Sarah Holder is a staff writer at CityLab covering local policy, affordable housing, labor, and technology.
CityLab tests your grasp of our virtual currency-filled future.
Last week, Wired reported that the infrastructure security firm Radifirm had identified the world’s first known “crypto-jacking” of an industrial control system: A hacker had evaded security scanners to install malware on a European water utility company’s network. For months, the malware had been running quietly in the background, allowing the hacker to harvest the digital currency Monero.
Using small amounts of otherwise wasted processing power isn’t fundamentally destructive, but “it still wears on and degrades processors over time,” writes Wired’s Lily Hay Newman. When a hacker crypto-jacks a cellphone, that’s inconvenient for an individual. But when the processor they’re degrading runs a water system or power grid, that might be catastrophic.
Radifirm caught the breach well before a problem arose, but attacks like this might increase in frequency. Demand for cryptocurrency continues to grow, and values, while volatile, are high.
So, how worried should we be about this? Here’s a (really) quick primer on what exactly we’re talking about. As financial advisers are happy to tell you, cryptocurrency is, essentially, nothingness: an entire financial system based on what people are willing to pay for pretend digital “coins.” And blockchain (the underlying technology that supports bitcoin, and many other cryptocurrencies) is very nearly the most boring thing in the world: a decentralized, online database that’s ostensibly safer and less corruptible than others.
Nevertheless, both terms have recently been applied to almost every conceivable product, industry, or human endeavor in an effort to attract funders, grab media attention, or just jazz them up. If you slap “The Blockchain” on your news startup, maybe you can resuscitate local news. Post all your content on the new blockchain-secured website Po.et and it’ll never be taken down by a disgruntled publisher-billionaire. Affix “crypto” on municipal bonds and suddenly everyone wants to support affordable housing. What’s next, a Japanese pop band dressed up as Bitcoin, Ethereum, and Ripple called “Virtual Currency Girls”? (Oh, word, they exist. Their first single is called “The Moon, Virtual Currencies, and Me.” It’s … sort of good!)
There’s suddenly a torrent of these kinds of headlines to sift through; some, like the European water company hack, seem like they might affect the real world. Often, though, it’s hard to separate the consequential from the made up. To hone your Blockchain-BS-meter, here’s a quiz: Real crypto stories, or fake news? You be the judge.
1) Bail reform, but make it Bitcoin
Bail Bloc, a project run by the Bronx Freedom Fund and The New Inquiry, allows users to mine the open source cryptocurrency Monero using their excess processing power. Then, it’s donated to a fund that posts bail for low-income New Yorkers. Think of this as the good-guy version of those infrastructure hackers.
2) Ad revenue, shmad revenue: This news site steals your computer’s energy to mine cryptocurrency
Salon, the venerable San Francisco-based news and culture site, is experimenting with a novel revenue stream: It will repurpose the unused processing power of pesky ad-blocking readers’ computers to mine Monero, which means even if you refuse to look at Paid Content, you’re paying for journalism. Think of this as the corporate version of the good-guy version of the infrastructure hackers.
3) You can no longer return your decades-old L.L. Bean camping gear, but now the company can track you as you languish in your leaky tent
Many people are very angry about L.L. Bean’s decision to end their beloved unlimited returns policy and replace it with a year-long warranty. Some are even suing the company over it. But L.L. Bean needs to save some cash, because they’re investing in implanting their outerwear with sensors that can track “temperature, frequency of wear and number of washes,” to better understand their users’ wearing habits. “If we see a high return rate, we’ll analyze why,” a company representative told the Wall Street Journal. Code for: “We’ll know exactly how many times you wore those Bean Boots.”
4) Truffle-hunting pigs are mining for Bitcoin—and the ASPCA isn’t happy
In the cryptocurrency sphere, bitcoin “mining” just means running software and solving coding puzzles to “release” new digital coins. So far, no pigs have been involved.
5) The Real Hero(ine) of the #MeToo movement? Definitely blockchain
Last month, a Dutch blockchain company proposed an app called LegalFling that would allow two parties to sign off on a sexual encounter before it happens (and revoke consent, even in the moment, with the [un]ease of a swipe). No longer will people “misread” signals of “no” as signals of “yes,” the founders say. Why? Because blockchain! “Get explicit about sexual consent,” the site reads, sexily. “Secured in the blockchain.”
6) Blockchain will prevent mass shootings, because human politicians can’t be bothered
Kind of true!
Samantha Radocchia, co-founder of blockchain company Chronicled, has proposed using blockchain-verified supply chains to help track gun purchases and movements across state lines. The current “no-buy” databases of convicted domestic abusers and those with mental illness have been routinely error-ridden, and ignored—but on the blockchain, Radocchia says, fewer bad actors will slip through the cracks.
7) The Winklevoss Twins couldn’t stop Zuckerberg, but they can solve voter disenfranchisement
On Twitter this week, @conorsen proposed a redistricting fix Eric Holder never tried:
When districts are drawn on the blockchain it won’t be possible to gerrymander anymore.— Conor Sen 🥌 (@conorsen) February 19, 2018
He was kidding. That doesn’t make any sense. It’s not that maps aren’t drawn on sleek, secure servers; it’s that they’re drawn along partisan lines to unfairly shape election results. The blockchain cannot fix this. But even if the Winklevii don’t use their massive bitcoin investments to fix partisan redistricting, in low-tech courts, Supreme and otherwise, the tides may indeed be turning.
8) Area man says Chuck E. Cheese tokens are Bitcoin, makes bank
False, but it will probably happen eventually.
This dude didn’t really take round pieces of plastic from a sticky pizza-arcade and scrawl B’s on them in permanent marker thereby scamming people out of $1 million, as the satirical website Huzlers.com claimed. But so many people believed he did! Maybe that’s because they know that they have no idea what a bitcoin looks like, which, in turn, is because bitcoin, deviously, isn’t a coin at all.
If you bought a Chuck-E-Cheese coin and thought it was a Bitcoin, you kinda deserve what you get. 🤣 pic.twitter.com/9dgGbxgZP4
— Jason Pollock (@Jason_Pollock) December 18, 2017
9) If you hate international sanctions, you’ll LOVE cryptocurrency
Venezuela and Russia are in a race to create new, state-sponsored digital currencies to sidestep U.S. economic sanctions. Using Petros and crypto-rubles, respectively, the countries would be able to track and tax transactions to prop up an inflated currency (in Venezuela’s case) and provide more control to Putin (in Russia’s case). Fake money = no rules!
10) Trump Administration proposes replacing SNAP with flavored Bitcoins delivered in a box to your home
False, but honestly that’s not SNAP’s worst-case scenario at this point.
11) Research shows dinosaurs discovered Bitcoin first—and it killed them
In December, Grist’s Eric Holthaus reported that “each bitcoin transaction requires the same amount of energy used to power nine homes in the U.S. for one day.” Given current growth trends, by February 2020, the amount of energy required to mine virtual currency—which, remember, doesn’t exist—will be as much as the entire planet uses today, making the dream of a carbon-neutral future more unattainable than ever.
12) Elon Musk just bought Mars for 5 Bitcoins, then blew it up to harness its powers for Bitcoin mining
Does anyone really know what SpaceX is for?