CoinDesk exec on 'one of the biggest hacks in crypto histroy'
This morning, bitcoin had a strong month gaining better than 13. In the last month, the cryptocurrency industry experiencing whats reported to be the second largest crypto heist on record. Meanwhile, hackers stole cryptocurrency that is now worth over 600 million dollars from the ronin network thats the host of popular blockchain game axi network joining me right now is the coindesk chief of staff of content, pete paschall pete great to see you thanks very much. What do you know about this hacking and what it tells us about the crypto industry yeah, so uh? This is uh very uh, one of the biggest hacks in crypto history. I think its like the second biggest um. So what it definitely shows is that you know theres one, not all blockchains are created equal right, so its very its an interesting thing that this is has more to do with the hack on the poly network as opposed to um or sorry. The actual infinity network. As opposed to you know a hack on some like a primary blockchain like bitcoin or ether right, so this is uh. You know this. The theyre still working out the mechanics of it but its. It shows that, like once you get further and further away from your core crypto products, things start to get a little dicey. Now that said, recently weve seen uh the feds, you know put big big charges in the bitfinex hack from 2016, which was another big crypto hack, and there was the the poly pack, which is the one i was thinking of, which was the biggest one in history.
A lot of those funds were reversed, so i like in terms of the the them being stolen. So what what we see is like a lot of people assume that you can get away with this, because its crypto, but actually the feds and uh analysis companies are getting really good about tracing these hacks and seeing that the people who perpetrate them are brought to Justice, its getting better and better all the time yeah. Is this just a way, though, to to commit crime, and is it easier with crypto? Well, its you know, yes, and no, it really kind of depends on what the blockchain is youre talking about and what security protocols theyve put in place now. Obviously, security is sort of inherent to any blockchain, to some extent its its on the chain, its seizure resistant, um, its decentralized. There are a lot of aspects that you know in in very fundamental ways: make crypto more secure than uh traditional finance, but it all comes down to how its managed and how the the forces that are, you know controlling all these things from working together. Uh have have they closed all their back doors. Have they uh ensured that encryption is at every part of the chain? Um? And you know, if does some? Is there an insider with special knowledge? So i mean again, the thing about crypto is like to some extent. No one understands it fully uh and you know if someone finds that that door, you know youre in trouble.
Let me get your take on the executive order from president biden. Two new crypto legislations are underway: senators, loomis and gillibrand working on a bipartisan plan, which is supposed to clarify a regulatory framework for crypto congressman stephen lynch also introduced a bill thats pushing for electric electronic money, not on a blockchain. So lots of moves to go digital here for digital currency whats, your reaction to the legislative backdrop yeah, i found the last one. You mentioned one of the most fascinating, so the idea that there is a recognition now that electronic money is probably a good thing and certainly probably a a a place the united states has to get to eventually. But the idea to do it without a blockchain uh has some interesting disadvantages and advantages. Obviously you lose the integrity of the blockchain, but then you dont need the network access. You can even do transfers completely offline uh of this digital currency, presumably over uh say like a bluetooth connection. Thats only local um thats done preserves one of the fundamental aspects of cash in an electronic way such that it is a hundred percent private. If you have a briefcase of cash, you can give it to someone. You know whether its a back alley somewhere or a boardroom uh that is not uh recorded anywhere, except between the two people. So preserving that aspect is very, very interesting. Uh, arguably, like certainly crypto, does that, but you need the network access fundamentally to do any transaction, but the but the broader go ahead.
Yeah! No, please finish continue. Oh just the broader landscape. I see a lot more sophistication in all the legislation that you mentioned from the executive order to the bills, to some of the more interesting crypto regulations that are pushed through in europe. One of the things that the european legislation considered theyre, actually not putting this in one of their uh. Their broader regulatory framework for crypto is a recognition between proof of work, which is what bitcoin uses and consumes a lot of computing power for its uh verification mechanism versus stake, which is what uh some of the newer blockchains use, which uses a lot less uh has A lot less of a green footprint now that didnt make it in their legislation, but there is a growing sophistication in legislative proposals about finding the differences, even between cryptocurrencies and the technologies that support them. So theres kind of a positive educational aspect to everything that were seeing that that makes sense, nancy tangler jump in here. Oh thanks, maria um, so listen pete. I a lot of people, and i dont know that you were one of them have described crypto in the past years as kind of a licked liquid gold or a digital gold. Sorry and yet, in this recent environment, we saw crypt uh the cryptos, acting more in tangent, with the nasdaq and risk assets. What do you tell retail investors who are interested in getting exposure yeah its a good point? Everyone um has sort of their take on bitcoin and crypto and what it sort of mirrors more properly, whether its gold, whether its equities, whether its currencies and the fact is it – has aspects of all and the fundamentals, even though its uh, 12 or 13 years old.
At this point are still being figured out um, so there was a long for a long time. Bitcoin was claimed to be an inflation hedge, a good hedge against inflation. Well, you look at the inflation that weve had over the last few months and we can see that that probably isnt holding true at least not yet. You know well see what happens with the rest of the year with the the rate increases, but uh bitcoin and some of the other more mature cryptocurrencies are starting to mirror more traditional patterns of the market uh at least so far, pete its great to have you.