failure to the whole network.
This is the power of cryptocurrency and the power of these new networks. The Twitter hack isn’t about a bitcoin scam. It’s really about the power and potential of bitcoin and cryptocurrency to revolutionise the existing, flawed networks we use and are supposed to ‘trust’ today.
When you start to truly see how cryptocurrency works and the impact it has, you start to truly understand its potential. And if we see a transition from centralised, single point of failure control to decentralised, distributed systems (social networks are just one example) then I’d expect crypto markets to fly.
If you still aren’t convinced that cryptocurrency and decentralised distributed networks are the future… I’m afraid there just might not be any hope for you left.
I’m fascinated to hear if you’re already on the crypto revolution and have some bitcoin, or another cryptocurrency.
Or if you still haven’t decided to get involved in crypto, I’d love to know why not?
Let me know about your crypto journey so far, your crypto journey you’re about to start, or perhaps your crypto journey that you’ve decided you’ll never take!
Let me know via firstname.lastname@example.org. I look forward to hearing from you.
Editor, Exponential Investor