Binance, the biggest crypto exchange by volume, was hacked on Tuesday. The hacker took $40 million or 7000 BTC.
Binance had a chance to recover these funds. They could cut a deal with the majority hashpower miners. The miners would reverse the chain and gain a share of the stolen money.
Binance this time decided not to make the deal with miners. And as time goes on, the attack becomes harder. But all it took was a private phone call. The majority hashpower lies under control of a handful of men. They can collude and reverse the chain.
Truth is that reorgs are not prevented by the Bitcoin protocol (except against low hashrate mining coalitions), but instead by the social, legal, and political reality of the Bitcoin community
— Vlad ‘ETH is not money’ Zamfir (@VladZamfir) May 8, 2019
We got lucky this time.
The Binance event has shaken the core of Bitcoin. The main criticism of Ethereum is now valid too for Bitcoin. In July 2016, Ethereum reversed a $50 million hack of the DAO smart contract. This made many angry, that Ethereum can be changed. This was a main critique made by Bitcoin against Ethereum. But the DAO hack blockchain reversal could also happen on Bitcoin.
For more than two years now, I have over and over tried to push the point that the crypto movement is about more than just technology. It is also about politics.
The Binance episode shows us that the Bitcoin protocol is not only protected by technology, but also by political consensus.
We have ignored the social fabric that gives the crypto project its power. We have focused on magic tricks hoping to be saved by the next innovation. But no new technique can save crypto.
The problem cannot be reduced to technical ideas such as a decentralized market, p2p exchange or instant transactions. It is much deeper. We tried to engineer the perfect system. A rube goldberg machine, where human robots strive for fast financial gain. And in exchange, the project has been populated with mass men with a slave mentality that can only think on the level of moon memes. All the good people are moving on because we no longer offer the future.
And it has fostered a greedy penny-pinching mindset where people cannot think beyond their own quick self-interest or project brand name.
Our project is to open academies to train hackers able to work on projects which are critical to crypto’s survival but don’t have direct financial reward. These people have to be hacker philosophers, multi-disciplinary renaissance hackers. When I go to any crypto conference, there is a huge number of skilled idealistic young people looking for a place to direct their energy. We must make use of this raw material.
And many times over the last year I met with multi-millionaires about this project. They had no interest in putting $10k into something that while it doesn’t directly benefit them, it is the only hope to save crypto from certain death. But they were super interested to invest 100s of thousands into nonsense projects that will make profit in a few months. We are in a sinking ship, and everyone tries to climb on top of each other to get to the top.
Imagine for a second this gift that has been given to us. What a massive change could happen. Why do we think small?
“Bitcoin is based off technological consensus” they say. But who makes the technology? How you name your function, the processes that allow new code in, even the atmosphere of your discussion all shape how the technology evolves. It is never static. Bitcoin is more than rules. It is a movement, an ideology.
The longer we ignore this the worse it will get. Last year at Bitcoin’s peak of $20k, I called that the project was heading for failure. We have since then suffered the worst market crash in the history of crypto. Ideas shape how the technology evolves. People are waiting for the up. And there might be bumps. But unless the content is not there, there will be no growth.
What inspires people to create ideas? Not money. Destiny, vision, and purpose are the fuel of history. We are technologists. We have power to shape the world. We have been given the chance to overthrow the system of global finance. Why think small? Why waste this moment? Imagine big.
Our goal is to spread across the world, anonymous digital black markets. Markets outside state control. No control of the economy.
First, we do not need the help of global capital or regulators. We must declare our total and complete opposition to the old order that we are going to replace.
Second, we must start to explore the realm of ideas, philosophy of technology, global geopolitics, history of computers, and put these together to paint a vision of where we’re going and the steps to get there.
Third, we must think beyond our own little place in the present to where we can get in the future. We must find that strength and will to overcome ourselves, and aspire towards a big goal. Grow strong. Nourish our beast. We are an energy. Inside us is a seed.
There is lots of work. We need the wikis, exchanges, markets, currency, financial instruments, political decision-making tools and much more – all of them dark and p2p.
The biggest letdowns were the financial crises that presented themselves. We were not prepared to make use of them. We could not move quickly to profit from them. Instead, they passed by (Greece, Iran, Venezuela) and became news memes.
But the good news is, that the contradictions of the system are growing. It cannot sustain itself. Already nationalist and religious extremist groups are agitating to grow the cracks and then move into the vacuums. This system of western-led finance-capital-state matrix cannot continue. It will collapse.
And if we have made the groundwork, when the time comes, we will be ready to summon our beast. We are the opposition.
Special thanks to Taylor Gunnoe, @cryptosleeper, who inspired and edited this article
Pins and string image via Shutterstock