🀷🏻 Creamed It

$130m in crypto stolen, very easily | Bitcoin is not decentralised, sit down bro | It's Meta now

🀷🏻 Creamed It

Hello readers, and welcome to the future β€” where we belong. If you're new here: congratulations, you are now trapped.

This week was sort of okay I guess? 🀷. It's hard to tell which way to go when an anonymous hacker steals millions of dollars (maybe they'll use the money to harm children? Or just go on holiday?? Who knows!).

Ahem, anyway, here's what we have to work with:

  • Facebook have rebranded to Meta β€” I thought this was very boring news but many of you reached out to me to tell me about this (I already knew), so I guess it's interesting?
  • A quick look at how Bitcoin ISN'T decentralised
  • A hacker has done the right thing by embarrassing a company who provide flash crypto loans

❗Shocking revelation: Bitcoin isn't as decentralised as you think

This week on Hacker News, an interesting study was doing the rounds. It tells us that a third of Bitcoin is owned or controlled by only about 10,000 people. Don't you just LOVE decentralisation?

βœ‹ Wait, before you answer that β€” here's a few things I'm tired of:

  • 'Decentralisation', as championed by the crypto bro who tries to make the word synonymous with 'good' or 'cool'.
  • The idea that cryptocurrencies in general are anti-establishment. Maybe that was true once, but it's not anymore
  • The fact that enough people 'believe' that Bitcoin is truly decentralised, and thus continue to buy-in to the system

Just like with a lot of new and scary technology (NLP, Deepfakes, AI pizza machines, anything with the word algorithm in it), blockchain technology really benefits from being a black box: hardly anyone really knows how it works, and therefore a powerful few can leverage it to their advantage.

This happens with cryptocurrencies all the time β€” you have to have some level of technical know-how to even buy any, and you have to have A LOT of technical know-how to mine it. But! Don't forget! This already happened all the time with traditional financial products. Do you know what corn futures are? No β€” you think you do, but you don't. A few people on Wall Street definitely know what they are, and that's why they're rich. Do you see?

If you want to read more about how crypto seems to thrive under the veil of decentralisation, please subscribe* to Untangled, a newsletter I edit (which is how you know it's good). The first piece will be about how when something is technically decentralised, it isn't actually decentralised.

*You have a duty to do this, actually, because the more subscribers my clients get, the better they think I am at my job β€” and the more they pay me. Which means I'll have more time to spend writing Horrific/Terrific, your one true favourite weekly tech blast.

🍦 A company called CREAM have just been hacked into submission

Serves them right; CREAM is a dumb name for anything that isn't edible. But anyway, they are a company who provide flash loans with cryptocurrencies. If you think that sounds bad β€” you're RIGHT.

Decrypt have a decent enough description of exactly how flash loans work if you're interested. The key thing is: they are fast, and do not require the borrower to 'prove' that they can pay it back β€” because if they cannot honour the terms of he loan, the money just reverts straight back to the lender. It's all done with a smart contract.

As you can imagine, these lending protocols are... weak. As you can further imagine, hackers like to exploit weak things. In fact, hackers exploited CREAM's weak things three times this year (title of your sex tape).

The most recent hack, which happened on Wednesday, took $130m. This pretty readable breakdown of how the hack was executed explains that actually, the hacker had completed a complex set of transactions which should have given them $1bn in the end β€” but $130m was all CREAM had. Probably because this has already happened to them twice β€” losers.

Why is this happening? Well, it's clear that some think they are 'gaming the system' by profiting from flash loans β€” but are completely unaware of how insecure the whole thing is. So hackers have been able to game the system EVEN HARDER and make even more money. Those who hack have proven this pretty consistently: hacks related to decentralised finance have accounted for 76% of all major hacks in 2021.

Anyway, the point is: the world of finance is a joke, and we will all die under the crushing weight of environmentally taxing crypto transactions, so that a select few players can indulge in arbitrage.

πŸ–€ Two more things before you browse away into cyberspace and out of my heart

The Facebook name change: a lot of you felt the need to take me aside this week and reveal that Facebook (the company) have changed their name to Meta. Bold of all of you to assume I didn't already know. Perhaps you are forgetting that I am always one week smarter than you? Anyway: Facebook have rebranded to align themselves more with the metaverse, and less with whatever this is:

Their new logo also looks like a telecoms company from 2004; probably not a good thing

And now over to Google: shockingly, lawyers at Google have really started to pay attention to AI research this year. After firing Timnit Gebru and Margaret Mitchel, who did nothing but make very good points, Google don't want another controversial media storm, so they're doing what large tech companies do best: use a giant team of lawyers to carefully skirt the edges of reputational damage, by publishing much less AI research.

πŸ’Œ Seeing as you're at the end of this week's Horrific/Terrific, I guess you enjoyed it. Please express gratitude by donating money to me so I can keep doing this. You can share opinions/submit news stories any time on my Twitter or email.