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olko71 · 3 years

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New Post has been published on All about business online

New Post has been published on http://yaroreviews.info/2021/05/colonial-pipeline-ceo-tells-why-he-paid-hackers-a-4-4-million-ransom

Colonial Pipeline CEO Tells Why He Paid Hackers a $4.4 Million Ransom

The operator of the Colonial Pipeline learned it was in trouble at daybreak on May 7, when an employee found a ransom note from hackers on a control-room computer. By that night, the company’s chief executive officer came to a difficult conclusion: He had to pay.

Joseph Blount, CEO of Colonial Pipeline Co., told The Wall Street Journal that he authorized the ransom payment of $4.4 million because executives were unsure how badly the cyberattack had breached its systems, and consequently, how long it would take to bring the pipeline back.

Mr. Blount acknowledged publicly for the first time that the company had paid the ransom, saying it was an option he felt he had to exercise, given the stakes involved in a shutdown of such critical energy infrastructure. The Colonial Pipeline provides roughly 45% of the fuel for the East Coast, according to the company.

“I know that’s a highly controversial decision,” Mr. Blount said in his first public remarks since the crippling hack. “I didn’t make it lightly. I will admit that I wasn’t comfortable seeing money go out the door to people like this.”

“But it was the right thing to do for the country,” he added.

Joseph Blount, the Colonial Pipeline CEO, said the cyberattack would ultimately cost the company tens of millions of dollars.

Photo: Colonial Pipeline

In return for the payment—made in the form of bitcoin, about 75 in all, according to a person familiar with the matter—the company received a decryption tool to unlock the systems that hackers penetrated. While it proved to be of some use, it ultimately wasn’t enough to immediately restore the pipeline’s systems, the person said.

The pipeline, which transports gasoline, diesel, jet fuel and other refined products from the Gulf Coast to Linden, N.J., wound up being shut down for six days. The stoppage spurred a run on gasoline along parts of the East Coast that pushed prices to the highest levels in more than 6 ½ years and left thousands of gas stations without fuel.

East Coast stockpiles of gasoline dropped by about 4.6 million barrels last week, the steepest weekly drop since late February, Energy Department data showed.

For years, the Federal Bureau of Investigation has advised companies not to pay when hit with ransomware, a type of code that takes computer systems hostage and demands payment to have files unlocked. Doing so, officials have said, would support a booming criminal marketplace.

But many companies, municipalities and others debilitated by attacks do pay, concluding it is the only way to avoid costly disruptions to their operations.

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Should companies victimized by ransomware pay hackers? Why or why not? Join the conversation below.

Paying ransoms to hackers can encourage more criminal activity and often doesn’t lead to a restoration of systems, said Ciaran Martin, the former head of the National Cyber Security Center, the British government’s cybersecurity agency. Companies should consider those factors when deciding whether to pay, he said.

“There are three problems contributing to the ransomware crisis,” Mr. Martin said. “One is Russia sheltering organized crime. A second is weak cybersecurity in too many places. But the third, and most corrosive, problem is that the business model works spectacularly for the criminals.”

U.S. officials have linked the ransomware attack on Colonial to a criminal gang known as DarkSide, believed to be based in Eastern Europe, which specializes in crafting the malware used to breach systems and shares it with affiliates—for a cut of the ransoms they obtain.

On Friday, DarkSide said it had lost access to its infrastructure and was shutting down, though it was unclear if the group was targeted by a law-enforcement action or seeking to go underground and regroup later.

Mr. Blount said Colonial paid the ransom in consultation with experts who had previously dealt with the criminal organization. He and others involved declined to detail who assisted in those negotiations. Colonial said it has cyber insurance, but declined to provide details on ransomware-related coverage.

Sometimes ransomware gangs will encrypt computers and backup systems, leaving victims with no option aside from paying the ransom, said David Kennedy, chief executive of security company TrustedSec LLC, which has investigated about a dozen ransomware cases involving DarkSide over the past nine months.

A cyberattack on the U.S.’s largest fuel pipeline on May 7 forced a shutdown that triggered a spike in gas prices and shortages in parts of the Southeast. WSJ explains just how vulnerable the nation’s critical energy infrastructure is to attack. Photo illustration: Liz Ornitz/WSJ

“I’m against paying ransom, because every time you pay these groups, you’re helping them expand their capabilities,” he said. “But companies are literally brought to their knees with no other option.”

Last week, Anne Neuberger, the White House deputy national security advisor for cyber and emerging technology, said the Biden administration hadn’t made a recommendation to Colonial on whether it should pay.

But she said that the White House recognized it was sometimes not a feasible option for companies to decline payment, especially those that don’t have backup files or other means of recovering data. She added that the administration wanted to work with international partners to review how governments assist victims and “ensure that we’re not encouraging the rise of ransomware.”

The pipeline company, which is based in Alpharetta, Ga. and owned by units of IFM Investors, Koch Industries Inc., KKR & Co. and Royal Dutch Shell PLC, restored service on the pipeline last week. It said Monday that it was transporting fuel at normal levels, though it warned that it would take time for the supply chain to recover.

The crisis was a test of leadership for Mr. Blount, 60 years old, who has led the company since 2017. He had co-founded private equity-backed pipeline company Century Midstream LLC in 2013, after working as an executive and in other roles at energy companies over an almost 40-year career.

Over the past five years, Mr. Blount said, Colonial has invested about $1.5 billion in maintaining the integrity of its 5,500-mile pipeline system, and has spent $200 million on IT.

For Mr. Blount, the cyberattack was akin to the Gulf Coast hurricanes that often force segments of pipelines and refineries to shut down for days or weeks. However, it was in some ways more devastating. The Colonial Pipeline had never before been shut down all at once, he said.

The attack was discovered around 5:30 a.m. on May 7 and quickly set off alarms through the company’s chain of command, reaching Mr. Blount less than a half-hour later as he was getting ready for the workday. The company has stressed that operational systems weren’t directly impacted, and that it shut down pipeline flows while it investigated how deeply the hackers had gotten inside.

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It took Colonial about an hour to shut the conduit, which has about 260 delivery points across 13 states and Washington, D.C. The move was also meant to prevent the infection from potentially migrating to the pipeline’s operational controls.

As Colonial shut the pipeline, employees were instructed not to log in to its corporate network, and executives made a volley of phone calls to federal authorities, starting with the FBI’s offices in Atlanta and San Francisco, as well as a representative from the Cybersecurity and Infrastructure Security Agency, or CISA, Mr. Blount said.

CISA officials confirmed Colonial representatives informed them of the hack shortly after the incident occurred. FBI representatives didn’t respond to requests for comment.

Over the next several days, the Energy Department acted as a conduit through which Colonial could provide updates to multiple federal agencies involved in the response, Mr. Blount said. Energy Secretary Jennifer Granholm and Deputy Secretary David Turk stayed in regular contact with the company, in part to “gain information to guide the federal response,” Energy Department spokesman Kevin Liao said.

As Colonial prepared to restore service, its personnel patrolled the pipeline searching for any signs of physical damage, driving some 29,000 miles. The company dispatched nearly 300 workers to keep their eyes on the pipeline, supplementing its usual electronic monitoring, Mr. Blount said.

Though the pipeline’s flow of fuel has returned to normal, the impact of the hack hardly ended with the ransom payment. It will take months of restoration work to recover some business systems, and will ultimately cost Colonial tens of millions of dollars, Mr. Blount said, noting that it is still unable to bill customers following an outage of that system.

Another costly loss, Mr. Blount noted, was the company’s preferred level of anonymity.

“We were perfectly happy having no one know who Colonial Pipeline was, and unfortunately that’s not the case anymore,” he said. “Everybody in the world knows.”

Colonial Pipeline Shutdown

—Robert McMillan contributed to this article.

Write to Collin Eaton at [email protected] and Dustin Volz at [email protected]

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conyersmooney · 4 years

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bowsetter · 5 years

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Market Update: Crypto Prices Spike Significantly In a Matter of Minutes

Digital currency markets have seen a strong price spike on Friday, adding billions to the overall market capitalization of the entire cryptoconomy. The surprise upward trend shows a few of the top-performing cryptocurrencies have gained between 10-20% in the last 24 hours.

Also read: FATF Starts Checking How Well Countries Implement Crypto Standards

Cryptocurrency Prices Show Major Improvement

Five days ago, our last market outlook report indicated that cryptocurrency markets faced a crucial turning point and the road turned out to be southbound. The $220 billion dollar market cap slid to a low of $209 billion. On October 23, in less than 15 minutes BTC prices dropped significantly from the $7,900-8,100 range to a low of $7,365 across global exchanges. Of course, many other digital currency markets have been correlated with BTC’s movements and followed the coin’s dive downwards. This Friday there’s a touch more optimism in the air before the weekend as a slew of assets are up between 10-20% or more. In fact, the significant price spike came literally out of thin air in a matter of minutes.

BTC markets are up 11% and up 4% across the last seven days. At $8,398 per coin, the digital currency has an overall market valuation of around $150 billion and a touch over $21 billion in 24-hour global trade volume. Ethereum (ETH) is swapping for $177 each and there’s roughly $7.9 billion in ETH trades today. Behind ETH, the digital currency XRP is up 5% today but is still down -0.13% for the week. Tether is still holding down the fourth largest market cap position as USDT has been a dominant force during the last few dumps. USDT has $22.5 billion in global trade volume which is $5.4 billion dollars more than BTC today.

Bitcoin Cash (BCH) Market Action

Bitcoin cash (BCH) commands the fifth largest market valuation with a cap of approximately $4.41 billion at the time of publication. There’s $2.23 billion in BCH trades today and each BCH is swapping for $243 per coin. BCH has gained 12.7% today and is also up 14.28% over the course of the last seven days. Since our last market outlook, BCH has jumped from the seventh most traded coin to fifth position on October 25. The largest pair traded with BCH today is USDT with 64.4% of all BCH trades.

This is followed by BTC (17.89%), USD (6.73%), ETH (6.43%), and KRW (2.79%) pairs. Crypto analyst John Isige says that BCH is “defiantly positive on Friday” and further explains that at $220 a coin, BCH bulls are currently targeting the $230 range. “New higher lows pattern is forming, besides, the price is teetering above the 50 Simple Moving Average (SMA) on the one-hour chart,” Isige detailed prior to the recent price pump. “In the event, bitcoin cash manages to clear the resistance at $220, the crypto will come face to face with the resistance, a confluence created by the 61.8% Fibo and the 100 SMA at $221.94.” BCH brushed past these price zones in no time at all and Isige’s morning analysis proved correct.

US Congress Members Comment on Bitcoin Again

This week crypto onlookers watched the congressional hearing with Facebook’s CEO in regard to the Libra digital currency project. A few U.S. Congress members told the public that cryptocurrencies like bitcoin were very dangerous to the American economy. Representative Brad Sherman, a Democrat from California, once again exclaimed that bitcoin was a threat to the U.S. dollar.

Representative Brad Sherman dislikes bitcoin.

Representative Warren Davidson told hearing attendees that Facebook should have used bitcoin instead but the company already explained a while back that it believed BTC cannot scale properly. Still, other members of Congress stood by BTC and Republican Representative Patrick McHenry told Laura Shin that he’s enthusiastic about the future of bitcoin and he’s a long-term believer. “Libra is not cryptocurrency — we need to stop lumping it together with very real, very important projects that are out there like Bitcoin,” McHenry said during his interview with the podcast host.

BTC Charts Show a Death Cross Scenario

While many people are focused on the entire cryptoconomy, others are focused on BTC movements to get an idea of where things are headed. Recently BTC traders have noticed a death cross scenario on the charts and a few traders expect some more bleeding. The Twitter account Klondike (crypto rush) said: “Death Cross is Coming? Right — Very soon MA50 will cross MA200 from top to the bottom. Previous death cross was formed 1.5 years ago when BTC cost $9000, then it dumped to the $3000 — Just saying.”

“It’s typical in TA to sell the death cross and buy the golden cross,” another crypto trader emphasized. But here it seems both are buying opportunities — Will this recent golden cross, like the last, mark the beginning of a bull run?” The death cross pattern is used in technical analysis to predict an upcoming selloff. Traditionally the short term moving average (50-day) drops below the long-term moving average (200-day). BTC’s death cross pattern has been seen since the last day in March.

Extreme Fear Could Bring Final Capitulations

During our last market outlook, we also explained that the Crypto Fear and Greed Index (CFGI), a multifactorial crypto market sentiment analysis, had shown the crypto sentiment at the time was reading “fear” but the data is now pointing to “extreme fear.” Some speculators believe digital currency markets have hit bottom and due to all the bearish articles and negative social media posts a strong rally may be on the cards.

Lots of traders don’t think any of the recent dumps have been a surprise and that Bakkt futures investors knew exactly what they were doing. BTC has been quite predictable and if the bottom is not in it’s likely close. Because bearish sentiment has grown further, digital currency enthusiasts may still see some massive final capitulations.

Google’s Quantum Computer Successfully Cracking Bitcoin Is Hogwash

Google’s quantum computer has everyone on the internet in a tizzy and some naive mainstream journalists believe it could crack a slew of digital assets. “A powerful enough computer, similar to Google’s quantum computer, could solve these classical equations quickly enough to crack not only bitcoin but also the encryption that the internet is built on,” columnist Billy Bambrough writes for Forbes. A politician from Arizona Chris Hindle believes the Quantum computer developed by Google is “bad news.”

Sundar Pichai (left) and Daniel Sank (right) with one of Google’s quantum computers in the Santa Barbara lab in October 2019.

Blockchain developer Peter Todd disagrees and stated: “It means nothing because Google’s quantum breakthrough is for a primitive type of quantum computing.” “We still don’t even know if it’s possible to scale quantum computers,” Todd added. In 2017, Andreas Antonopoulos detailed that Bitcoin has two layers of protection against quantum computing and breaking Bitcoin’s elliptic curve would reveal the most important secret.

“Do they use that to break Bitcoin?” Antonopoulos asked a crowd onstage in 2017. “The simple answer is ‘no’. We know from history that if you have such a thing, this is the most important and well-guarded secret.” Antonopoulos continued:

Any time you use it you have to come up with a parallel construction story that tells the world how you managed to break that encryption without using such a thing, because such a thing doesn’t exist.

Traders Continue to Measure Crypto Sentiment Coupled With Technical Indicators

Overall, markets have improved since the last dump and many speculators blamed Google’s quantum computer, Bakkt’s futures, and Zuckerberg’s testimony with congress. Traders are still inclined to believe that crypto markets are at yet another crossroad and no one truly knows which way it will turn. All eyes have been focused on charts, volumes, Elliot waves, death cross patterns, moving averages and more in hopes they can outsmart the market before it moves again. Despite the keen eyes on market indicators, surprises like today’s market spike came out of nowhere.

Where do you see the cryptocurrency markets heading from here? Let us know what you think about this subject in the comments section below.

Disclaimer: Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.” Cryptocurrency prices referenced in this article were recorded at 12:30 p.m. EDT.

Images via Shutterstock, Trading View, Bitcoin.com Markets, Getty, Wiki Commons, and Pixabay.

Want to create your own secure cold storage paper wallet? Check our tools section. You can also enjoy the easiest way to buy Bitcoin online with us. Download your free Bitcoin wallet and head to our Purchase Bitcoin page where you can buy BCH and BTC securely.

The post Market Update: Crypto Prices Spike Significantly In a Matter of Minutes appeared first on Bitcoin News.

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cryptnus-blog · 6 years

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‘I’m Pro-Whatever Kind of Blockchain Fits Decentralization Ideals’

New Post has been published on https://cryptnus.com/2018/07/im-pro-whatever-kind-of-blockchain-fits-decentralization-ideals/

‘I’m Pro-Whatever Kind of Blockchain Fits Decentralization Ideals’

This interview has been edited and condensed.

Cointelegraph recently spoke to Guy Zyskind, the founder and CEO of decentralized blockchain company Enigma and graduate of the Massachusetts Institute of Technology (MIT), about the future of blockchain protocols and where Enigma fits in.

During TechCrunch’s recent Ethereum Meetup in Zug, Switzerland, Zyskind elaborated on his successful experience teaching a blockchain course at MIT, as well as his regrets over missing out getting into crypto way back in 2010.

Molly Jane: First off, could you explain what the Enigma protocol is and how you originally ended up in the blockchain world?

Guy Zyskind: I’m Guy Zyskind, co-founder and CEO of Enigma. Enigma is building a platform for privacy-preserving smart contracts. We call it “secret contracts’” for the fact that no one’s internet network can actually see the data they are computing on. This is in contrast to public blockchains like Ethereum and pretty much everything there is today.

My background is that I was born and raised in Israel, moved five years ago the States and went to grad school at MIT. That’s really where I got interested in blockchain and the intersection of privacy. I published a few papers — one of them was the Enigma white paper — which was the predecessor to the platform that we’ve been building today.

MJ: How closely do Enigma and MIT work together?

GZ: I am working on Enigma full time. We are affiliated with MIT, so the MIT E14 fund [part of the MIT Media Lab] and the Engine Fund have invested in us.

My professor, MIT’s advisor Sandy Pentland, is a co-founder and advisor to the company. We’re still very often at MIT, very connected to the ecosystem, but we’re not directly affiliated to MIT today.

MJ: Is what Enigma is doing with secret contract the first of its kind?

GZ: As far as we know, we’re the first of our kind. Definitely, when we started in 2015, that was like the first-time that privacy-preserving smart contracts came to us even as an idea, and I believe we have the first implementation in the world right now.

MJ: When was the first time you heard about Bitcoin? When was the first time cryptocurrency became a real concept for you?

GZ: That’s an unfortunate story. That was 2010. We had our own geeky, closed secret group of people and my friend was like, “Oh, there’s that cool thing Bitcoin. You should download it and we should start mining.” And we were all like, “Yeah, sure. Forget about it,” and it was 2010. Could have been really interesting.

I seriously got into it around 2013, so I started working on it in 2012. 2013 was when I got really hooked and, since then, I’ve been working on it full time.

MJ: You didn’t end up mining Bitcoin back in 2010, but are you investing in it now?

GZ: I hold some Bitcoin, I hold some Ethereum. Obviously, I hold Enigma. That’s pretty much it when it comes to the space.

MJ: So, you don’t like to play around with the market?

GZ: Honestly, I don’t have the bandwidth. I’m more in this for the tech. I’m more interested in building, I’m less in for investing. I think I’m a really poor investor.

MJ: On your website profile it says you’re a Bitcoin evangelist, so what are you doing at an Ethereum meetup today?

GZ: Well, I’m not a Bitcoin maximalist. I’m pro-decentralization, basically. I got hooked on Bitcoin because of the idea that you can do consensus at scale — at internet-scale — for the first time. That’s what took me in Bitcoin. I’m very much pro-Ethereum, pro-whatever blockchain that can fit those kind of ideals.

MJ: Could you explain in layman’s terms the difference between the Ethereum blockchain and the Bitcoin blockchain?

GZ: When Ethereum started, people were saying that Bitcoin does not allow you to do any type of computation, any type of application. It’s only mildly true. It’s true that Ethereum built a way to build more kinds of applications than just sending payments. I still think that both Bitcoin and Ethereum are basically giving us internet-scale consensus.

Having a system where you have different actors, different machines that can reach the same conclusion on some problem. In Bitcoin, the problem is starting the ledger in a way that everyone agrees on, even if they are dishonest or malicious.

To me, the big difference between Ethereum and Bitcoin is the ecosystem. Ethereum really made it possible and accessible for developers to start developing applications that can run not in one place, but in many places at once.

MJ: I’ve read that you taught a course on blockchain at MIT. Can you tell me how that went over?

GZ: Right. That was a few years ago. It was when the Digital Currency Initiative (DCI) was formed, and we were like, we have great students, great talent. There were a few of us. I and a few others were talking about it, we need more people working on blockchain at MIT, and they said, ok, let’s open a class.

I taught a class together with basically the head developer in our circle and another person from the DCI, which was very successful and — as I mentioned — published a few papers on the topic of blockchain privacy.

MJ: How did the students like the class? Did you see a lot of enthusiasm for blockchain?

GZ: Oh yeah. We had about 40 people, which, for a first-time class that was arranged two weeks before the start of the semester, was a really good number. We got really good projects, what we did was we taught the students what blockchain is, what consensus is. Ethereum was only beginning, so we didn’t teach as much about Ethereum as we did with Bitcoin, but we wanted people to experiment a little bit with Serpent back then, that was before Solidity.

And then we had the finals where people presented their projects and that was really cool. All of the works were great. One of the projects actually became a paper of its own and the first project of the DCI, which, I believe, was about blockchain in the medical industry.

MJ: When you taught the class on blockchain, how did you introduce the concept of this technology?

GZ: I just explained Bitcoin. Let’s say there is a new company that says, “We are maintaining a new kind of money,” right? It’s totally not on a database. And you could transact. We could give $1 to every person in the world and you can start transacting with it.

But then, after that point, if you want to buy more, you’re going to start depositing money. And this is an untrusted company, not a bank, not affiliated with a country. And I ask people in the class, “Are you comfortable trusting and continuing to pour money into that kind of system?” And the answer is always “no” from everyone.

And then I start to explain how Bitcoin works in a very high-level way, and how even though you don’t trust one entity, if you have many of them and you don’t trust them individually, but somehow, collectively, you can trust them to actually transact and approve any transaction you send to people. And that kind of clicks and from that we go more technical.

MJ: Do you see MIT offering this class again in the future?

GZ: I know that after we taught it, there was a bit of a break. But from what I’ve heard recently, the class is now returning and there are actually even more people working on it and more researchers. Blockchain at MIT has really evolved in those spheres, which is amazing.

MJ: Can you tell me more about Enigma’s recent announcement of a partnership with Intel?

GZ: Basically, what we offer — that others do not — is to create scalable, privacy-preserving smart contracts. Right now, when you look at blockchains, the way they’ve been developed — Ethereum included — is that you take a computation and verification and you do them in the same place. In Ethereum, you have an application running as a smart contract on the blockchain: Basically, every node in the network has to run every computation and validate that computation, which is very, very costly.

We’re trying to split that, and we’re trying to make sure that all computations that are happening are working on data that the nodes themselves cannot see. There are several ways to do it. There are hardware-assisted ways and there are purely cryptographic ways. At Enigma we’re developing both because we want to give developers the choice.

When it comes to hardware system techniques, that’s known as trusted execution environments. Intel has been developing one of the leading examples of that, which is called the Intel SGX. And we used that to build our first situation of a test. We partnered with Intel together to develop that further, to see how far this technology can go, how helpful it can be for Enigma and for blockchains in general, also to continue researching and improving the systems and even make them more trustless and permissionless.

MJ: In the future, 10 years down the line, which blockchain protocols do you think will be left standing?

GZ: I think it’s safe to say that most protocols won’t exist. Most tokens won’t exist. I think there will be more than one to two winners. I think there’s a place for like 10, 20, maybe even 50, but what I’m really curious about is to see how protocols and projects will start merging with each other.

Because, obviously, it’s not possible to have 2,000 projects. If you look at 2014, there were all these outcomes of Bitcoin in all these forms, and most of them didn’t survive. But some did. So, I think some will survive and those are the ones that are doing really legit work and actually advancing the tech and the applications.

MJ: Great! Thank you so much.

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lordfranklin · 6 years

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jwbarkstrom-blog · 7 years

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Why Are Blockchains So Funny?: Using Comedy to Write About The World of Cryptocurrency

(An important note: blockchain is a type of accounting ledger that enables nearly all cryptocurrency. Some call it “trust free” because almost no one can tamper with it, so no one needs to be “trusted” to keep the ledger honest. If you don’t already know blockchain, you should read this explanation: https://medium.freecodecamp.org/explain-bitcoin-like-im-five-73b4257ac833)

Just a few weeks ago, I heard someone refer to the recent events surrounding cryptocurrency as the “fourth industrial revolution.” This someone was Kevin Chen, presenting at the University of Virginia on behalf of the IOTA Foundation, sponsors of the cryptocurrency (virtual currency) IOTA. On LinkedIn, he refers to his occupation as “Evangelist.” He claimed that IOTA had somehow devised a decentralized, costless method of making and verifying transactions on an accounting ledger that was better than blockchain—essentially Maxwell’s Demon. Basically, he claimed one could IOTA’s system of money to somehow order and verify transactions without using energy! As a believer in the laws of physics, I was skeptical. Sorting things such as transactions takes energy, and energy is a cost. “The problem with blockchain,” he said, “is the transaction costs. We don’t have transaction costs” (Chen).

The world of cryptocurrency today is full of innovation, but it is also full of people making wild, attention-grabbing claims like Kevin the Evangelist. For example, the yellow paper (an official document) of Ethereum—the second most popular cryptocurrency—says it could replace “all transaction-based state machine concepts” (Wood): essentially the creators of the cryptocurrency call for the end of money as we know it. These ridiculous claims are everywhere, from people like the creators of Ethereum claiming a “revolution” in the way we use money to to overblown scams that seemingly create money out of nothing. Because of these exaggerations and scams, covering cryptocurrency presents a huge challenge for news media. Somehow, financial news sources have to cover it all: both the illegitimate and the legitimate, all while drawing a line between real and fake. What is real about IOTA? At the time, trying to make sense of Kevin Chen’s hyperbolic claims, I had no idea.

Because the world of cryptocurrency is so convoluted, financial news sources often use comedy and humor to cover it: humor removes much of the fear from the difficulty of distinguishing the real from the fake or exaggerated. It shields readers from the constant bombardment of “revolution!” and “disruption!” (as well as scams), yet lets readers acknowledge and even understand the simple truth behind this bombardment. We see humor at work in making sense of overhyped or confusing technological innovations all the time: an article from The New Yorker entitled “The Worst 360° V.R. Channels,” for example, jokes about the stupid TV that people could watch with virtual reality headsets. Through examples such as “Ceiling Fan During a Divorce Conversation” (Markow), the reader can see that virtual reality is largely just an over-glorified form of television, not a change to the world as we know it. In the same way, humor transitions to understanding with cryptocurrency.

Two popular columns targeted at very well-established professionals in finance, for example, use comedy to deal with the latest crazes in cryptocurrency and bring clarity for their readers: Matt Levine’s Money Stuff from Bloomberg and Alphaville from The Financial Times. Investigating these columns reveals that comedy is especially important for the crazy, often dangerous topic at hand: after a $200 million cryptocurrency hack that shocked the world, Matt Levine said that the world of crypto is an unforgiving world of “bright lines and sharp edges” (“Blockchain Company’s…”), and in my opinion the writers use comedy to take some of these sharp edges off. Because of comedy, readers can think hard about cryptocurrency without being upset by its craziness. Discussions about cryptocurrency and blockchain (its underlying technology) are crazy, from claims of ending all government to ludicrous schemes of raising money, but there is some substance behind it all. Comedy helps readers find that substance.

Money Stuff and Alphaville utilize complementary elements of humor and realism in dealing with all things crypto: for funny sections or articles, they begin with a humorous, skeptical “this is ridiculous!” followed by a humorous analysis of said ridiculousness. Essentially, the premise is “This is ridiculous — so let’s think through it (because it will be funny).” Serious sections or articles, on the other hand deal with cryptocurrency and blockchain more realistically. Alphaville and Money Stuff intentionally expose readers to both perspectives: By utilizing both humor and realism, they acknowledge the ridiculous and hypothetical—not only laughing at it but actually thinking through it while they laugh at it—before dismissing it with realism. In practice, Alphaville generally places a series of comedic cryptocurrency articles next to its serious cryptocurrency articles, and Money Stuff often juxtaposes humor and realism in neighboring paragraphs. With this pattern, financial news sources get extremely confusing, controversial (or just plain boring) ideas across without alienating the readers by using a humorous spin. Readers can learn about and acknowledge things such as the “costless” IOTA without being overly bored or confused, and professionals can work their desk jobs informed, yet undisrupted by the latest revolutions in cryptocurrency.

Both Alphaville and Money Stuff begin dealing with cryptocurrency with humorous, skeptical analysis—essentially saying, “we’ll deal with it, but this is ridiculous.” In response to the July 2017 crypto boom, Alphaville began its “ICOmedy Series”—its comedy series about cryptocurrencies—with extreme incredulousness. In the words of Paul Murphy, “Crypto is arguably the greatest, off-with-the-fairies, call-the-doctor-no-wait-call-the-police financial mania of our times. Do we try and analyse it, or simply slap a DNR label on the matter and wait for those clowns taken in to lose all their money? We’ll try the former and see how it goes.” Basically, the article makes a simple point: cryptocurrency is insane, but as a news source we will analyze it—in a comedy series. Matt Levine, on the other hand, began a section of his column Money Stuff with a section entitled “Blockchain blockchain blockchain.” His title references a comedic rant about money appearing every time someone uses the word “blockchain,” because people get so excited about the technology that they blindly throw money at it.

After establishing this humorous tone, both Alphaville’s ICOmedy Series and Money Stuff’s “Blockchain blockchain blockchain” section then use this humor for real, productive analysis. ICOmedy has many funny articles analyzing cryptocurrency phenomenon on a micro level, but its most comprehensive article is entitled, “What is Crypto’s Agenda Really?” The author, Isabella Kaminska, makes a point that the blockchain and cryptocurrency trend is, to a certain extent, just a renaming of well-established financial mechanisms. She writes, “So how best to achieve [predators sucking on the productive population] if not through the mass deployment of technological buzzwords to disguise what are in fact well-established financial mechanisms and processes as something cutting edge and new?” She somewhat—but only somewhat—jokingly argues that blockchain and cryptocurrencies are just a way for parasites to leech off of the world economy: an enabler for the “world’s illicit tycoons” to move around their money. Essentially, the “decentralization revolution” that many blockchain supporters claim to be a part of is a front for avoiding government: she believes people made cryptocurrencies on blockchain to get around the law. Whether you believe Kaminska or not, she forces you to think about what blockchain (which works without a government) was really created for. Comedy lets her take such a hard-edged stance, and the reader doesn’t necessarily have to agree or disagree with her, he or she only has to think with her. Is blockchain just a cutting-edge sounding type of traditional finance?

Using his particular humorous method of analysis, Matt Levine forces the reader to think about a similar question. In “Buffet Deals and Blockchain Crashes,” he looks at the brief crash of Ethereum—in mid-June it crashed from over three hundred dollars to around ten cents—and portrays it as a basic lesson of finance. He writes, “The basic appeal of the cryptocurrency revolution… for people like me… is that it is fun to watch people rediscover all of the lessons of financial economics, one at a time, in public.” He is joking, but like Kaminska, he is also serious. People were forced to sell on their margin accounts due to automation, just like during the May 6, 2010 Flash Crash where the entire market crashed due to automated sell orders. People are again learning that triggered selling can be dangerous. If everyone has a trigger to sell if something goes below a threshold, and the thing goes below the threshold, everyone sells! And chaos ensues. In short, his point is that cryptocurrencies still work like regular markets. People still needed common sense. With his snarky comment—along the lines of “I like watching stupid people!”—he forces the reader to think about what’s really that different about cryptocurrency markets versus regular markets.

Levine, with his typical wit, then goes on to question the idea that “trust-free” markets on the blockchain are more efficient. He says that a world where people “occasionally pick up the phone and try to work things out like reasonable humans – seems likely to be more efficient than a purely trust-free one” (“Buffet Deals…”). He plays with an idea behind cryptocurrency and blockchain itself, an idea that he has mocked over and over again on his column: that we can somehow create something perfect that we will never have to fix, and that we will never have to trust each other to solve problems again. In reality, when things go wrong, we have to trust each other. In his humorously titled article, “Blockchain Company’s Smart Contracts Were Dumb,” he makes this point: if a seemingly perfect cryptocurrency “smart contract”—a contract executed by code, not humans—doesn’t work as intended, we have to use trust to fix the problem. Otherwise, if we assume code must be irrefutable, bad things happen. Levine makes this point with a comedic, yet serious exaggeration:

The words “hack” and “theft” make human, normative presumptions about how you’re supposed to use the DAO code. But the code doesn’t care. The code can’t be “hacked.” It can only be used; its use has no normative implications…. Human expectations are irrelevant, except to the extent that they are correctly translated into code. (“Blockchain Company’s…”)

Levine finishes with, “This is of course childish and silly. It isn’t how human institutions operate” (Ibid). He takes us through the entire ideological framework of a smart contract—from the exaggerated perspective of its creators—and shows us its shortcomings with comedy. As readers, we see clearly: trusting completely in code is obviously idiotic, and we should be able to fix the problems we create.

Finally, after much comedic analysis, both Money Stuff and Alphaville include a simplified return to reality. Essentially, they answer the question: What is blockchain—the technology behind cryptocurrency—really useful for? Isabella Kaminska, the same author of “What is Crypto’s Agenda Really?” wrote a more serious article on Alphaville entitled “Blockchain’s Governance Paradox.” Essentially, she asserts that blockchain still requires governance because someone still has to make rules. Blockchain and the aforementioned smart contracts, although self-enforcing, are not self-creating. They do not eliminate the need for trust. She quotes Prof. Vili Lehdonvirta:

Who makes the rules matters at least as much as who enforces them. Blockchain technology may provide for completely impartial rule-enforcement, but that is of little comfort if the rules themselves are changed. This rule-making is what we refer to as governance. (“Blockchain’s Governance Paradox”)

Her serious point is that someone still has to make the rules. Therefore, blockchain is more applicable to specific situations: Kaminska considers “micro blockchains” and corporate specific blockchains, which are just fancy names for corporate databases. Blockchain, she argues, really isn’t that special. For now, it just has some specific applications, such as a corporate database for JPMorgan.

After four paragraphs of joking, Matt Levine reaches a similar conclusion—that blockchain is useful in specific applications—in Money Stuff’s “Blockchain Mania and MiFID II.” Referring to specific applications, he says, “‘Tokenization’ of some transactions or ownership interests will probably turn out to be useful, and might change how the markets for digital advertising or cloud storage or housing or whatever work.” Maybe, he asserts, Walmart could most efficiently use blockchain to track its mangoes. Or maybe not. Blockchain has some specific applications, but as of now it isn’t changing the world. Finally, he concludes with a more hypothetical, yet still realistic paragraph:

But the way I like to think about it is that cryptocurrency might be to the 21st century what stock was to the 17th century…. Cryptocurrencies and blockchain really could be revolutionary technologies that will ultimately pervade every aspect of the economy, even while almost every [current] individual project could be nonsense. (“Blockchain Mania…”)

Levine makes a similar point in his article about MIT’s issuing degrees on the blockchain: currently, blockchain is little more than a novelty, but it may have pervasive implications for the future. Until the world accepts blockchain and adapts to it, we will never know for sure. As of now, according to Levine, blockchain is simply an interesting way to store data. Like the “costless” IOTA, it is not a miracle. After a comedic questioning of nearly everything in the world of cryptocurrency, Kaminska and Levine both return to the same point: blockchain simply has specific applications, many of which remain to be found.

This overall pattern Kaminska and Levine use in both Money Stuff and Alphaville—humor, humorous analysis, realism—is so successful, in my opinion, because it draws the reader into thinking. The use of comedy works. By starting with humor, they draw the reader in: they devote whole paragraphs to laughing at hilarious developments such as the cryptocurrency TetzelCoin, a “blockchain-based app that forgives users of their sins” (Doenlen). Then, by using witty analysis, they give the reader a smooth transition from simple entertainment to actual thinking. They force the readers to actually think about cryptocurrency and blockchain in entertaining hypotheticals, peppered with exaggerations and hyperbolic claims. Finally, once the reader has thought hard, they are inspired to think without needing any more entertainment—so the more confusing articles, full of long bouts of witty analysis, often end on a purely intellectual or practical note. Humor allows the entertained reader to transition into humorous analysis, and then the humorous analysis allows the reader to transition thinking realistically. The reader laughs skeptically, thinks skeptically, and then thinks realistically, and the articles are able to build up the reader’s confidence to really think about the crazy world of cryptocurrency and blockchain. When the reader is at ease, he or she can think clearly about complex things, as per the framework of the social facilitation model: difficult tasks are easier without stress. Cryptocurrency is complicated, and comedy puts readers at ease so they can really think about it and what it means.

Unlike other articles or papers, which may come off as dry in an attempt to be realistic or far-fetched in an attempt to be interesting—or worse, both—the comedic articles from Alphaville and Money Stuff engage and inform. For example, many academic papers I found, often with rousing titles such as “Story Blocks: Reimagining Narrative Through the Blockchain” and “Blockchaining Your Way into a Cloudmind,” are generally either a slog to read because they either remain too realistic or completely venture into ridiculousness, without moving on from hyperbole to careful analysis and thinking. Blockchain, in and of itself, is just a simple framework for structuring things that has a few applications besides being a ledger for cryptocurrency: it’s not really that interesting. The “Story Blocks” experiment about narratives simply has people “build” stories on top on top of one another, and the paper reads as boring ideas disguised as buzzwords (Maxwell). The “Cloudmind” article, on the other hand, is completely absurd: it deals with the hypothetical notion that we might sell our own unused brain processing cycles to others with cryptocurrencies through blockchain (Swan). The quotation from Lehdonvirta, “blockchain technology may provide for completely impartial rule-enforcement, but that is of little comfort if the rules themselves are changed” (“What is Crypto’s Agenda…”), renders this idea useless: these rules would manipulate our brains!

Other, better non-comedic approaches, such as “Blockchains: How They Work and Why They’ll Change the World” from the Institute of Electrical and Electronics Engineers, struggle to find a balance between realism and engagement. Just reading the article, I could feel the tension between the “blockchain and cryptocurrency are changing the world!” paradigm and the more realistic idea that blockchain only has specific applications. Given the title, the article obviously settles for the former: it engages with illustrations, but largely fails to generate a realistic perspective by failing to point out the occasional ridiculousness of its subject matter. It quotes Joel Monegro, who started raising money in cryptocurrency because he believes that “equity is the root of all evil,” and adds no analysis (Peck). Matt Levine and the staff at Alphaville would have ripped the man apart! “This is insane!” they would have said, because comedy lets them. Comedy removes the tension between validity and engagement that all other articles wrestle with because and it allows the reader and the author to use skepticism. Comedy combined with realism allows for a widened perspective without loss of clarity: we can see everything that happens in the world of cryptocurrency, yet we can also dismiss some of it as ridiculous.

Looking back at the IOTA cryptocurrency, I realized that it was an exaggerated claim to empower “Internet of Things” applications (hence the name IOTA) : a scary world where your toaster could collect data about you and share it with third parties and/or your refrigerator. Just like blockchain, I realized that it had some real, useful applications, such as in a small network of your kitchen appliances where self-verifying transactions has very little cost. I’m not sure why your kitchen appliances would want to talk to each other, but perhaps some company wants to collect all of the data from your waffle maker and use it to sell you waffle mix. Honestly, I still don’t know any viable applications of IOTA other than spying on people via their own appliances. I can’t ask Kevin Chen, of course, because he would tell me I could use it for anything, ever. Soon we’ll be colonizing Mars with IOTA! Thankfully, however, Alphaville and Money Stuff have taught me to be comfortable with these ridiculous and confusing aspects of cryptocurrency. Cryptocurrency and blockchain don’t always make sense, so we use comedy to deal with them, just like we might use comedy to deal with anything else confusing. How else could one possibly explain Kevin, who claims to be an “Evangelist” for IOTA on his LinkedIn profile, trying to convert others to a belief in Maxwell’s Demon?

Works Cited

Chen, Kevin. “The Crypto Frontier.” The Crypto Frontier. The Crypto Frontier, 12 Oct. 2017, Charlottesville, OpenGrounds.

Doenlen, Will. “TetzelCoin - A Token for Forgiveness.” TetzelCoin.

Kaminska, Izabella. “Blockchain's Governance Paradox.” The Financial Times, 14 June 2017.

Kaminska, Izabella. “What Is Crypto's Agenda Really?” Financial Times, 23 Aug. 2017.

Krawisz, Daniel. “It's Not About the Technology, It's About the Money.” Satoshi Nakamoto Institute, 13 July 2016.

Levine, Matt. “Are Blockchain Diplomas the Real Deal?” Bloomberg.com, Bloomberg, 22 Oct. 2017.

Levine, Matt. “Bank Blockchains and an Alibaba Box.” Bloomberg, 10 Jan. 2017.

Levine, Matt. “Blockchain Company's Smart Contracts Were Dumb.” Bloomberg, 17 June 2016.

Levine, Matt. “Blockchain Mania and MiFID II.” Bloomberg.com, Bloomberg, 23 Aug. 2017.

Levine, Matt. “Buffett Deals and Blockchain Crashes.” Bloomberg.com, Bloomberg, 23 June 2017.

Markow, Steven. “The Worst 360° V.R. Channels.” The New Yorker, The New Yorker, 2 Sept. 2017, www.newyorker.com/humor/daily-shouts/the-worst-360-vr-channels.

Maxwell, Deborah, et al. “Story Blocks: Reimagining Narrative Through the Blockchain.” Convergence: The Journal of Research Into New Media Technologies, vol. 23, no. 1, Feb. 2017, pp. 79–97.

Murphy, Paul. “From Dot.comedy to ICOmedy.” Financial Times, 17 July 2017.

Peck, Morgen E. “Blockchains: How They Work and Why They'll Change the World.” IEEE Spectrum, vol. 54, no. 10, Oct. 2017, pp. 26–35.

Swan, Melanie. “The Future of Brain-Computer Interfaces: Blockchaining Your Way Into a Cloudmind.” Journal of Evolution & Technology, vol. 26, no. 2, Oct. 2016, pp. 60–81.

Wood, Gavin. “Ethereum: A Secure Decentralized Generalized Transaction Ledger.” 7 Aug. 2017.

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