Hodler's Digest episode (Apr 28, 2019) covers a week of crypto news: a security report by Independent Security Evaluators revealing 732 weak Ethereum private keys and a prolific "blockchain bandit" who drained funds (interview with researcher Adrian Bednarik); Samsung reportedly experimenting with an Ethereum-based blockchain and possible native token (commentary from Korean blogger Spunky Hwang); and a series of shorter items including John McAfee's claims about Satoshi, Lil Pump accepting Lightning payments, and Disney's potential connection to crypto via a Nexon/NXC deal. The program mixes technical reporting, industry rumors, interviews, and lighter pop-culture crypto stories.
Chapters
So it was a pretty busy week in crypto. Besides the fact that tons of people were arrested for sim swapping and stealing millions of dollars in cryptocurrency, seems like Nike is getting into the crypto game with their trademark of the phrase crypto kicks. Also, Lil Pump, the American rapper is allowing his fans to pay for his merchandise on his merch store with the Lightning Network. Cheers love. The Hodler's Digest is here. I'm Molly Jane and here is your market update. Should I mine crypto with a diamond pickaxe? James Howells, an IT worker, famously lost $127 million in a cold wallet after throwing away his hard drive, which ended up at the garbage disposal. However, there are many other ways of losing big in the crypto market. Just ask the founder of SoftBank, Masayoshi Son. Son inherited Fortress's Bitcoin reserves in 2017 on the advice of Peter Bridger. Bridger is the co chairman of Fortress. At the time, the reserves were worth around $150 million. Sun eventually sold during the crypto winter in 2018, losing $130 million. This is nothing new as sun is known for using his gut instinct and investing fast. 35 minutes after meeting Alibaba founder Jack Ma, he greenlit a 200 million dollar investment in a startup that grows vegetables indoors. Other big losers include Ripple's Chris Larsen, who lost $44 billion, and the Winklevie, who lost over a billion in the crash. You shouldn't feel too bad for Masayoshi Son, who has a network of over $24 billion already. The folks you should feel sorry for are James Howells or journalist Derrick Rose, who at the height of the bull run was worth about $7 million after investing his life savings into crypto rather than selling. He had ambitions of owning a yacht, but then came the crash and he lost everything. He later said that he had no regrets. The mainstream media will tell you that sun should not have taken on the bitcoin reserves in the first place. I would say that his only mistake was to panic sell and not to.
HODL.
1 in 115, quadrivigtillion. This denominator is equal to the number of atoms in the universe and indicates the probability of guessing one of the crypto private keys randomly generated on the Ethereum blockchain. However, that is not always the case. As the security firm Independent Security Evaluators found out. There are a number of keys which are way more simple to guess and malicious actors are taking advantage of their vulnerability by scanning 34 billion crypto addresses a tiny fraction of the Ethereum network. The researchers discovered 732 of these easily guessable private keys, whose vulnerability is largely due to faulty codes and faulty random number generators. The researchers found that a single individual who seemingly adopted their same scanning methods to uncover weak keys siphoned off 45,000 Ethereum from 12 addresses. This individual, dubbed the blockchain bandit, amassed a fortune worth $50 million when the value of Ethereum was at its peak. The cryptocurrency bandit appears to be the biggest fish among a large number of crypto thieves who are using sophisticated automated tools to scan the Ethereum blockchain in search of weak addresses ready to be looted. The researchers could not identify the cryptocurrency bandit, nor the wallets responsible for generating the flat keys. Still, as the researchers pointed out, this is an important lesson for both Hodlers and wallet developers. The former should be careful with the wallet they choose, downloading them from trusted sources. The latter should carry out accurate code auditing so as to protect the security of private keys. We reached out to Adrian Bednarik, researcher at ice, asking him to comment on the findings. So, Adrian, how exactly is this blockchain bandit stealing the cryptocurrency?
This person most likely has either a listener node or a node that's participating in the Ethereum network. And as soon as he sees transactions come in where he has knowledge of the private key too, then he immediately just sends a request to transfer any money out. He's basically doing a check in code saying, hey, if this address is in my address list of keys where I have the private key to, he immediately sends it out. So the computational time is probably in the microsecond.
I see. All right, I get it. So your report takes into account a tiny fraction of the existing private keys on the Ethereum blockchain. Are you planning then to continue your research or are you done here?
Like it took an entire day to scan 32 billion keys as we go forward, yes, we will continue looking at blockchains and we will improve our scanning method. We will move our scanning method to use GPUs, where we'll be able to scan 32 billion keys within a matter of seconds. We will expand with more efficient scanning and then we'll expand to Bitcoin, Ethereum, and other popular blockchains.
Korean tech giant Samsung is developing its own blockchain platform and is also considering the launch of a native crypto token. At least that is what a person familiar with Samsung's internal situation told media outlet CoinDesk. Samsung's cryptocurrency division is allegedly working on a digital currency built on the Ethereum blockchain. The project is still at an experimental stage. According to the source, the direction of the coin still has to be decided, but it will allegedly incorporate elements of both private and public blockchains. Samsung has not confirmed this information, but the interest of the company in crypto is, is evident. Just take a look at its recent 2.3 million euro investment into crypto custody and hardware startup Ledger. Also in February, the company unveiled the latest model of Samsung S10 featuring an inbuilt cold wallet. However, Samsung's exploration in the crypto space could be slowed down by Korea's strict crypto regulations. We reached out to popular Korean crypto blogger Spunky Hwang, who seems to have a quite skeptical view on the issue.
First of all, I did not hear anything about a Samsung coin. I think this is more like going around in the western world. But being a Korean in Korea, we're not aware of a Samsung coin in any way. I believe this. It is a rumor because big companies like Samsung, they're heavily watched by the government. The government does not like cryptocurrency in Korea. They're not like making it illegal or anything, but they're putting a lot of pressure into known institutions to not to not really get involved. So they just, they're kind of, so they're getting involved through third parties. They never really use their own brand to represent them. They never really get involved. If Samsung ever does approach, make an approach to crypto, it's gonna be, it's gonna, it's, it's gonna be done to make a real use case. So not just like speculation and hype and pumping and dumping and stuff like that. They have too much to lose. Like let's say Samsung, even they, they work on like, like a 20, 30 million dollar market cap cryptocurrency that's out there in the market or something like that. Right. They have nothing to gain from that. 20, like, like 20, $30 million even 100, it's nothing to them. You know, it's, there's such a big company and by doing that they're just gonna alert the government. They have too much to lose by doing that. So if they ever get into crypto, it's gonna be for a real use case, which is the cryptocurrency and the blockchain technology that they're implementing into one of their platforms. It has to make it better than what it is already now. It will be the only reason.
And now let's check out some more serious news from our host Maxwell.
In other news this week, the gullible among us were even closer than ever to finding out the real identity of Satoshi Nakamoto. John McAfee. John claimed to know the true identity of Satoshi. He said finding Satoshi was a piece of cake for me. You know, because one look at McAfee and anyone would think Sherlock Holmes, apparently the alleged millionaire murderer and rapist, later claimed to consult his lawyers, who said that revealing Nakamoto's identity might complicate his case against being extradited to the U.S. he also mentioned Satoshi wasn't happy about his intentions to out him, but he gave us some clues. One, Satoshi lives in the US and two, he is not Craig Wright. So that really narrows it down. Who else lives in the US and is not Craig Wright? Let us know in the comments. He said no time for nonsense because time is very precious for John. It's not long now before the antivirus guru eats his own. But how does McAfee know the identity of the father of bitcoin? Well, we don't know. But probably he doesn't. And we are all just pawns in his grand game of craven self promotion. After all, he is John McAfee.
Boring. Boring. Oh, this is something interesting.
Lil Pump remember this or wish you didn't. If you can understand him. Maybe you heard that Lil Pump started accepting bitcoin for his online merch. Hey, who else is that insane to use bitcoin to pay for merch? Cointelegraph. Check out our store. The link is in the description below. Now back to Molly.
When you wish upon a star, you can get the deal that you desire. Disney, the purveyor of dreams for Star wars and Frozen fans alike, is on a short list of one, apparently for a 98.6% stake in Nexon, the number two online games publisher in the world, should the $13.2 billion deal go through, Disney would also have a hand in the crypto world via NXC, which owns 47% of Nexon. NXC's investment structure bought Bitstamp, the world's oldest crypto exchange, for $400 million and also has a controlling stake in Corbitt. Given that Disney's only foray into crypto was Dragon Chain, an ill fated ICO in 2017, it is unclear whether Disney will hold onto its crypto portfolio or if you saw the line for the latest new Star wars, which Disney produces you know that they make a good product. And this is why the chairman of NXT Corporation, who was so willing to sell his 98.6% stake back in 2015, said what? What I envy the most about Disney is that they do not force kids out of money. Consumers gladly pay Disney. Nexon has a long way to go. Some people hate Nexon to death. If Disney did keep their crypto portfolio and let bitstamp show them the world, it might be a wise decision. Last week, bitstamp gained the rarified honor of a bitlicense in order to operate out of New York. If Disney made a crypto franchise, what would it be called? Beauty and the Bitcoin, Snow White and the seven Altcoins Comment below. And as always, remember to like subscribe and hodl cointelegraph like subscribe and Hodl.
