In second largest DeFi hack, Blockchain Bridge loses $320M Ether
blockworks.co
blockworks.co
*edit: another good thread https://twitter.com/samczsun/status/1489044939732406275
> A commit was made ~9 hours ago replacing usage of load_instruction_at with load_instruction_at_checked, which actually confirms that the program being executed is the system program. It's interesting that this commit was made ~9 hours ago and the exploit happened a few hours after that. Possible that an attacker was keeping an eye on the repository and looking out for suspicious commits. Could be that the Wormhole team spotted the bug, patched it, but the attacker got to it before the patch could be rolled out. Super important to keep these sort of patches lowkey and to try to stuff them into larger commits.
> It looks like maybe Wormhole tried to do this by including the change in a much larger and unassuming commit called "Update Solana to 1.9.4". Not sure exactly what happened here, but a clear lesson to try to deploy before making any patch details public, if you can afford to do that. Of course this ends up being at odds with Web3 ideals, so not always clear how to best handle these sort of things.
One thing that would be healthy for the larger ecosystem would be for chains to build in regular "maintenance windows" where trades are halted by contract, at which time sensitive security patches can be rolled out to the codebase and then to the network by the maintaining team. Of course, this requires a lot of foresight. But the alternative is something like this.
Also - why would you ever set up a system where the majority of its assets can be drained by a single transaction, whether legitimate or not? Just because it's not centralized doesn't mean every transaction is made equal; one could require timeout periods for transactions above a certain amount, or any size of transactions could trigger a halt once a certain amount has been bled in aggregate, that requires supermajority consensus to "unlock" the chain. That this wasn't built in, in an ecosystem where hacking is rampant, by a team focused on creating a cross-chain transmission utility, is surprising, to say the least.
There are far, far worse things than a halt on trading. There are many domains where unsupervised 100% uptime on systems with access to a substantial portion of an organization's assets is ideal; finance, whether centralized or decentralized, is rarely one of them.
What do you mean?
At the moment the transfer fee for Bitcoin/Eth is about $1.80/$4, so if you are buying a $5 coffee it’s not really cost effective to do that on chain.
The main issue that drives up cost is that Bitcoin has a scalability problem for transactions, particularly as the market cap/difficulty has gone up.
This is why the lightning network was introduced - although that comes with its own drawbacks compared to “pure” crypto.
What’s the ideal scenario here? Transactions on chain eventually become free and then we truly have a useful distributed currency?
But frankly that’s besides the point. There are very few physical transactions in the “cash” world. Crypto can become very successful and never touch those transactions if it can work to standardize & disintermediate the electronic movement of money it could be a massive change.
I don’t know if that will happen and it’s not a goal of the crypto diehards I’ve met, but that’s a path to success that allows for fees along the way.
Fair point. But there are still many more informal cash transactions that don't have that issue, but maybe that's not what cryptocurrency will solve. That's fair.
> But frankly that’s besides the point. There are very few physical transactions in the “cash” world. Crypto can become very successful and never touch those transactions if it can work to standardize & disintermediate the electronic movement of money it could be a massive change.
Definitely agree traditional electronic money transfer today has many issues. But I don't yet understand why cryptocurrency is the necessary solution. Sure it's a solution, but surely it's possible to fix the issues without cryptocurrency.
I think I understand the core principle and appeal of crytpocurrency as a decentralized currency, underground currency among those wishing to avoid traditional financial institutions. But everywhere I look I see cryptocurrency turning into traditional banking and I don't really understand the overall benefit. It seems the few benefits it does have over traditional banking (speed, ease of transfer, univeral currency) are outweighed by the drawbacks (power hungry, surprisingly insecure, easy to simply lose everything you have with no recourse).
That depends on which blockchain you're fully settling on. There's more than one, Ethereum != "the blockchain".
Have I missed some Turing Award discoveries while I was away?
Yes. ZK Rollups - https://polynya.medium.com/conjecture-how-far-can-rollups-da...
If you don't understand this post he has many more explaining the technologies behind it.
That's not necessarily a problem. Slow is ok if it's highly secure, reliable, and inexpensive relative to the amounts being moved or compared to other alternatives.
Where do you hear that? One of the big criticisms of the biggest cryptocurrencies as currencies is that transactions are glacially slow for most practical uses (small transactions). Improving on that seems to be the main selling point of Solana.
given enough time the entire crypto space will have reinvented every regulation they tried to get rid of and understood why they existed in the first place
Some googling found this article on the origin of the phrase "Chesterton's fence".
And the hilarious thing is that they see the absence of this regulation as a feature and don't even recognize just to what extent they are reinventing the wheel.
My favorite example is kleros.io, a "decentralized arbitration service". There's an app "Kleros Court". Can't wait for the "Kleros Supreme Court" version, for appeal processes and such.
Just like modern-day web development!
Right, but they have to get through the robber baron and feudalism phases first.
"Hey, grandma, run this command and press enter and I'll send you the Fountain of Youth™ creme tomorrow."
At least you kind-of-sort-of have a chance at reverting a transaction.
Heck, my bank completely blocks my transactions over a certain limit (I need to ask for temporary limit increases through a separate process) and frequently delays transactions larger than another limit and they call me to verify that I want to do them.
Sure, blockchains could do the same, through intermediaries, but then... they've reinvented banks.
You can build in things that limit velocity of transactions, send limits etc in the smart contract it's self, no need for it to be at the chain layer, it's just that many of the largest protocols haven't done that (also you either enable some form of DoS or you are vulnerable to sybil attacks)
It's a dark forest. Many predators who are smarter, faster and better connected than you are silently watching, ready to exploit your mistakes and ignorance for their profit.
Dark Forest -> https://www.paradigm.xyz/2020/08/ethereum-is-a-dark-forest
His super-devs may not be so clued up after all
Easier said than done. This is obviously vulnerable to sybil attack- the attacker just make a lot of different transactions. You could build in a circuit breaker that would slow down transactions to only allow a certain rate of increase in total dollar volume going through the bridge. Hopefully this would slow the attacker down enough.
Now you're basically trying to devise a heuristic of what every single attack might look like in terms of transaction volume increase. If you're wrong, the bridge will freeze right when a lot of people want to use it. Plus, you also need to build a price oracle now.
All of this is possible, but maybe it's better to spend that effort on just making sure the code is secure in the first place.
The parent commenter is referencing several fields:
> Sybil attack: https://www.sciencedirect.com/topics/computer-science/sybil-....
This is a type of peer-to-peer strategic attack. So you could postulate that this broadly falls under the category of "common p2p network attacks and vulnerabilities". Google that!
> Circuit breaker: https://en.wikipedia.org/wiki/Circuit_breaker_design_pattern
This is a type of software pattern for making sure a signal (usually bad) doesn't keep recurring and its blast radius is contained.
> Now you're basically trying to devise a heuristic of what every single attack might look like in terms of transaction volume increase. If you're wrong, the bridge will freeze right when a lot of people want to use it. Plus, you also need to build a price oracle now.
This is blockchain specific, but you can definitely deep dive into how blockchains work to get to a point where you understand the concept of a "bridge", "price oracle", etc.
All this said, some people are more breadth-first-search learners, so, if you find yourself in a situation where this is overwhelming but you still want to know, you can always start teaching yourself fundamentals that lead to these areas. I'm roughly breaking down the stack for you here:
First stack: * intro to programming (and getting deep into programming in general) * understanding the basics of an CRUD database app (client-server systems) * understanding multiple services (microservices and systems architecture) * distributed systems (consensus algos, time drift + vector clocks, etc.) * specialization in understanding the blockchain data structure * specialization in understanding p2p systems and their faults
Circuit breakers based on price/volume/volatility is standard finance tech.
With that said smart-contract programming is (at least for now) an in-demand skill set.
The company I work for is interested in developing that skill set because such people are in short supply. A background in conventional distributed systems is very helpful, but anyone with a solid grounding in CS fundamentals can pick it up. It’s a different execution cost model and it’s an adversarial environment, so one needs to keep their wits about them, but it’s learnable like anything.
If you want to know more: ben@rocinanteresearch.net
* The solidity docs are very good - dry and daunting but not too bad to get through.
* Ethernaut has some great CTFs you can play with.
Also some other books: Mastering Bitcoin Mastering Eth The Sovereign individual
Then i would read the first 10 chapters of the rust book, then dive into substrate.
Is that really that hard though? It does require a price oracle but otherwise it's a pretty easy limit to set.
> If you're wrong, the bridge will freeze right when a lot of people want to use it.
I mean, this stuff should be staying in beta a LOT longer than it is, and in a nice long beta you could be increasing limits gradually.
Because, as always, if you were competent, you would not be working on cryptocurrencies.
That's a bananas philosophy
The new language & platform will likely need to learn the classes of bugs that can crop up through a similarly painful process, although this one was using something that was unknown to be unsafe :shrug:
The call they were using was deprecated and marked unsafe a while ago: https://github.com/solana-labs/solana/blob/7ba57e7a7c87fca96...
They need a new name for these things that better communicates the risk level. Right now calling these "smart contracts" is like calling dynamite a "lovely candle". There's nothing smart about something that lets you screw up this badly.
It boggles my mind that anyone would want to participate in anything like that, let alone believe it's the future of anything. It's like volunteering to live in a hole in the middle of a WWI no-mans-land, when there are nice homes available in town where you don't have to worry about being killed all the time. It's one thing to be forced to live in a dark forest, it's quite another to choose to live in one (as anything other than the apex predator).
I'd even argue that imperative programming is the wrong paradigm for such smart contracts.
That is simply not possible. No-one can think of all edge cases.
As a security researcher, I absolutely assure you, the pattern of "checking signatures by checking that the last instruction executed was, in fact, a correct signature check over the right data with the right results" sets off ALL my alarm bells. This is so backwards I don't even know what to say. Just reading through the linked code I'm getting "this might be exploitable" feelings, and not just the aforementioned bug, other parts of it too.
I can't believe others trust these people with their money. They have no idea what they're doing. They're building a ridiculously overcomplicated system layered upon layers of systems where any single mistake can cost them all the funds with no recourse, and aren't even doing it in ways that make sense. It's insane.
This also ties in with general security hygiene and understanding; you need to know what is trusted, what is untrusted, and how to make them interact. Ideally you don't validate untrusted data; instead you build your system so that is not necessary. Every validation that needs to be performed is one more place where something can go wrong. If you need to validate a signature, you go and validate it; you don't ask the user to do it and then validate that they really did it properly and the validation happened. That's what happened here, as far as I can tell. The extra, avoidable validation went wrong.
This popped into my mind when reading your comment.
One example of this is rent. You can store data in accounts. But if the balance of the account is lower than some amount (that depends on the size of the data), the entire account might disappear. Depending on the amount it might disappear immediately and you would find out, but if it is just below the threshold, the account could survive for years. So in any kind of transfer that involves an account that holds data, you need to be careful to check that its balance does not drop under the threshold. If you forget to check in just one place, your state may disappear.
Another example: program calls take a list of accounts. You need to manually serialize and deserialize your data into accounts. It's like writing a program in C where every function can only take an array of void* as arguments, and it is up to the caller to cast (serialize) all arguments to void* and pass them in the right order, and up to the callee to unpack the array again, cast back the pointers, and check that they are valid before dereferencing ... That's fine for a low-level target if a compiler could generate the tricky code for you. But on Solana it's your responsibility to do it manually, in Rust. Much of Rust's safety is useless here. (There exist eDSLs that alleviate much of this, but if you don't understand the underlying model, it is still easy to make a fatal mistake.)
> It's interesting that this commit was made ~9 hours ago and the exploit happened a few hours after that. Possible that an attacker was keeping an eye on the repository and looking out for suspicious commits.
https://twitter.com/kelvinfichter/status/1489050921938132996
> Could be that the Wormhole team spotted the bug, patched it, but the attacker got to it before the patch could be rolled out. Super important to keep these sort of patches lowkey and to try to stuff them into larger commits.
https://twitter.com/kelvinfichter/status/1489051698329014273
Is this something inherent in the cryptocurrency space? Where monitoring for security patches and exploiting them before they are rolled out results in an instant multi-million dollar payday? Is this a common risk? If so, that seems crazy. Vendors already struggle rolling patches in closed source environments.
Even on Ethereum, with it's mostly immutable contracts/programs, there is a super common pattern of a tiny shim contract that forwards all calls on to another contract that does all the work. By changing a storage variable which changes the contract the shim points to, you can effectively upgrade the code.
But given that humans are prone to making mistakes, when code is fresh and unproven, proxies are a practical way to go. Once you've ironed out all issues, you blow the fuse so that the contract can't be changed anymore.
.. which means that when an undiscovered vulnerability is found all the investors are guaranteed to lose their money.
Yeah this is something that famously happens with software development, you just iron out all the issue and then never have to change anything ever again.
This is false. Many of the most heavily used Ethereum contracts, such as Uniswap, are non-upgradeable.
And that can’t be fixed because it’s immutable?
The nice thing is that engineering isn't usually financially bound so you can use all the toys and hire all the consultants to build really extreme testing environments that most domains won't use. It's also fun to flex tools like TLA+, property based testing tools, fuzzers, etc because it's financially sensible to be as sure as possible that you won't release a bug.
https://threadreaderapp.com/thread/1489044939732406275.html
It's unfortunate that the images don't load in that view, but it's still better than the twitter UI
The issue of paradigm is just how poorly suited EVM is as a smart contract language. It is too hard to manage the complexity of bytecode with memory managed on chain and in contract code. When small errors have huge consequences and there are no second chances, EVM is and should be pointed out to be one of the worst standards Ethereum has brought to crypto.
When it comes to high stakes programming and especially in a space where new programs are written quickly and often, its almost objectively obvious that functional styles with more guard rails is the better choice. Nothing running on chain needs an infinite loop or many other fancy features one typically expects from a programming language - restrictions and readability in smart contract code are more important to computational chains than seat-belts are to automobiles, but the network effect is slowing the space down.
Edit: Some people have pointed out this was an issue with Solana contracts, which run on Rust - so I was wrong to use this as an example for half of my point, but still believe the point stands. Even Rust IMO is not tied down enough for contract code, but the fact that it can happen on Rust which is loads better then EVM for bug catching I think proves the point a bit more if anything.
The incentives are even worse then that.
Participants who aren't active crooks are actively incentivized to not look for vulnerabilities, because the easiest way to make money in this space, but to sell to a bigger fool. The quality of the underlying 'investment' doesn't matter.
Here's an article from today about a million dollar bounty paid out:
https://medium.com/immunefi/notional-double-counting-free-co...
Here's another whitehat save in the last two weeks of 480 million dollars:
https://media.dedaub.com/phantom-functions-and-the-billion-d...
All that money could have gone towards world hunger and climate change. Would that have been a better use of it for marginalized people?
It’s like saying “think of all the ways we could have made the world better if people didn’t invest in Apple.”
These days are the upfront prices we pay for a much bigger financial revolution that would be good for humanity in the long run.
Large projects tend to be pretty good about paying out as promised, and not in weird tokens.
What matters is the order book. How many bid/asks are there on it. The contracts and debts outstanding in it. That's all there is. Everything else. Store of value. Whatever. Doesn't matter. Cryptocurrency is people persuading each other to do things in an organized fashion, believing there will be reciprocation at some later date.
I wish we had someone around who really understood currency at a deep level like F.A Hayek to write about crypto economics in a painfully cerebral careful way that avoids all handwaving. There is something very deep going on here that is entirely new or very old and never quite clearly elucidated.
If your implication is that the only thing backing crypto currencies is an expectation of reciprocation then you are mistaken. The qualities you want to hand waive away, and most importantly (though often trivialized), is the inability to roll back the chain which is a function of "consensus power." Consensus power simply quantifies the cost of rolling back x blocks. Bitcoin currently has the highest cost to roll back blocks and therefore the most assurance.
The history of transactions has no importance to the value currency. A dollar that was stolen is just as valuable as any other because they are bearer bonds (like most currencies).
The whole Immutable thing is just translating the concept of a bearer bond to digital space, nothing to do with its intrinsic value.
People are willing to trade their labour and opportunity cost for entries on this ledger.
This is false. Ethereum has higher block rewards (in $) for over a year now. Bitcoin is the second biggest PoW network by mining expenditure.
Ethereum ($38,451,803.7)
Bitcoin ($34,875,489.84)
Before EIP 1559 fees were much more important. Ethereum has higher rewards since about Q3 2020
edit: even worse, f2pool just multiplies the base reward (2 eth) - ignoring uncle rewards and fees, by the wrong number of blocks (based on 15 sec block time - it's actually 13.2s). Trash calculation.
Bitcoin was rolled back at the cost of sending out emails several times.
This is, however, true regardless. The value of cryptocurrencies are measured in USD, and it is expectations of this future valuation that backs up the current price.
The only way to make it more certain than expectations, would be by some sort of government decree.
I mean, nearly nothing is priced in units of crypto and almost no GDP transactions pass through it…
Sounds like it has parallels to society in general. It is just that society with it’s deeds, titles, government issued promises to pay etc. has been around for a very long time, so has proven itself. But it is all based on faith.
For example borrow 1M tokens in exchange for a piece if paper that says you own some land, with confidence that you can earn more tokens (or get someone to rent the land for tokens) and that the legal system will give you continued access to that land and so on.
you just described options trading
That's the central insight of https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years . If you want a good picture of how money works, it's essential to look beyond the Austrians.
It also shows that the number of tokens isn't limited. It can immediately be doubled with a fork, infinitely.
only the solana side was partially uncollateralized
fascinating hack actually
After years of iteration, Solidity is now the safest smart contract language in existence. All common pitfalls are either well known or have been fixed. There are code analyzers. The problem with EVM isn't security, but the fact its word is 32 byte long which limits computational performance - but not that much really.
Where do you find employees, even $500K/year ones, you would trust not to pick up $300m just sitting there in the open for the taking?
Hey team we need to patch this bug allowing anyone to drain all the funds of our company, get right on it while I browse Taycan options to match my wristwatch color.
Why would anyone want to put their life savings into that situation?
As with any crime, you rely on the risk (and potential punishment) being higher than the reward. In this case, because it's based on blockchains that are public, immutable and very easy to trace, it'll be hard to impossible for the one doing the drain to actually get away with it. They can try to go to a exchange to get actual money out of it, but the exchange will most likely have blacklisted the addresses involved. They can try to tumble it, but the exchanges will mostly likely blacklist your account if they see any tumbling involved as they can't fulfill the KYC/AML laws then. They can try to sit on it for the future, but eventually they are gonna want to cash out somehow, and then the two previous issues get in the way again.
Every coin-mixing event can be interpreted 1,496 different ways. With each cycle increasing interpretations exponentially. "Every Whirlpool is structurally sound with 100% maximum entropy; Never cycling with yourself; Never cycling previously seen coins together; Never any deterministic links between inputs and outputs; And never any address reuse."
The authors of this coinjoin protocol use Boltzmann analysis to determine 1,496 possible linkages.
[1] https://kycp.org/#/323df21f0b0756f98336437aa3d2fb87e02b59f19...
[2] https://samouraiwallet.com/whirlpool
If everyone starts doing this, will all coins eventually become tainted? I don't see a way out of this problem.
Indeed, if everyone started doing this (or everyone started using Zcash with z-addrs), then you might be able to get away with it. But that's not where we're at today.
Try signing up to Coinbase and funnel $320M worth of ETH via that account. They will 100% lock your account and ask for proof of where it comes from. If it comes from after doing a bunch of tumbling, they will go harder against you to prove where it comes from. Any big exchange will do the same diligence as otherwise they themselves will get into trouble with the law.
Not to mention, converting your initial crypto tokens into another currency, and then another currency, and eventually making it to Fiat. For example, converting to Monero and back to BTC would be near impossible to trace.
On top of this, there is Paxful which you can utilize for cash payments.
There are many, many ways if you are determined. I don't think anyone would be silly enough to attempt a $350 million withdrawal from Coinbase.
You still have the problem of justifying where you got the initial crypto if anyone audits you. "I just remembered about some crypto I mined in 2010" will not cut it.
https://www.cbsnews.com/news/hard-drive-lost-bitcoin-landfil...
So cryptocurrencies are decentralized and free of regulation ... right until they aren't?
To be fair, if I walked into my local bank with $320M in cash I'd face the same problem.
[1]: There are so many people in crypto with such diverse views that it doesn't really make sense to say cryptocurrencies are X for any non-tautological value of X. Some people are 'code-is-law' crypto-anarchists, and some people are actually sane and can't wait for the law to get its shit together so they can build their cool decentralised prediction market without accidentally losing the ability to take international flights or something.
Without wishing to be seen as unnecessarily snarky, so was Napster.
> it turns out the world is run by people who like regulation
Indeed ... and Napster found that out fairly quickly, too. Although: it was good while it lasted (speaking as an ex-Napster user...)
I made no arguments for/against decentralization, I didn't mention web3 nor that there is no central instances or that no one controls nothing in the cryptocurrency world. What are you even doing here on HN if you can't actually reply with a good faith argument? Please save that for Reddit or wherever that happens normally.
What if round-trip those through many different cryptos?
What if round-trip those through funny NFTs and with that even inflate NFTs?
What if a combine many of those steps?
It all comes back to trust.
Not only are there a lot of legal problems with stealing that money, there are a lot of social problems too.
This is where philosophy comes in and helps the situation. You find the employees who wouldn't steal because they believe that money isn't everything.
It's life-changing money.
Yeah it's life-changing if money is your reason for living. I recommend you read a bit from Seneca the Young to understand where I'm coming from.
Edit: After doing some research, it appears that claims that open source doesn't fall victim to this problem are factually incorrect. [0]
[0] https://blog.sonatype.com/open-source-attacks-on-the-rise-to...
A better recommendation is to actually close down the computer and put away the mobile phone and actually go out from the bedroom and interact with real people.
This way, one gets an idea about how the real world works and see the true nature of human traits and behaviors.
If you just sit at home and read Arthur Schopenhauer, Marcus Aurelius and Plato you will build a mental model of reality that doesn't exist in the real world. Your naivety would show and you will be taken advantage of without even you knowing it.
Do both. Philosophy to improve yourself but also step outside the home to understand how real life works. Best of both worlds!
All I feel is your comment degrading me.
I recommend Seneca exactly because I interact with real people and feel his written thoughts express very well why there are many people who can work on a project worth millions and not steal anything.
Sorry if it came off any other way, really.
We're still talking magical beans here.
Yes, those mythical spherical virgin monks in a vacuum. Apple has been very vocal about their moral and just employees superiority.
Apple paid millions to woman after repair workers stole nude images of her from her phone and posted them on her Facebook https://www.businessinsider.com/apple-settled-lawsuit-womans...
Authorized repair caught using knockoff screens in customers phones https://www.youtube.com/watch?v=ETVJDUfZ5TM
And the end of the day we are all humans.
If this wasn't the case, society would fall apart very quickly.
I agree with you 100%. The scary thing though is that if 99% of people wouldn't steal, just imagine how much damage those 3.3 million people in the U.S. can do. (That's 1% of the U.S. Population)
[0] https://sapienjournal.org/latest-estimate-of-psychopathy-in-...
How much of our moral inclination to not rob or steal would still be there if we didn't grow up quickly learning that it's illegal? Especially if we're not even stealing from a fellow human, but some anonymous corporation.
Furthermore, you only need a few people to break the rules to do damage and potentially erode trust in the system, and if that trust is gone, the social contract to behave well to each other is even more at risk.
Rarer than gold plated unicorns in the crypto sphere
Or just the ones that want to be able to sleep at night without worrying about that knock on the door by the feds in a midnight raid. Some people could live with that stress - I know I couldn't.
I would suspect that a large number of engineers working in crypto are heavily motivated by money above all.
..."Wormhole said earlier that the network was down for maintenance."
A great summary of so-called 'DeFi'. How can a system be decentralized if someone can unilaterally decide to take it down for maintenance?
It's also socially important for well intentioned people to join the system right now. Web3 is a thing, it will happen. Mobile happened and now two companies worth roughly a trillion each control it entirely. Web3 is roughly on the same path. It's being built right now to gate keep and capture value. If you don't want to the internet to continue to dwindle down to a privatized button pushing consumption app, the battle ground is web3.
Yet another out of touch comment on HackerNews -- a place where people should be doing even a modicum of research instead of making things up.
To highlight solanas centralisation as a failure for crypto ignores how big the crypto space is and how much solana doesnt reflect the rest of the space
https://medium.com/@josusanmartin/in-cryptoland-decentralize...
"Preliminary analysis from CertiK shows that the attacker exploited a vulnerability on the solana side of the Wormhole bridge to create 120,000 so-called “wrapped” ethereum tokens for themselves. (Wrapped etherum tokens are pegged to the value of the original coin but are interoperable with other blockchains.) It appears that they then used these tokens to claim ethereum that was held on the ethereum side of the bridge.
Prior to the exploit, the bridge held a 1:1 ratio of ethereum to wrapped ethereum on the solana blockchain, “acting essentially as an escrow service,” according to CertiK.
“This exploit breaks the 1:1 peg, as there is now at least 93,750 less ETH held as collateral,” continued the report."
if (validSignature == signatureFromGuardian)
approve()
Several others here have explained how the attack actually happened.
But, these hackers walked away with $320M in ether, but is what they did actually illegal or did they just exploit a flaw in the code that allowed them to make huge profits on someone else's mistake, but wasn't actually illegal?
Does the FBI even get involved with cases like this? or is it just the wild west out there, and may the best hacker win?
Irreversible contracts with holes that you cannot dispute in a court of law.
https://levelup.gitconnected.com/how-ethereum-reversed-a-50-...
Should we expect that the core dev team will push for a fork again?
If so, what is the threshold for future scams? 100M? 10? If I get scammed of $100k don’t I deserve my money back?
Are we going to create a fork for every dispute, or are we going to just ignore all disputes?
The whole thing does not work.
Like I say, it's a consensus. Remember Ethereum Classic? Well, that network was powered by those who didn't agree with that rollback.
Isn't it better to make up your own mind than to have some 'leader' decide for everyone? Welcome to decentralization.
There are a few companies that specialize in tracking blockchain hackers. Not to mention law enforcement.
They could use a mixer to launder the funds but that may make it even harder to cash out because exchanges will lock your account if u deposit from an address that's remotely related to a mixer output address.
It's the same situation. Taking money that is not yours is a punishable crime. It's that simple.
I am thinking more along the lines (made up example), you studied the trading in certain stocks and figured out a pattern where big investors were always buying huge blocks of stock XYZ right before the close, and so the price went up - if you picked up on that, and then front-ran those trades and then sold them back to the big buyer while they are buying at the close - you are not doing anything illegal - you are exploiting inefficiencies in the system (and making a pile of dough.)
Not a perfect analogy I know - Just trying to understand where this 'hack' falls on that spectrum of exploiting inefficiencies vs sticking a gun in someones face.
The fact that the "owners" of the code fixed the code before it was exploited would come down heavily on the "illegal/fraud" side of things if it were litigated. If, however, they knew about it, and there were cases of it being done, and explicitly did nothing it possibly could be argued to be intentional.
Of course there's recurring theme of crypto users shouting "fuck governments, we're censorship-resistant!" on the way up, and "that was illegal, I'm calling the FBI!" on the way down.
In US law, theft is taking someone's property with the intent of depriving them of it permanently. It's very established in US cases that cryptocurrencies are property. The taking part is very public record. I don't think it would be hard to prove that someone intended to steal this money, given all the work involved that is publicly viewable.
It is indeed a Wild West in crypto land, but not because stealing is legal, rather because the odds of getting caught are slim, and so successful bandits keep right going.
It looks as if staying unregulated and operating "in the shadow" is more important to the crypto world than legal security. It seems as if you can't have both.
I don't disagree with you here, but in this case the asset was freely given. The giving was a mistake, but from what I understand if someone sends you something you're under no obligation to send it back to them.
I know the crytpo folks like to repeat the "CODE IS LAW" mantra, but it's not that simple.
Imagine that that you write some complex contract which basically makes the signee to hand over everything they own to you. And you get them to sign that contract. If it had been that simple, then you could just mail out such contracts to the whole country, and go collect your new fortune.
But we know it's not that simple.
Likewise with smart contracts. A "hacker" could argue that they fulfilled some criteria, which then activated some contract - but my guess is that it would legally end up in the same way as with the above example.
The more we dig into it the more scams we find. Everywhere. Wash trading, click baiting, pump and dump, code is law, etc. You will find the biggest bazaar there is in the crypto world. Biggest than the Nevarro bazaar.
The anonymous ecosystem is a paradise for scammers and money launderers. And a terrifying "crypto lord" on Telegram or Twitter may just be your nicest coworker.
I am not sure we will ever find a backer. So far we are working on the private risk management side of the venture.
I would expect more mainstream users, and they will hammered day one. Look at what is going with NFTs, all the wash trading pushing price ups (source: https://blog.chainalysis.com/reports/2022-crypto-crime-repor...)
I used to be more optimistic, but I can't help but see cryptocurrencies as a strong negative on society now.
It's pretty wild cryptocurrencies are still legal in many parts of the world.
I didn't raise a different issue or make an accusation.
I do agree that history plays an important part in the future, but the assumption that 'hackers' are not versed in history, seems awkward at best.
Never mind that a lot of the people building DeFi and writing the contracts today, have traditional finance backgrounds.
Stross' original statement is about regulation of traditional systems having historic drivers the crypto community had yet to re-discover, in his opinion, either in terms of broad awareness or appreciation. Challenging that would be fine (and interesting); saying "so what if it's bad? this other thing is also bad", though ...
FWIW, I think he's both right and wrong. I think there was a subset of the crypto community (and it likely strongly correlates with the productive one) aware of and actively rejecting a lot of history, but also a larger majority swept up in the hype without awareness of that information.
Now we live in an economy with asset inflation, and everyone's going "housing market is robust" as if that's a good thing.
Sure, it doesn't 'hurt', but we're leaving huge amount of money on the table.
Instead, the bad CDOs and CDSs could have just been unwound one by one with investment banks eating the losses and a lot of rich people becoming poor. Sure some _actual_ banks might have needed a holiday or two but instead we got TARP and QE.
Micro: Right this second, one of my checking accounts at a "reputable" institution (efirstbank.com) is blocked from ACH transfers until April due to hitting an inactivity threshold they refuse to elaborate on. The only way I can move money out is by paying $50 per wire.
Macro: the BTC coinbase says it all: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"
The 2008 collapse had nothing to do with ACH or any of the aspects which crypto has a plausible case for improving.
Secondly to that, I find it amusing that the cause of the GFC (amongst numerous other large-scale issues) is both poor regulation and ineffective enforcement of an industry that's over a century old. Proving, basically, that the regulation of cryptocurrency is a pure talk-fest (or that any US regulation is a pure talk-fest). It will result in the honest folks doing the right thing and getting screwed in the process whilst the dishonest still do the bad things because the US' will to enforce regulation is weak.
Totally different from banks: it's no longer the government deciding to bail them out, it's straight up the bank printing the currency telling people to bail them out or their currency becomes worthless.
I give it a bit of a free pass because it was a new thing built on top of a new thing, so somewhat of a beta test, which failed, so roll back to a working state.
Not sure what would happen now, although there are regular hacks that no longer see rollbacks.
Also, Ethereum Classic still exists, so that path is still available to those who want to follow it.
?
What part of 'the economy would crash and burn' do people not understand?
The banks would have gone down like dominoes and taken the entire system with it. This isn't 'fear mongering' it's basically just math, you can see how the system is connected and what will happen.
That's what happens when systems are tightly intertwined. We could entirely firewall them, but then they wouldn't be remotely as efficient.
The fallacy of 'Hard Currency' is that people think we can avoid these problems with some extant construct, like 'Gold' or 'Digital Proof' but that doesn't solve the problem at all.
Economies are integrated systems that have to be regulated as best we can there is just no way around it.
'Hard Currency' is an 'instinct' that develops into an ideology that just doesn't hold up.
Far from 'weakly enforced regulations' most Western nations have very well and strongly enforced regulatory regimes. There are rules upon rules about what is allowed and what is not.
Securities Regulation are maybe a bit iffy, particularly insider trading, but that's only one thing.
The only way to avoid the problems we saw in 2008 would be to have more effective regulation of the parts of that system that failed, crypto won't save us there.
Finally, the banks were bailed out mostly with loans which they paid back, not free money. If there was a big funny business bailout, it was the mortgages that the Fed accepted as collateral at face value, which was more or less a bailout of homeowners, related to the fact the issue was with homes, not so much currency.
And the fact that the Fed could just QE a bailout is why there's no will to properly regulate or enforce.
It's a double edged sword.
I would have liked to see what would happen in a pandemic if Bitcoin were the world's reserve currency; if no QE were possible to help the suddenly unemployed etc. If / when Bitcoin fails in such a situation, we could see an increase in trust for fiat currencies and government monetary policy. It's a purely hypothetical situation though.
We already know the answer to it: the economy would collapse in a hulking mass.
The 'advantage' of Bitcoin, which is 'integrity' (i.e. can't be debauched) becomes a big 'disadvantage' during a time of crisis, when reallocation has to happen.
It's like nailing your boat with a plank to the dock: string and reliable. But then the tide goes out and everything breaks: better in the long run to use ropes.
BTC is inflationary, people would rush to it during a crises and credit would evaporate, the dominos would all fall down.
Something 'unforeseen' will always happen, meaning we have to be able to change the rules sometimes.
Much like a pandemic situation, a lot of the normal rules for operating the economy go out the window. Vaccine production and distribution is fully socialised, not part of normal healthcare etc..
And yes, it's a giant double edged sword which is why there's no excuse for not having 'intelligent, comptetent and responsible leadership' at all times.
They are as regulated as the system will allow. That is, companies dump lots of money into Congress to increase the chances of existing regulations being weakened and new ones neutered, and it works (see: Dodd-Frank [0]). And sadly, I don't see things changing anytime soon, as the American political landscape is basically divided into those who talk big on progress (but who, upon gaining control of Congress and the presidency, just barely uphold the status quo) and those who want to deregulate things even further.
> The fallacy of 'Hard Currency' is that people think we can avoid these problems with some extant construct, like 'Gold' or 'Digital Proof' but that doesn't solve the problem at all.
This is accurate. While cryptocurrencies might not allow for spending more than you have in your wallet, there are many ways you can trade on margin and "stable"coins which only have a fraction of their issued volume backed by any assets [1][2][3], including propping up an exchange with stablecoin funds [4]. I would not be surprised if someday there was a "bank run" on these unsecured stablecoins which caused huge knock-on effects.
I think that the fundamental problem is greed combined with people who might not be very greedy but who are desperate to improve their financial situation. And unlike traditional financial institutions, crypto is quite difficult to regulate or provide any consumer protections for.
[0] https://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street...
[1] https://www.bloomberg.com/news/articles/2021-08-11/coinbase-...
[2] https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b...
[3] https://www.singlelunch.com/2021/05/19/the-tether-ponzi-sche...
[4] https://amycastor.com/2019/01/17/the-curious-case-of-tether-...
There is of course the very legitimate argument of bailing out homeowners (banks still get their money and people get to actually be in houses), but letting the pieces fall where they may is extreme orthodoxy when the real world is at stake. And of course the crypto ecosystem has shown this pragmatism so many times now when basically forking off to other things to reverse unwanted transactions.
Gov't intervention when systems are falling apart are not a bad thing (well, at least when they actually do helpful things).
https://money.cnn.com/2014/12/19/news/companies/government-b...
I agree that they should have done what they did. I do not agree that it was net profitable.
If I can buy n units of goods and services for the money before the investment and n-1 units of goods and services after the investment, I've lost. I don't see how the particular numbers you print on currency enter the equation. How is nominal profit at all interesting?
https://www.federalreserve.gov/faqs/credit_12666.htm
https://www.consumerfinance.gov/complaint/
https://www.helpwithmybank.gov/file-a-complaint/index-file-a...
You have some recourse with regulators when dealing with fiat banking systems. You have zero recourse when dealing with crypto losses (unless you’ve lost enough that a criminal prosecutor makes it their problem and you can convince them it’s worth their time).
I think the more concerning thing I have seen is banks deciding that they no longer want to do business with you with no appeals process or recourse as to why your account was flagged.
Banks are nice until they arnt. Crypto is a wild west but its the future of investments. The older traders will die out, those who had the money and the advantage will be replaced like the older bootleggers turned into multi-nationals.
You can't... write a check? It's right there in the name.
Nobody claimed that. And whataboutism is not a solution, right?
> It's pretty wild cryptocurrencies are still legal in many parts of the world.
I think there's a few reasons for that, one is, it actually makes money (ex: Coinbase generating billions, tax money generated from all the capital gains, electricity paid for by miners, etc), capitalist systems won't ban money making machines. It's also impossible to ban, you can ban on/off-ramps, you can't ban Bitcoin from running and transacting, by banning on/off-ramps, you'd lose any visibility into what's actually happening on the pseudonymous network. And last but not least, if this ends up being the next big thing, nobody would want to be left behind, so there's some game theory mechanics as well.
They don't have a list of board members/investors or a mailing address anywhere that I can find
If it doesn’t function as intended then complain about that and launch a competitor.
I know of dozens of high profile hacks over the last year that left entire communities scrambling where some members and users had previously opened policies on one of the various insurance protocols and got paid out the same day as the hack. They were often recipients of the recovery path the communities took too.
There is more than just Nexus Mutual. You can ask in their respective communities if they have stats on that, or perhaps run a query on dune analytics to see what actions their associated smart contracts have taken, isolate a claim payout and tell the query to count
What I envision is the insurance choices being shown at the wallet level or opening policies is concatenated in other coverable smart contract transactions.
Insurance where you can't be certain the company will be around (or actually pay out) when the shit hits the fan is completely useless as insurance, and it's either naïve or disingenuous to suggest that the solution to that is to "complain". And suggesting launching a competitor is just an extra special kind of stupid: if you have enough capital to start an insurance company, you're obviously not in the market for buying insurance.
Its not the same as the highly capitalized opaque insurance company you need to be skeptical about, the analogy from a lived experience almost doesnt work at all. it does have the function of derisking things though.
So it exists, I know it exists, you dont know it exists, I’m not the encyclopedia of the specific nuances of each protocol, so go check it out
But anyway, I went ahead and checked out the white paper of nexus mutual [1], because I was curious. It appears to have a serious amount of hand-waving on one of the most important topics: the risk correlation between offered insurance products. They do reference the correlation matrix, but the only mention of how the value of the matrix is determined is to say that if independence between cells can be assumed, the math is very simple. Doing a quick search through their website and code, it looks like they are indeed just assuming that products aren't correlated, instead of trying to estimate real correlation values. This means that their minimum capital requirements (and thus the implied risk of default) are incorrectly calculated if that assumption is violated--which it certainly is.
This seems to be by design, and baked into the incentive structure of the whole concept. There's just no practical way to crowdsource proper correlation evaluation and adjustment, and the economics stop being remotely competitive if you just guess at correlations and treat it as another risk to be hedged. You can see this later on in the white paper (appendix A), where they point out that the economic viability of the project depends on lowered labour costs because product creation, assessment, and policy issuance are crowdsourced or automated. Their game theory/tokenomics are focused on providing incentives for individual products to price risk accurately, however: they do not propose any mechanism for adjusting or calculating MCR based on correlation risk when new products/coverage are offered. This is further evidence that they're just assuming independence without any real justification, and thus being chronically undercapitalized.
[1] https://nexusmutual.io/assets/docs/nmx_white_paperv2_3.pdf
You’ll be better off asking around in their community or using the product to see what the current state is, usually they diverge far from the white paper such that analyzing it that was is a waste of energy. Sorry about your dissertation. You can branch the chain onto localhost to prod at it if you don’t want to spend any money.
KARP, Hugh DANILA, Ionela Roxana MELBARDIS, Reinis MUNOZ-MCDONALD, Nicolas THURGOOD, Graeme George
This matches the company and director information registered in the UK since 2017. Company mailing address is here as well:
https://find-and-update.company-information.service.gov.uk/c...
I think Nexus Lexus is legit. They had to in order to get UK clearance. But I understand that they want to demutualize now and become a DAO. DAO is the gold standard for no corporate oversight.
Fake profiles on Twitter and Linkedin. Thousand of fake followers. Incorporated in banana countries. And if they are incorporated at all. If the plan is a rug pull, then bypass incorporation, of course.
There are some opportunities that can be a meaningful demonstration of credibility, like registration with the FCA, but I don't see any evidence of that for this company. I would consider their incorporation (as a cic, not a for-profit company) meaningless in determining if they're credible.
The reason why it's not done as much for ordinary businesses is that you can't just force someone to surrender $320M worth of stocks, real estate or wire transfers and actually keep that, it's reversible and traceable so most of it will be reversed and the rest traced. At best you can expect briefcases of cash ransom which is physically limited to much smaller amounts (e.g. it's simply impossible for a person to carry $320M in cash or fit it in a random car) and still needs laundering, and as the payoff is less lucrative then it's not worth the risk compared to other activities like trafficking drugs. Crypto, on the other hand, has this possibility to just force a large transaction and actually get away with it - so I'm just wondering why we aren't seeing cases of violently forced crypto transfers; perhaps they're just kept under wraps.
- It's currently easy enough to hack the same money. Way less effort.
- Doing something physical puts the crime into areas where law enforcement is used to working, used to catching people, and leaves physical evidence in the world. At least in the developed world, kidnapping rich people goes to the head of the line for police resources.
- Most large projects use multisigs. This means you may need to kidnap a half dozen people in multiple counties. Doable, but the odds of none of these failing and exposing the whole operation goes way up.
But several attackers have been tracked down by blockchain sleuths, or by the hacked projects themselves. In the usual case, when messaged with personal details about themselves, the attacker gives back 90%, and everyone calls it a day.
Except for this guy.
https://www.coindesk.com/policy/2021/12/22/teenage-suspect-i...
Who might be first DeFi hacker to go to trial.
Definitely an interesting one to watch
Why?
The alternative is demanding payment in a privacy coin, but it will be difficult for any potential victim to get as much as you need quickly enough.
Even with a privacy coin the attacker still has to be in close enough physical proximity to the victim or hostage to threaten them which leaves behind physical evidence.
Overall, I’m not sure you gain much by demanding payment in crypto over cash.
This amount would be up to half of the tornado cash anonymity pool, but can be withdrawn over time
they can always withdraw a bunch of tornado cash notes to virgin addresses and pump a random cryptocurrency they already own and bought with their separate clean money
if $SHIBDOGE rises 30,000% because virgin tornado cash funded whales are buying it, the prior owners are just going to be seen as lucky traders indistinguishable from the rest, all with clean money. one of those owners would ideally already own a lot of the chosen token and be the bridge exploiter. they will be seen as having much more clean money after selling their pumped crypto.
You are assuming you are still alive.
The police: "we don't prosecute those crimes" , "this is not our juridiction", "why don't you try the FBI?"
I used to work in the Presidio of San Francisco. An ex military base. The only canons left are from the 1800's. I needed to file a police report (car theft), called the Police in San Francisco. OK, what's your address? Sorry, we don't handle those cases, call the Federal Police. Then later we had to file a lawsuit, so based on previous experience we filed in Federal Court. They told us, sorry even though you are on Federal land, you must file in a California court. Go figure.
Just to say that nobody can help our dear crypto bros. BTW did you declare the existence and the amount of your crypto holdings last year? Oops, now you'll regret that police report you filed (goes into waste basket) and you have to deal with the IRS. The crypto world is better than the proverbial kid in the candy store.
and another - https://www.coindesk.com/markets/2018/01/29/uk-crypto-trader...
What I can I do with 100's of millions of dollars worth of tainted ETH ?
The only thing you can really buy with coins are NFTs, if I want to buy a house or car or plane or whatever with the loot, I still have to convert that ETH to cash, major exchanges will blacklist these tokens, washing services/ coins cannot easily handle this volume, extracting value out of this size is just as complicated as regular crime.
For instance you can spent few millions and get literally every re-used address tainted. Just sent $1 worth of ETH to top 1,000,000 single address holding meaningful amount of ETH, or expensive NFTs, etc.
Then every legit exchange will have huge issue with maintaining blacklists. Oh and you can also sent 1 million to random people and 1 million to your own addresses.
Or just sell some of your crypto on P2P exchange at 2-3x rate with collateral. There will be literally thousands of people who gonna be happy to accept your tainted ether if you pay them good enough.
PS: So I literally see tons of opportunities how to do this kind of mixing. Yeah you'll lose huge percent of money, but even half of 300 millions is a lot of money.
You wash them through different coin swap contracts. Even losing $10 million worth, in gas/processing fees, is just 3.125% at the current estimated value.
Traditional finance puts power in men that don’t even need to hack anything to take far more than 0.1%.
Half of everything would be likely worth it if crypto lives upto even a smidge of it’s true promise.
In my view, the insanity there is that the amount of money sloshing around in the system is enough to mask the effects of fraud with close to zero consumer liability.
And it's not the hack itself. Crypto projects get hacked every week. Multichain bridges are the target of the month, with eye-watering amounts and complex code running on different blockchains, and off blockchain. And a Solana bug like this one is to be expected.
What is surprising is to see a project promise to fully repay everyone, within two hours of the attack occurring. That size of cash for a "we'll fund it back up", and that kind of speed is really unusual.
In the immediate aftermath of the hack, people were commenting that the now unbacked Solana side eth was still trading near its normal prices, and it stayed that way until the announcement. This leads me to guess that insiders must have known that there would be a chunk of money coming to refill the coffers after the hack, which in turn means that the decision to send the project hundreds of millions of dollars must have been made at or before minutes had elapsed from the hack.
This part puzzles me to - immediately agreeing to plug the $320Million hole really makes you wonder how there is that much money freely available to just pay people back so easily.
[citation needed]
This absolute reeks of the type of baseless claim that someone living in a bubble surrounded by NFT fanatics would claim. Be careful not to think that the trends within your social network are indicative of the population as a whole.
I mean I get your point and it kinda stands, but the latest batch of crypo fueled wealthy people are less the pioneer/early movers and more the "I'll create a crypto product nobody understands and, boom it has a market cap of a couple hundred billion!". And since you can trade whatever crypto you want for eth, all you have to do is convince people your coin is worth something and you can do exactly the above thing.
I think you are falling prey to selection bias. Yes there are many scammy projects that made a few people rich, and a handful of non scammy projects, but the vast majority do not work.
The recipe for creating fake dollars in crypto is pretty well established at this point
> they need “$320 million” in crypto which is easy enough to create out of thin air
Second, this is an illustration of basically what you've just articulated: https://news.ycombinator.com/item?id=27149241
Not a perfect analysis but there's about $114B circulating in crypto: https://tomtunguz.com/how-much-money-flowing-into-crypto/
https://etherscan.io/address/0xe4f6df25710e75a08cb967e831ea5...
So he stops at the nearby ATM and withdraws another $320. Then walks down the same street with even more thugs waiting.
I wonder if network insiders had been prepared for the eventuality of something like this happening, and were just executing a playbook.
Contract code if anybody is curious. It's less than 100 lines of Solidity, easy to read even if unfamiliar with the language: https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead...
Jump acquired certus one, who developed the wormhole. Jump has invested quite heavily in the solana ecosystem, so while $300mm is a lot of money, it's a small price to pay for a firm of their size.
They're a top trading firm, whose competitors have spent $300mm to run hundreds of miles of cables to save microseconds in latency.
It's microwave towers, and it's to save milliseconds. You're not dealing in mics until you're in the colo.
But those are investments, which will generate huge returns. Throwing $300m to paper over a hack isn't remotely the same.
Trust is the most important thing in crypto, exchanges are making billions in profit, not covering a $320m loss could generate billions in damage by crypto prices plunging, so it makes a lot of economic sense to avoid that.
There are investors holding billions in Solana crypto, so it's in their interest to avoid a Solana loss of trust.
It does create a morale hazard if that was indeed what happened - at this point just speculation.
Is this realized profit in real cash, or book profit based on valuations?
Who puts real money into crypto by billions? I somehow doubt that enough actual physical people come to buy crypto. Is this money "invested" by funds?
This whole ethereum thing sounds like the old joke "we exchanged a dog worth 1 million for 2 cats worth 0,5 million each".. yet now they try to find someone who will buy this stuff at those bullshit valuations - to be the one left holding the bag.
Also if so much real money is generated then where are the billionaires? Actual ones who divested from crypto (to lower risk) and bought unsexy real world stuff. I understand that in theory crypto is always growing, but who is coming to buy that 1 BTC for 36k usd? To get billions it would have to be a lot of people.
> Binance generated at least $20 billion of revenue last year, according to a Bloomberg analysis of its trading volume and fees.
https://www.bloomberg.com/news/features/2022-01-09/binance-c...
> Also if so much real money is generated then where are the billionaires
Same article:
> With $96 billion, Binance CEO Changpeng Zhao is closing in on tech titans including Facebook’s Mark Zuckerberg and Google’s Larry Page and Sergey Brin.
That’s not what the crypto shills have been saying for years. It’s supposed to solve everything because it’s trustless.
Validity of execution and order of execution.
Without considering smart contracts that's basically enough. With smart contracts there are many valid states that are very undesirable (e.g. pegs breaking, manipulation of prices to liquidate positions) this one would be a peg breaking that subsequently would trigger a cascade of liquidations, at the current state of solana that would also flood the network in people racing to try and grab the liquidation fees[1]
[1]: (a quirk of all of the smart contract platforms I know is that there is no way to ensure that X happens under Y conditions, so instead what people do is set up there systems such that if Y there exists riskless profit for anyone who can make X happen. So once collateralized positions become undercollateralized (e.g. backed by 1.1x) anyone that can return the lended assets (which need to be liquid & fungible) gets the collateral)
What? I thought the whole point was to be trustless?
Why hello J.P. Morgan.
So can we stop pretending that cryptocurrency is anything but an attempt to recreate the financial system in a way that facilitates ignoring banking regulations?
No it is not and neither should it be. Blockchains are 'supposed' to be trustless with no need to trust a particular group or some group of keyholders. Otherwise, what is the point?
There is no point in promoting decentralization when the whole chain was reversed due to a hack (The DAO hack) or users still resorting to using centralized exchanges rather than 'decentralised' ones or even running most of the nodes on a centralized server.
I hope you have not proven that you have misunderstood the point of their decentralization claims. It makes it very easy for them to dismiss your comment.
That's probably NOT what's going to happen.
It's most likely going to be 320 million USDT (Tether) or an equivalent amount of ETH (which was most probably purchased with Tether).
Interested to see one of these cases going to court.
Contracts also need things like consideration and not being "against public policy".
We need a smart court to handle it.
Thus, "smart contracts" behave like software programs (what happens is what is actually written in the "smart contract", not the intent that programmer had when he wrote it, nor the expectation of the user when he interacts with it), and not like legal contracts (where intents and expectations come into play, and courts can be involved for arbitration).
Besides, which exact court would have jurisdiction over a smart contract exploit that happens in Ethereum, for example? A court in the country of the person deploying the contract? A court in the country of the person that interacted with the contract and lost their assets? A court in the country of the (unknown) exploiter? A court in the country of the blockchain developers?
Me: Hey boss the code is to spec ready to deploy? Just need my payment in USD.
Crypto Entrepreneur: Yes, here is your 50k, I will now turn my 100k into 5M, with my smart contract.
Me: actually it looks like your money is gone. They used feature X that you requested in a way that you didn't expect.
I don't think courts would feel the same way. For instance: https://www.coindesk.com/policy/2021/12/22/teenage-suspect-i...
furthermore courts all operate on phoenix right "gotcha!" rules where one slight mistep in a business contract means the other party can go Scott free off the hook, and not have to worry at all about reasonable intentions or fairness
Also, if it auto deploys from a git repo, then you just need a committer's git keys to exploit it. Having code auditing and multisig git tags has to be rare.
Somebody else is going to run that code publicly, and each person who runs it will find out about the patch with some time delay
this just happens to be a project that does
No, they could have patched the contract before publishing the commit on GitHub. Granted, an attacker could watch the chain for such "contract upgrade" transactions and attempt to front-run it, but that would be a lot harder than just discovering undeployed security patches on GitHub.
if (validSignature == signatureFromGuardian)
approve()
false == false
And then, once in a while, one of those edge cases...
Huh? That resolves to false && false, which equals false.
# This function is defined by the system
def validSignature(sig):
return false
# This function is defined by the system
def isSignaturefromGuardian(sig):
if sig.validator == "guardian":
return true
return false
# A bug in the system compared both return values
if validSignature(tx.sig) == signatureFromGuardian(tx.sig):
approve()I think "something about not checking signatures right" is about as deep as I'm going to understand this.
if (isSignatureValid == isSignatureFromGuardian)
Geez, if you name variables that it’d be amazingly easy to make a mistakes like what you describe, and then just read straight over them when you’re reviewing the code.
Where would the ETH come from?
If this is temporary, than this is extremely shady behaviour for an organization handling "millions" of crypto tokens.
This thread is about where the now-stolen ETH will come from (to restore 1:1 backing of wETH to ETH). Not where the stolen ETH originally came from.
So, um, wouldn't the person pulling off the exploit be a fool to try and accept this "bug bounty"? Even if the offer is fully sincere, the legal system doesn't run on "code is law", and it seems like the original hack could be prosecuted under CFAA whether Bridge wants that or not.
Are they just going to create 320M USD out of thin air?
Link: https://en.wikipedia.org/wiki/City_bonds_robbery
Pretty crazy they would just walk around with £300M in a briefcase.
Banks are bug bounties.
Stock market is a bug bounty.
...
Similar with the stock market. If you find a "bug" it's likely that the SEC will want to have a chat with you.
Let's they actually had $320M USD ready and waiting. I assume the order book would not allow them to reach the fixed amount of ETH lost.
.. Sort of curious what would be the actual USD cost if someone actually tried to purchase the amount of ETH lost given a fixed order book. Do any exchanges make that information available where you could calculate that?
If you had $320mm USD and needed ETH, you'd want to use an OTC desk, because the markets will feel it, even though they won't actually run out of depth. Right now the "+2% depth" (https://coinmarketcap.com/currencies/ethereum/markets/) on Coinbase, Binance, and FTX is about 5mm, and there's probably a dozen other markets with similar depth, though you'd want to execute the trades simultaneously. Decentralized exchanges have depth too; uniswap's USDC/ETH pool would let you buy $40mm for 2% slippage. All in all, you could probably get it all at about a 5% premium if you were really prepared for it.
Building consensus to classify some trades as theft is hard to do in-band. Even if do build such a workflow in the chain, how do you get everyone to agree ? Distributed consensus will take lot more time than attacker quickly making trades and moving the coins across multiple chains etc.
If you centralize this action and have few people decide ( as has happened in some coins in the past) it is no longer a decentralized system.
>A fix has been deployed and all funds are safe.
So...does this mean they reversed it or are they just promising to pay everybody back at their own expense?
The fundamental security limits of bridges are actually a key reason why while I am optimistic about a multi-chain blockchain ecosystem (there really are a few separate communities with different values and it's better for them to live separately than all fight over influence on the same thing), I am pessimistic about cross-chain applications.
To understand why bridges have these limitations, we need to look at how various combinations of blockchains and bridging survive 51% attacks. Many people have the mentality that "if a blockchain gets 51% attacked, everything breaks, and so we need to put all our force on preventing a 51% attack from ever happening even once". I really disagree with this style of thinking; in fact, blockchains maintain many of their guarantees even after a 51% attack, and it's really important to preserve these guarantees.
For example, suppose that you have 100 ETH on Ethereum, and Ethereum gets 51% attacked, so some transactions get censored and/or reverted. No matter what happens, you still have your 100 ETH. Even a 51% attacker cannot propose a block that takes away your ETH, because such a block would violate the protocol rules and so it would get rejected by the network. Even if 99% of the hashpower or stake wants to take away your ETH, everyone running a node would just follow the chain with the remaining 1%, because only its blocks follow the protocol rules. More generally, if you have an application on Ethereum, then a 51% attack could censor or revert it for some time, but what comes out at the end is a consistent state. If you had 100 ETH, but sold it for 320000 DAI on Uniswap, even if the blockchain gets attacked in some arbitrary crazy way, at the end of the day you still have a sensible outcome - either you keep your 100 ETH or you get your 320000 DAI. The outcome where you get neither (or, for that matter, both) violates protocol rules and so would not get accepted.
Now, imaging what happens if you move 100 ETH onto a bridge on Solana to get 100 Solana-WETH, and then Ethereum gets 51% attacked. The attacker deposited a bunch of their own ETH into Solana-WETH and then reverted that transaction on the Ethereum side as soon as the Solana side confirmed it. The Solana-WETH contract is now no longer fully backed, and perhaps your 100 Solana-WETH is now only worth 60 ETH. Even if there's a perfect ZK-SNARK-based bridge that fully validates consensus, it's still vulnerable to theft through 51% attacks like this.
For this reason, it's always safer to hold Ethereum-native assets on Ethereum or Solana-native assets on Solana than it is to hold Ethereum-native assets on Solana or Solana-native assets on Ethereum. And in this context, "Ethereum" refers not just to the base chain, but also any proper L2 that is built on it. If Ethereum gets 51% attacked and reverts, Arbitrum and Optimism revert too, and so "cross-rollup" applications that hold state on Arbitrum and Optimism are guaranteed to remain consistent even if Ethereum gets 51% attacked. And if Ethereum does not get 51% attacked, there's no way to 51% attack Arbitrum and Optimism separately. Hence, holding assets issued on Optimism wrapped on Arbitrum is still perfectly safe.
The problem gets worse when you go beyond two chains. If there are 100 chains, then there will end up being dapps with many interdependencies between those chains, and 51% attacking even one chain would create a systemic contagion that threatens the economy on that entire ecosystem. This is why I think zones of interdependency are likely to align closely to zones of sovereignty (so, lots of Ethereum-universe applications interfacing closely with each other, lots of Avax-universe applications interfacing with each other, etc etc, but NOT Ethereum-universe and Avax-universe applications interfacing closely with each other)
This incidentally is also why a rollup can't just "go use another data layer". If a rollup stores its data on Celestia or BCH or whatever else but deals with assets on Ethereum, if that layer gets 51% attacked you're screwed. The DAS on Celestia providing 51% attack resistance doesn't actually help you because the Ethereum network isn't reading that DAS; it would be reading a bridge, which would be vulnerable to 51% attacks. To be a rollup that provides security to applications using Ethereum-native assets, you have to use the Ethereum data layer (and likewise for any other ecosystem).
I don't expect these problems to show up immediately. 51% attacking even one chain is difficult and expensive. However, the more usage of cross-chain bridges and apps there is, the worse the problem becomes. No one will 51% attack Ethereum just to steal 100 Solana-WETH (or, for that matter, 51% attack Solana just to steal 100 Ethereum-WSOL). But if there's 10 million ETH or SOL in the bridge, then the motivation to make an attack becomes much higher, and large pools may well coordinate to make the attack happen. So cross-chain activity has an anti-network-effect: while there's not much of it going on, it's pretty safe, but the more of it is happening, the more the risks go up.
https://www.reddit.com/r/ethereum/comments/rwojtk/ama_we_are...
> even though nothing was broken on the Ethereum side
The smart contract code was wrong, not Solano itself. This situation was made no worse by dint of being a bridge or involving two blockchains, except that it required domain knowledge in both chains.
these are "smart contracts", and it's written into the code. Finding these relatively simple bugs are like finding a loophole in a law. In this case, the researcher found a loophole and then used that loophole to pay his/her self ~98K ETH.
The owners/ custodians of the coins or of the program managing the coin did not intend for you to have the coins or actually transferred the coins to you.
Even if they had a bug in their program that automatically transferred their coin to you and you didn't return it the law still generally considers that also as theft.
Contract law is only one part of the law.
There are myriad reasons legal reasons actual contracts are voided and thrown out in court as unenforceable, no consideration, illegal actions or unilateral negotation or even unfair terms etc.
You cannot have a legal contract which for murder for example.
It is quite catchy, "code is law". But law where? In some virtual crypto land?
Enforcement in this case is not LEOs but rather the smart contract that lives in the blockchain. Except there are no grey areas
it’s the responsibility of the smart contract creator(s) to make sure all edge cases are covered and thorough exhaustive testing is performed.
Exfiltration of coin by a bug is not any way the same. Government made the mistake in your scenario and you are let go, in this the owner of the property made the "mistake" .
It is no less a theft because someone kept the key to their house under the carpet and and you didn't have to "break in" literally .
Basically, we're going to go through a process where a ton of people realize that things like reversible transactions in the traditional financial system are a feature not a bug. Thing like KYC/AML are a feature not a bug. The idea that crypto is extragovernmental is a myth. And things like smart contracts and NFTs only really work when they're completely self-contained on the blockchain. Like, I can create an NFT for a song but that doesn't mean I have the legal right to sell that (there's lots of scams like this). Even if I do, you still need traditional systems to enforce such rights anyway.
At the end of the day, if you create anything that's worthless, it will be worthless independent of whether you're an insider or outsider.
A bunch of computer engineers are now burning through that good will in a misguided attempt to accumulate personal wealth.
eg to take the highest profile example with the most consequences, George W Bush got elected because people were confused with butterfly ballots and then it took too long to do a recount in Florida so the Supreme Court had to step in and stop the recount … as a result we got 9/11 (negligence) the invasion of Iraq (lots of excess deaths and destruction of large swaths of the middle east) the PATRIOT Act (erosion of civil liberties) and much more. Imagine if we had a secure system alongside the paper ballots that involved Merkle Trees and multi-factor verification for voting, so everyone could verify theirvote and participation would be higher. Banking apps are secure enough for people, why not this…
I wrote an article on CoinDesk about this very thing two years ago: https://www.coindesk.com/tech/2020/03/12/in-defense-of-block...
Anyway, going back to “feature not a bug”. The real problem is Blockchain. It uses the full power of the network on every transaction, so it costs just as much to transfer $500 million in one shot as it does $0.50 — that is the wrong pricing structure. It is too cheap to transfer huge amounts and circumvent capital controls, do money laundering etc. The “world computer” is a glorified mainframe with “gas” playing the role of renting time on the mainframe. “Flash loans” shouldn’t be possible, they only are because one transaction in the world can happen at a time.
When we move past blockchains, we will have proper pricing of securing transactions (in % of the amount being managed). And then we can build reversibility ON TOP OF the non-reversible architecture.
The non-reversible architecture and finality in the vast majority of transactions is a GOOD thing just as it is in most databases. Reversibility should be explicitly built on top of it.
Smart contracts and other things are great and we have only scratched the surface because Blockchain holds them back. Having the rules stated upfront and enforced without government violence is great. For example copyright and DRM is being replaced with NFTs and POAPs. Old boys clubs are being replaced with DAOs. New non-coercive business models are emerging. Open source and journalism and other digital content can be monetized without SWAT teams raiding grandmas. Just one of hundreds of innovations.
People just cling to the old ways because the technology is not mature yet.
As for the 2000 election, this is a whole rabbit hole. You're right the butterfly ballot probably caused miscast votes. But that's user error. Punch cards are a ridiculous form of voting technology. All the recounts weren't about being more accurate. They were about passing punch cards through counting machines that would knock out chads every run through and changing voting standards after the fact (eg pregnant and dimpled chads).
Blaming 9/11 and the grand misadventure of the Iraq war on paper ballots is... a stretch. I mean, 9/11 had been in planning for years and probably would've happened anyway. I suspect a war in Iraq would've happened anyway with Gore in office. I mean a good chunk of Democrats (including Hilary Clinton) voted for the Iraqi war resolution. Many of these same people (including Biden) are now threatening to start a war with Russia over Ukraine.
> Just one of hundreds of innovations.
I disagree. Contracts enforced by the blockchain only have value when the entire context of that contract is on the blockchain. As soon as you leave that system you need traditional infrastructure and systems to enforce contracts and handle disputes.
What's next, telephone switchboard operators are better than VOIP? We went from paying $3 a minute for long distance audio calls to nearly free calls with multi-way high res video broadband, simply by automating away the infrastructure to get things done. Why can't the same be done with voting? Today we spend 16 billion dollars on a national election with shitty turnout, tomorrow any small organization can have a poll and vote about anything, in any number of ways, and turnout will be much better too.
There was a time that chess playing programs were laughably bad. And within a couple decades they are able to beat any grandmaster. Give it time.
About the 2000 election: I regret even mentioning the butterfly ballots, because the real point is that it took TOO LONG to recount the votes, BECAUSE it was paper ballots, and thus GWB was elected because the Supreme Court stepped in. Paper ballots and their inefficiency have consequences and downsides, you just might choose to ignore them in order to not have the debate of pros and cons vs electronic form.
(9/11 may not have happened if Bush had acted on intelligence like "Osama Bin Laden Determined to Attack in the United States. https://www.youtube.com/watch?v=3L2513JFJsY) Agreed about the war with Russia over Ukraine, Democrats have their own issues, absolutely. (As do leaders of other countries).
> I disagree. Contracts enforced by the blockchain only have value when the entire context of that contract is on the blockchain. As soon as you leave that system you need traditional infrastructure and systems to enforce contracts and handle disputes
Even if that were strictly true, we can have all these applications on the blockchain today: https://intercoin.org/applications
But it's not even true. People don't need the entire source of truth in a byzantine fault tolerant network. They just need to secure that it wasn't tampered with. The key is that you can turn over control to a computer program + protocol rather than elected representatives, magazine publishers, librarians or telephone switchboard operators. And we have been increasingly doing that.
You brought up paper ballots for voting and then blamed them for 9/11 and the Iraq war. If that's your definition of "debate" I don't think I can help you.
> What's next, telephone switchboard operators are better than VOIP?
If you're so into debate you might want to look up "straw man argument".
The key design principle for a voting system is that voters should be confident in the results. That means if there's a paper ballot, the voter should be able to understand what it says (ie not just some QR or PDF417 or similar code). The worst that can really happen with paper ballots is ballot-stuffing but there are lots of checks and balances in place such that there's no evidence of this having ever been a widescale problem in the US, let alone has changed the result of an election. A pure electronic count has no such safeguards and no real capability for an audit trail.
> There was a time that chess playing programs were laughably bad. And within a couple decades they are able to beat any grandmaster. Give it time.
Here you come across as the very kind of person I mentioned, a Blockchain Andy who has completely drunk the Kool-Aid. Chess is a compute power problem. Electronic voting is not a computing power of algorithm or even a technical problem.
> ... because the real point is that it took TOO LONG to recount the votes,
No, it wasn't. The real problem in 2000 was that multiple recounts were done selectively to a changing standard of what constituted a valid vote even contradicting the instructions given to voters to "divine the intent of the voter".
> and thus GWB was elected because the Supreme Court stepped in
GWB won because he got more votes with the rules that existed for that election. Period. I don't say that as a partisan (for the record, I'm a leftist closest to the Bernie camp). It's just fact. Even a comprehensive review of ballots by the NYTimes after the election showed GWB won even with the most favourable change of rules (eg dimpled chads).
I am aware that there are various opinions on it, but once again, it's not so "clear cut" as to not have a debate. In fact, the sources I'm following, such as Wikipedia, say exactly the opposite about the media recounts:
https://en.wikipedia.org/wiki/Bush_v._Gore#Recount_by_media_...
In 2001, the National Opinion Research Center (NORC) at the University of Chicago, sponsored by a consortium of major United States news organizations, conducted the Florida Ballot Project, a comprehensive review of 175,010 ballots that vote-counting machines had rejected from the entire state, not just the disputed counties that were recounted.[3] The project's goal was to determine the reliability and accuracy of the systems used in the voting process, including how different systems correlated with voter mistakes. The study was conducted over a period of 10 months. Based on the review, the media group concluded that if the disputes over the validity of all the ballots in question had been consistently resolved and any uniform standard applied, the electoral result would have been reversed and Gore would have won by 60 to 171 votes.[4] On the other hand, under scenarios involving review of limited sets of ballots uncounted by machines, Bush would have kept his lead. In one such scenario — Al Gore's request for recounts in four predominantly Democratic counties — Bush would have won by 225 votes.[a] In another scenario (if the remaining 64 Florida counties had carried out the hand recount of disputed ballots ordered by the Florida Supreme Court on December 8, applying the various standards that county election officials said they would have used), Bush would have emerged the victor by 493 votes.[b][81]
The emphasis above was added by me... far more media organizations, and a comprehensive analysis, and so forth. How much more extensive can you get, and the result is that Al Gore would have won under any uniform standard at all. And again ... this was all because of the outdated technology. Call it what you want, paper ballots, rejecting by voting machines that counted them, etc. The fact is, the election would have been a lot MORE reliable if it was done with Merkle Trees and private keys, as I said.
And no, I'm not a Blockchain Andy who's completely drunk the Kool-Aid. I often critique Blockchain right here on HN, I think Blockchain holds Web3 back. But the actual applications are very viable (if we move past blockchain as the technology on which they are built) and we'll all be voting from our phones in 10 years. Do you think that somehow voting is one application that won't make the switch from manual paper-based counting to technology, because people can't be "confident of the results" from their electronics?
Germany counts 50 million ballots in a single night (from 18:00 CEST to ~06:00 CEST). Even if the US had the same number of people counting ballots as Germany does, the US should be able to do a full recount in 36 hours.
Paper ballots aren’t the issue. The US just fucks it up in multiple different ways, and would find a way to fuck up electronic voting just the same (if not even more).
And rely on the same people who accidentally voted for Pat Buchanan on the butterfly ballot to understand merkle trees and verify their vote?
We already know how to increase participation if we wanted to - mandatory voting like they do in Australia.
Paper ballots work fine as long as they aren't silly designs like the butterfly ballot or the hole punch. Filling in circles with a pen and then running it through the machine yourself to verify the ballot is machine readable works very well.
You just give them a freaking app, to scan their vote on a website, confirm it's voting for the correct thing, and sign with their private key. Then they can check that their vote was included in the final tally (don't mention Merkle trees). OK?
The real question is, how do you make sure each person has only one vote (see this for example https://www.geekwire.com/2015/the-next-fraud-wave-when-banks...) without revealing the identity of every voter to the government. And also how do you prevent the final tally from being revealed to anyone until it's all ready? That last one is the hardest one (and we fail at doing it in our elections, the media already predicts the winner before the polls close).
…no it's not, where's the contract that says someone gets "the rights" when you transfer an NFT? What if you split the rights up and sell Sony Pictures the movie rights to your ape then sell someone else the NFT?
Even actual NFT ownership isn't respected when it's a hack, it turns out. OpenSea blacklists it and the rest of the ape picture community doesn't start treating the hacker like they own it, even though the data says they can now set a hexagonal Twitter avatar.
I wonder why BTC isn't taxed at the collectible rate (higher than ordinary income) like actual gold investment though.
While the butterfly ballot may have pushed votes to Bush, studies have shown he lost votes when Florida was called premature. Calling Florida before the polls closed suppressed the western panhandle vote which was highly Republican.
https://www.nytimes.com/2001/11/12/us/examining-vote-overvie...
https://en.wikipedia.org/wiki/Bush_v._Gore
New York Times is just one newspaper and often carries water for the Establishment.
That's definitely crypto, but you also just described half of HN.
This is such a bad take that I'll be honest, it makes me angry.
Someone can't be super knowledgeable at more than one discipline? More than two? That's complete nonsense.
> Smart contracts should be considered self-funded bug-bounty platforms.
https://twitter.com/intercoinorg/status/1489106792286150659?...
Neither scenario is good.
https://www.valuewalk.com/2020/02/top-10-biggest-bank-failur...
WaMu, the biggest on the list, didn't require a single cent from the FDIC fund! But again, it would be okay if it did, because that's what it's there for.
I went through the formal process of reversing the charge, and was laughed at over the phone, and made to feel like I was defrauding the bank. The bank was openly hostile to me for suggesting someone had committed fraud with my account. (The item in question? Some religious dolls and expensive perfumes. I am an atheist man with no use for either.) They even had a formal panel where like a dozen people examined the facts. I got a letter from the bank telling me to go fuck myself and that my claims were false. I appealed and they sent me another letter to go fuck myself. Not long after that, the bank rebilled me for the money, closed my checking account, and then showed me another letter from e-Bay where some officer there meticulously, over something like 10 pages, documented that _I_ was the fraud and the fraudster was the real.
This has never happened to me with crypto, because a fraudster can't intercept my private key just by intercepting a transaction. My personal experience with banks is if you're a victim of fraud you'll get a lot of judgement from the bank, they may or may not accuse you yourself of fraud, and in the end they do anything to avoid reverting the charge. If you're lucky they'll just send you a letter telling you to fuck yourself and if you aren't lucky they may refer you to the police to be charged.
Frankly after the piles of paperwork I saw from both the bank and e-bay essentially claiming I myself was the fraud, I felt like it was a losing battle and that their lawyers and legal teams were going to drown me with paperwork. I'm shocked the lengths they went to over $500. If it had been 4x as much money I certainly would have sued.
I'm just kind of meh on the banking system reversibility. The most common frauds I've seen in my friend circle are a few hundred dollars. When the bank can make you wait half a day on the phone just to dispute the charge and then over a month to go through the claim process, while fighting you tooth and nail every step and then suing is maybe break even if you win and lose hundreds if you lose. It starts to look like crypto is a real win in some areas. Being able to sue means little if it's a net loss.
Crypto world has little recourse for any sort of fraud, people rarely keep money on their own wallet, it is usually a wallet managed by the exchange which are vulnerable to technical hacks, frauds and scams and are just as bad or worse than a bank when it comes to service. Even if you keep your money in your own cold private wallet, the private key can be easily lost, so many stories about millions of dollars in BTC locked forever with private keys misplaced.
The issue I have seen is the fraudsters set up their own e-bay store (they set up a second account with a fake you as the customer), and then e-bay is very agressive about defending any charge backs. Even when e-bay knows a store is a fraud, they will agressively defend any charge backs to that store, even when they themselves have shut that store down for fraud. You're not just defending yourself against fraudster, you're defending yourself against an extremely powerful corporation with experts that have boilerplates that drown the bank in 'proof' that the service is rendered.
E-bay has officers who generate a lot of paperwork that exactly walks them through the legal requirements they need to stall and fend off chargebacks from the bank and in practice the bank doesn't have the patience to overcome this. The fraudsters seem to have evolved to either provide the compliance officers the exact information they're looking for, or formed some weird symbiotic relationship where it's easier for them just to go along with the fraudsters than fight it. You'll be shocked at how convincing they are in 'proving' the service was rendered. After 24+ hour on the phone with a bank, months of formal processes and claims/appeals, and continual mocking by the bank you'd be surprised at just how much money they will invest in making it unprofitable for you to get your charge reversed. Hell just _initiating_ the chargeback took me half a working day -- how many people can spare that ? I only did because I had the day off to move.
In short, e-bay has evolved a legal team and process with extensive and expert experience in absolutely steamrolling chargebacks and they use the full force and power of a massive well of knowledge, human labor, and funding they have in this area to crush you, with little regard for the veracity of your purchase.
> people rarely keep money on their own wallet
Well I do
>the private key can be easily lost
It's actually not that hard to memorize a cold storage seed, and you definitely won't forget it if you have money on that account. Hard to lose that and impossible to steal.
But sure it's true, crypto is fraught with fraud and misplaced keys, as well as DeFi hacks and all sorts of other issues.
This is especially true for chains that haven’t had a long history of being attacked and having the right tooling built.
Ethereum isn’t easy to securely develop for, but Solana is too new and untested to be trusted with the amount of money it’s in control of (and that’s ignoring how it’s largely centralized and has gone down multiple times recently).
Which begs the question, why such a humble amount...?
I thought Web3 ideals are "Scam as many people as possible, run away laughing. It's only wrong if you get caught."
I see it happening from both sides (pro/against), but always around cryptocurrencies.
Like stop and think. A peer-to-peer money log with no real world guarantees.
- Cryptocurrency market is a scam.[0]
- It spends inordinate amount of electrical energy that can be better spent maintaining existing bank/credit card infrastructure [1]
- It's a scam[2]
- It contributed to overall graphics card shortage [3]
- It has another scam (NFT) growing on top of an existing one [4]
Have I mentioned it's a scam?
What irks me the most is people are acting as if crypto currency is real/usable or a sane solution for a problem it can't dream of solving.
It feels a bit like yelling "King is naked", but the rest of the populace is "No, it's just spider silk.", and "Would they waste all that effort to just make nothing?"
[0] https://www.singlelunch.com/2022/01/09/an-anatomy-of-bitcoin...
[1] https://fortune.com/2021/10/26/bitcoin-electricity-consumpti...
[2] https://www.theverge.com/22620464/tether-backing-cryptocurre...
[3] https://medium.com/geekculture/cryptocurrency-graphics-card-...
[4] Just use your brain for 5 min and realize that NFTs don't work.
Nothing says low-effort group think than the claim that "NFTs don't work". It is a certificate of authenticity (we know those work as the art world has been using them to sell intangible art for decades) in a spreadsheet (we know spreadsheets work). There is literally nothing there that could possible "not work".
NFTs are based on crypto currency - a scam.
* You get a mined crypto, one with body that's essentially a fancy IOU.
- Alarm bells begin to ring. Who enforces the IOU? The anarchist collective?
* You download the funny art, by clicking the link.
- Air sirens start to blast. How do you know link is secure? Could someone else already got there and download the picture? Is there a way to limit the download number. If no, they can't guarantee a single owner. If yes, can you authenticate. What if link expired? Etc.
* You proudly display your art. Someone right click and save as. They now have your art for $0. Or for hell they might steal your real asset or even the NFT used to verify you own it.
- What is your recourse? Who will believe you own right to online pictures? What court considers NFTs real asset?
* You proudly display your art. Someone right click and save as. They now have your art for $0.
Is this any different from owning a picture now, in the sense that pictures have always been a bundle of bits, which you could freely share across the interwebs since around 1995? People still buy pictures because there's some sensation in "owning" something. You can copy-and-paste a picture without legitimately "owning" it, but you've been able to do that since ~1995.
I don't buy art, so perhaps I shouldn't be the one speculating about these things. Maybe I buy CDs? But those have nice posters and concept drawings -- it feels premium.
I think NFTs lead one to ask what it means to own media in an age where the physical cost of media is $0.
Or for hell they might steal your real asset or even the NFT used to verify you own it.
- What is your recourse?
This is a serious objection. Maybe there's some mechanism you can build on top to deal with it. But that mechanism would be a human court, and we're back to where we started.
And just because most people here agree that anonymous internet users breathlessly shilling cryptocurrency get-rich-quick pyramid schemes here are scammers, doesn't mean it's groupthink. It's simply, objectively, and obviously true, and it's all the irrefutable evidence of scams and crimes like the subject of this discussion that cause most people here to believe the truth, not "groupthink".
It's not groupthink to believe 1+1=2, and casually dismiss anyone who says otherwise.
If you want to wag your accusatory "groupthink" finger at people causing actual tangible damage to the environment and economy, while lying, shilling, pumping and dumping, ripping people off, committing crimes, and laundering money with NFTs and cryptocurrency, then point it at the cryptocurrency shills parroting bullshit talking points. They're the ones all thinking and talking the same, and generating all the hype.
How come the “counter” comments are far more common on HN than the low-effort shilling?
The idiom, "the truth hurts," means that hearing the unvarnished truth makes one experience sadness or other such negative emotions. You are replying to one such truthful comment.
This is a myth. Commenters on HN are good at disguising emotional arguments as reasoned arguments. That's not to say that people don't apply logic here--they certainly do--but don't be fooled into thinking that HN comments are relatively emotionless.
https://news.ycombinator.com/newsguidelines.html
We detached this subthread from https://news.ycombinator.com/item?id=30188256.