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There’s always another horrifying crypto hack going on – TechCrunch


Welcome back Chain reaction.

Last week, we looked at the short-term future for crypto gaming as VCs don’t know where the consumer bets are. This week, we’re looking at hardware wallets and the endless journey towards feeling safe in the crypto world.

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there’s nowhere to hide

A weekly dispatch from the crypto editor’s desk TechCrunch Lucas Matney:

The crypto world can be a cruel and unforgiving place, and while crypto VCs and hedge funds are happy to bail out institutions, sometimes consumers plunging into the space find themselves abandoned because of the cold. This week, a couple of high profile hacks cost crypto investors millions, but it’s the smaller, more mysterious one that is likely to leave new buyers clutching their private keys. and pray for the best.

Putting money anywhere is an exercise of trust, which is sometimes amusing when the word “distrust” is already a leading phrase in crypto religious creeds that investors are familiar with. capital used to achieve transformation. All users have to do is keep their private keys nearby and they can trust that their funds will always be there without having to place any trust in a traditional financial institution. . But consumers are discovering some fine print long known for that promise.

This week, thousands of Solana users logged into their crypto wallet app to discover that all of their funds were gone. Many of these users claim that they haven’t used the wallet for weeks or months, ruling out some sort of mass signature of a malicious contract. While this is ultimately just a low-key seven-figure hack, the mystery is still remarkable. At the outset, users weren’t sure if this was an attack on the underlying Solana network or an underlying service provider that many wallets rely on. Amid all the confusion, wallets kept getting depleted eventually emptying the contents of over 8,000 individual accounts.

Investors in Solana ecosystem (network founder dropped some Twitter picks retweet) complains that the media is focusing more on mining the millions of unique numbers when the Nomad bridge was hacked for $190 million just a day earlier. But it is the nature of the attack that is scarier than the dollar amount.

While users on the wallets reported issues, the issue was caused by a vulnerability in the Slope wallet where the user – unbeknownst to the user – was writing their private keys to the backend, leaving them vulnerable bad actors if they ever enter the key into the app mobile device. This story could serve as another trust cut-off point in the system for new users, who may think their funds in wallets are more secure than those of a centralized exchange. But the longtime crypto users shrugged and indicated that this is another reason for users keep their money in so-called hardware wallets – physical devices that store users’ private keys and dramatically cut down on the number of attack vectors available to hackers beyond human error.

Now pushing every new user to buy a ~$100 worth of hardware wallet to actually secure their assets is clearly not the ticket to widespread adoption in the near term and it seems to be a rule that the most profound people in space still cling to. While many of the richest people in crypto are embracing strategies that promote security above almost everything else, it seems many of them are investing and promoting projects that emphasize speed and engagement. seamlessly at the expense of security. Users who find their way into the rails of flashy consumer apps may find that the initial barriers to entry for cryptocurrencies were so steep for a reason and that wealthy users buy carbonated computers. and keep their keys on a piece of paper that has a lot of history framing their paranoia.


newest group

Chain reaction is back again this week and better than ever! We announced two big changes to the team this week. First and foremost, we have a new co-host, Jacquie Melinek, join us weekly to talk about the biggest headlines on the web3. Jacquie is a great friend of ours and a reporter for TechCrunch +She’s eager to get into the weeds so we can help clear things up about crypto.

Second, we’re splitting our weekly show into two separate episodes: a feat of weekly news segmentation. Jacquie, the first of which debuted today, and an interview segment hosted by Anita and Lucas. Stay tuned for next week’s latest interview episode in which we spoke with Uniswap COO MC Lader.

For this week’s news, we’ve unpacked two premium hacks that happened in the first two days of the month (phew). We also discussed Robinhood’s latest round of layoffs and a $30 million fine the company paid to New York regulators.

Subscribe to Chain Reaction on Apple, Spotify or alternative podcast platform of your choice to keep us updated on a weekly basis.


according to money

Where startup money is moving in the crypto world:

  1. AO Labs raised $4.5 million from investors including Balaji Srinivasan and Sandeep Nailwal for its Spacebar web3 gaming platform.
  2. Web3 “green” platform One of closed a strategic round of over $8 million from investors including Amex Ventures.
  3. Digital Asset Derivatives Company OrBit raised $4.6 million from Matrixport, Brevan Howard and others.
  4. Cryptocurrency Credit Protocol Knife debt raised $3.5 million for a seed round led by Dragonfly Capital.
  5. CenterA crypto infrastructure startup, has raised $11 million in a seed round from investors including Thrive Capital, Founders Fund, and Volt Capital.
  6. Gary Vaynerchuk’s NFT Project, VeeFriendsscored $50 million in a financing led by a16z.
  7. Quasarsa Cosmos-based DeFi protocol, has raised $6 million in seed capital from Polychain, Blockchain Capital, and others.
  8. Stadium Livea super-diversified fantasy sports startup, raised $10 million for its Series A from KB Partners, Union Square Ventures, Dapper Labs, and others.
  9. Decentralized data warehouse provider Space and time raised $10 million for its seed round from investors including Framework Ventures and Digital Currency Group.
  10. Fitness apps play for money Sweatcoin completed a $13 million fundraiser, including a privacy token sale, from investors including Electric Capital and Jump Crypto.

of the week on web3

Weekly window of web reporter thoughts Anita Ramaswamy:

It seems like the right time to talk about security in crypto given the recent hacks that affected both the Nomad crypto bridge and the Solana ecosystem. It is becoming increasingly clear that no matter how many guarantees a cryptocurrency company offers about its security standards, investors should always be watching their backs. The pain could be even more acute for NFT holders, who risk losing millions of dollars in value in a single swoop if one of their expensive JPEGs is stolen – think what happened to actor Seth Green and his kidnapped Bored Ape.

There are a few different options for how people can safely store their cryptocurrency these days, and they all have their trade-offs. A “hot wallet” is connected to the Internet, which makes it vulnerable to outages or connection problems. Furthermore, a lot of hot wallets are operated by centralized entities, such as exchanges that hold users’ keys on their behalf – a transfer of power that many crypto users don’t like to grant. . Meanwhile, “cold wallets” are considered much more secure, but in relation to hard-to-use, unwieldy hardware that can be misplaced as easily as a “seed phrase”, which is a password used to unlock crypto wallets.

Upscale Founder and CEO Alex Taub, who we had in last week’s group, says his startup has a user-friendly solution that allows people to keep control of their own keys digitally without having to compromise on security. It’s a unique solution that comes at a particularly opportune time. For details on how it works and why it is different from what is already on the market, check out my article here.


TC + analysis

Here are some of this week’s crypto analysis available on our TC+ subscription service from our senior reporter Jacquelyn Melinek:

Solana’s agile approach to crypto is attracting developers, despite the hiccups
While the crypto market hasn’t always been as vibrant and blossoming, several prominent players in the industry, including Solana co-founder Raj Gokal, still have optimistic growth prospects – at least. especially on their own projects. Gokal said that despite Solana’s recent issues with 8,000 hacked wallets on Tuesday, the layer 1 blockchain has between 15 million and 20 million monthly active addresses, some of the highest in the crypto industry. death. “One question we get a lot is how does the market affect the speed of development and the speed of construction?” His answer? It’s not, really.

Why education is key to preventing hacks like the $190 million Nomad mine
After losing nearly $200 million in a security mine on the Nomad cryptocurrency protocol, security experts have emphasized that more education and security protocols are needed to protect the web3 community from hacker. As the crypto ecosystem grows larger over time, inter-chain interoperability will also continue to grow, “at profound levels, focused on security and decentralization,” said Daniel Keller, co-founder at Flux, told TechCrunch. “However, it is important to pay attention to security, not just speed, as we push DeFi products to the masses.”

Tiffany and Gucci’s involvement in crypto is a balance between fame and revenue
Is crypto integration by household brands and sports teams evidence of the growing use cases for digital assets and cryptocurrencies – or more of a Marketing ploy? This week, Tiffany & Co., Gucci, and FC Barcelona are all getting deeper into the crypto space with partnerships in the world of digital assets. But do these partnerships really make sense for the crypto ecosystem? Several market players have shared their thoughts on the financials, risks and business behind these new integrations.


Thanks for reading! And – again – to get this in your inbox every Thursday, you can subscribe to TechCrunch’s newsletter page.





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