Crypto News: Testing BTC in El Salvador, Yat Siu and hacker negotiations


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Magazine by Cointelegraph – December 27, 2022

This week, Cointelegraph speaks to Yat Siu, explores whether BTC can survive grid blackouts and tries to live off BTC in El Salvador.

What it's actually like to use Bitcoin in El Salvador

I attempted to spend two weeks traveling in El Salvador, living on Bitcoin. I tried to pay for every single thing with Bitcoin, or satoshis, small amounts of Bitcoin. Spoiler alert, I failed.

Outfoxed by car hire companies (fortunately my car of choice was not a Fiat); stubborn restauranteurs, a parking meter, pupusas and a fancy dress shop where I was obliged to purchase a multicolored wig with a $5 bill, I could not survive in "Bitcoin Country" on Bitcoin alone.

So, where did I go wrong? How did this happen? Isn't El Salvador supposed to be Bitcoin Country? Is Bitcoin broken? Am I a scammer?

First up, there's no denying: El Salvador is unashamedly a Bitcoin destination. From Bitcoin conferences, big-name Bitcoiners, ubiquitous "Bitcoin accepted here" signs, a laser-eyed President and oodles of Bitcoin investments streaming into the country like transactions into the Bitcoin mempool, the nation is the first and greatest sign of Bitcoin adoption worldwide.

Can Bitcoin survive a Carrington Event knocking out the grid?

"In a massive solar storm, which would be hugely damaging to a modern economy's infrastructure, the blockchain parts might well be the only parts that survive." — Jason Potts

What was the Carrington Event?

In a November 1859 meeting of the Royal Astronomical Society, British astronomer Richard Christopher Carrington reported to the esteemed scientific body that "in the forenoon of Thursday, Sept. 1, in taking my customary observation of the forms and positions of the solar spots, an appearance was witnessed which I believe to be exceedingly rare."

The phenomenon caused brilliant auroras across the globe, some as far south as Cuba, that were so bright observers were able to read newspapers by their light at night.

It was the most intense geomagnetic storm in recorded history, likely the result of a coronal mass ejection from the sun colliding with the Earth's magnetosphere — and one with worrying implications for the cryptocurrency industry were it to happen again today. A storm of such intensity would have the potential to affect the majority of electrical systems in use today: satellites, internet service providers, power supplies and all forms of communication.

Should crypto projects ever negotiate with hackers? Probably

"A highly profitable trading strategy" was how hacker Avraham Eisenberg described his involvement in the Mango Markets exploit that occurred on Oct. 11.

By manipulating the price of the decentralized finance protocol's underlying collateral, MNGO, Eisenberg, and his team took out infinite loans that drained $117 million from the Mango Markets Treasury.

Desperate for the return of funds, developers and users alike voted for a proposal that would allow Eisenberg and co. to keep $47 million of the $117 million exploited in the attack. Astonishingly, Eisenberg was able to vote for his own proposal with all his exploited tokens.

This is something of a legal gray area, as code is law, and if you can work within the smart contract's rules, there's an argument saying it's perfectly legal. Although "hack" and "exploit" are often used interchangeably, no actual hacking occurred. Eisenberg tweeted he was operating within the law:

"I believe all of our actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they are."

The Metaverse is awful today… but we can make it great: Yat Siu, Big Ideas

Owning assets in a video game seems like a pretty natural concept, so why have so many gamers in the U.S. rejected NFTs outright?

Yat Siu, co-founder of Animoca: I think the reason why so many in the West, particularly in the United States, are rejecting NFTs is not because of the fact that NFTs give you ownership. I think the rejection is partly due to shifting sentiments about capitalism. For the first time in my life, I'm witnessing a very strong anti-capitalist sentiment in America.

The consumer in Asia, however, looks at capitalism as a net good. Things like democracy and property rights are fairly new concepts. Only four decades ago, South Korea's economy was the same size as North Korea's. Now it's among the top 12 to 15 countries in the world. Consumers in Asia have seen capitalism work for them.

In the U.S., capitalism, especially in the past few decades, hasn't worked in the same way. It has exacerbated inequity. In this context, crypto, which NFTs are part of, risks becoming viewed as a rich man's toy that spreads the same kind of inequity in the virtual world.