New knowledge in the chain of | loss of $250 million a year, how dangerous is the virtual world of robbery?

In the virtual world on the chain, hackers are everywhere. In terms of blockchain security in 2020, there will be a loss of 250 million dollars, and there will be more than 60 attacks, big and small. The risk of virtual world is much greater than that of real life.

In order to allow users outside the circle to have a more comprehensive and objective understanding of the risks of cryptocurrency, Tencent News and RoutinBlockBeats jointly launched the "New Knowledge on the Chain" column from 19:00 to 20:00 on April 22, with the theme of "Loss of 250 million US dollars in a year, how wonderful is the virtual world robbery?" , Hu Chao, vice president of Orco Cloud Chain Group, and Eric Yu, co-founder of Maizillet, were invited as guests, hosted by Zhang Shuhao, executive editor of Rhythm Blockbeats.

"All this talk about blockchain being traceable, but why are there so many people using cryptocurrencies to transfer money?" "And" Is Bitcoin very heavily used on the dark web? Is dark web activity as active as it was a few years ago?" ", "How to identify a pyramid scheme when the huge cryptocurrency pyramid scheme organization Plustoken involving 40 billion RMB is broken down?" And so on the majority of investors heart concern of the most core issues, in this program one for you to answer.

Host: Please introduce yourself first. How did you get into the blockchain industry?

Hu super:Hello, everyone. I'm Hu Chao. It's a great pleasure to meet you tonight on the platform of Tencent News. I believe that every person who truly understands the spirit of blockchain will be impressed by its great idea. It was the spirit of blockchain technology that attracted me at the beginning and I chose to join the industry.

On the other hand, I would like to thank Mr. Xu Mingxing, the founder of Ooko Group. He is the earliest expert on blockchain technology in China and a firm believer in truly understanding the spirit of blockchain. He is also a very simple and sincere person. His ideal and persistence in the sea of block chain, as well as his clear blueprint for the construction of this business, have influenced many friends around him, including me.

As we all know, blockchain has been elevated to the national strategy, this year is included in the national "14th Five-Year Plan" and 2035 vision goals, which further strengthens our confidence in this industry to continue to move forward.

Eric Yu:Hi, I'm Eric. Thank you so much for having me on the show. I'm the CTO of Wheat Wallet, and I was a tech entrepreneur in the Internet field before. I entered the industry in 2016 when I read an article titled "How Blockchain DeliveresValue on the Internet", which made me feel very interesting.

I have been doing things related to the Internet before, so I know that the Internet is a medium that can use technology to deliver information. Later, I found that value can be transmitted on the Internet with block chain technology, which turned the process of information replication on the Internet into a process of value transfer, which felt very interesting. Then I went into the industry and did some research.

In 2017, there was a public chain boom in blockchain. In addition to the well-known Bitcoin and Ethereum, a new public chain emerged. At that time, I found an opportunity that with the increasing number of public chains, users needed a wallet to support various public chains for operation. Therefore, in 2017, we created the Wheat Wallet, which is characterized by a multi-chain wallet. At present, the number of public chains we support has reached more than 60, and users can use a set of systems to operate on various public chains.

Host: For users outside the circle, there is a more interesting question, all say that blockchain is traceable, but why there are so many people using cryptocurrency in the transfer? Especially ash production.

Hu super:It's an interesting question, and I'm often asked by my friends. I think we can understand the problem by looking at it in two ways.

On the one hand, from the perspective of technical sources, blockchain technology first comes from Bitcoin, and blockchain is the underlying technology of Bitcoin. Just like artificial intelligence, Internet of Things, cloud computing and other technologies, blockchain is not a single information technology. It combines distributed data storage, peer-to-peer transmission, consensus mechanism, encryption algorithm and other technologies. It is a new technology paradigm. Blockchain is essentially a distributed database technology, or "distributed ledger", with decentralization, immutability, traceability and other technical features.

When we say blockchain is traceable, exactly what we mean is that every transaction on the blockchain, whether it's bitcoin or any other crypto asset, is publicly linked through distributed accounting and storage. For example, through our Oklink blockchain browser, anyone can check the transaction time, the number of assets, the wallet address of both parties of any transaction on the chain, and can also track the origin and origin of any money on the chain. This is what we call blockchain traceability and traceability.

On the other hand, it is also said that blockchain has anonymity, which is compared to the real-name account system in our traditional financial environment. As we all know, every bank card in reality is bound with an exact real-name identity information, which can be easily matched to real entities, including individuals, companies or other types of institutions through the bank card number.

In the blockchain world, the system of accounts is anonymous. We can address block chain purse, analogy for a bank account in the traditional world, according to the chain blocks the earliest design concept, in order to protect the privacy of users, also based on block chain technology has created a trusted environment, wallet address is anonymous, so theoretically we weren't able to block chain wallet behind the address and the entity. Therefore, later, many gray industries will take advantage of the technical feature of blockchain to try to escape the supervision and sanctions of real laws. It's a challenge.

Eric Yu:There are three main advantages that are unique to blockchain. The first one is immutable. If the user is not familiar with the blockchain, we use the traditional database to explain. Traditional databases do four things: add, delete, change and check, while blockchain can only do things like add and check. Things on the blockchain can't be deleted, and once money is transferred from one account to another, a fait accompli can't be changed. This is the advantage and characteristic of blockchain.

The second is timely finality. It's kind of like a cash transaction, where you get the money and you get the money. Unlike the current payment system, there is no intermediary. Blockchains don't have these intermediaries, and instant finality is one of the most efficient aspects, but it's also difficult to regulate.

The third is a general trend, where people are becoming less connected to each other, but people are becoming more connected to systems. In other words, if people trust a system, the more convenient it will be for us to actually use it. For blockchain, the trust is in the encryption algorithm and the mathematical logic behind it. Therefore, it is perfect to transfer the trust between people to the process of mathematics or algorithms, so that people involved in a relatively fair environment.

These three points are what I think make blockchain attractive and unique.

Host: The chain is a virtual world, this virtual world is full of danger, the frequency of asset loss is far more frequent than the real life, hacker events are frequent, the two guests in the deepest impression of hacker events is which?

Hu Chao: First of all, I want to say something on behalf of the industry. This statement may not be accurate. Just like many people think that aircraft is the most unsafe means of transportation, that is because once there is a plane crash or accident, will be the first time widely reported and spread, in fact, from the historical data, aircraft is the safest means of transportation. Block chain world indeed there will be a dangerous event, everyone will think this virtual world is especially dangerous, may be because the chain block is the world's attention as a strategic emerging field, once appear such and such events, soon there will be a broad and persistent reported sharply and spread, let everybody has formed the impression.

Speaking of hacking incidents, I remember the GitHub user stolen coins last August. We are the first group of people to know about this incident, because our cloud chain group has a core product called "Sky Eye on the Chain", which is a world-leading block chain big data security tool. On August 30, last year, our chain eye team detected that 1404 bitcoins were transferred from a wallet address and deposited into the hacker's wallet address. The next day, the 1404 bitcoins were transferred to a large number of different wallet addresses through mixing coins. This change was detected by us the first time.

The incident became widely reported after the owners of the stolen coins posted their addresses and spoke publicly about their theft. A total of 1,404 Bitcoins were stolen, which today would be worth around 500 million yuan. Even at the time, it was a lot of money, and it certainly caused a lot of shock, and it certainly attracted a lot of attention.

More and more people have observed that not only hacking incidents, but also more and more new forms of illegal crimes such as extortion, dark net trading, cross-border gambling, pyramid schemes and money laundering have emerged, threatening the security of on-chain assets and negatively affecting financial stability and the healthy development of the industry. It should be said that this is an inevitable pain in the early development of an emerging industry, and it is also a common problem faced by the whole industry and the supervision. It is precisely out of the vision of maintaining the sustainable development of the industry that we launch the product "Sky Eye on Chain".

Eric Yu:As a developer, I find the Defi protocol Cover hacking incident last year interesting. Cover itself is an insurance in the field of DEFI. It covers the loss of hacker attack of DEFI itself, which means how to Cover the insurance agreement itself except for the problem.

The second is the way Cover was attacked, which is also very interesting. The hacker created a fake Cover token and then used the complex composition of DEFI protocol. After several combinations, the fake token was changed into a real token, and the asset was removed from the protocol.

From the back of this matter, we can conclude that whether it is blockchain, DEFI or smart contract, it is still in an early stage. There's a lot of experimentation going on, and there's a wake-up call for everyone involved. The first is that you need to really understand what the protocol or DEFI is doing, and is there a security audit, and the second is that you need to do a risk assessment of the projects that you participate in and invest in.

Host: For a lot of people, the dark web is a very strange thing, and Unfriend 2 also takes us into the dark web, and it also mentions Bitcoin, is Bitcoin used very extensively in the dark web? Is the dark web as active as it was a few years ago?

Hu super:As a tool with the characteristics of distributed, anonymous and borderless, Bitcoin also has a wide user base on a global scale. Dark web activists or other criminals will think that it is a good way to hide their true identity, so it does have a good existence and circulation soil on the dark web.

We note that public data shows that in the first quarter of 2020 alone, dark web entities sent 50,000 Bitcoins and received 47,000 Bitcoins. Most dark web markets often only allow Bitcoin, such as Silk Road 3.1, UAS Service RDP, Hydra, etc. Cryptocurrencies such as Monero and Litecoin are also beginning to be used frequently in dark web activities.

Here's another statistic. In 2020, the dark web generated $1.75 billion in revenue from buying and selling illegal goods through cryptocurrencies, an increase of 23% from the previous year. As you can see, dark web activities such as pornography, terrorism, and drug trafficking are increasingly being traded in cryptocurrencies.

This phenomenon has indeed become a serious challenge for the blockchain industry. This severely stigmatises the blockchain industry and, to some extent, is an impediment to the industry's compliance and healthy development. In this context, we believe that blockchain big data security system is a sharp sword to solve this problem. Overseas, Chainalysis, Elliptic, Cipher Trace, and other tools are now available.

In China, Oke Cloud Chain Chain Sky Eye, which has a complete independent and controllable technology, has also had a lot of successful applications in the practical combat of intelligent police and assisting the police to crack down on crimes involving chain and currency, and a number of technical indicators have reached the world's leading level. We hope that through such efforts, one is to assist relevant departments to solve the problem, and two is to correct the name of our industry.

Host: A few days ago, CCTV's Half Hour program on Economics aired the case of Plustoken, which is a cryptocurrency pyramid selling organization involving 40 billion yuan and more than 3,000 levels. Does this mean that the transfers on the chain can already be traced by the police and can be traced to individuals?

Hu super:Objectively speaking, if there is an on-chain asset security event such as Plustoken, it is technically difficult to lock, track, and recover assets for four main reasons:

First, new economic crimes involving chain and currency, such as Plustoken, are still in the learning stage for our front-line case handling force, both cognitively and technologically.

Second, because of the anonymity of blockchain accounts, it is difficult to correspond with the entities behind them. The case handling authorities still lack corresponding databases, which makes it very difficult to handle cases.

Thirdly, the on-chain transaction network is very complex, and by means of currency mixing, criminals can disperse the stolen money on the chain and wash it for free. It is also very difficult for the case handling authorities to track, sort out and summarize such information.

Fourth, at present, the case handling authorities are still unfamiliar with the use of blockchain big data security tools such as Skyeye on the chain. At the same time, the cooperation mechanism within the blockchain industry is not perfect, so they often have no way to start when handling cases.

It is precisely because of these reasons that new cases involving chains and coins now appear to be more frequent. In order to solve this problem and protect the security of the assets on the chain of the vast number of users, especially non-professional users, supervision, technology and users need to make joint efforts.

From our point of view, Oke cloud chain on the eye is our focus on the product, we are to solve the previously mentioned major problem. So far, we have launched three major functions, "Address Analysis", "Transaction Graph" and "On-chain Monitoring", and all users can use it for free to monitor and track their on-chain assets. In terms of the underlying capacity of our chain eye has collected more than 100 million address labels, at the same time also in continuously updated iterations, eye Pro upgrade of the chain by local police's consistent high praise, we have assisted in Shanghai, shenzhen, shandong, sichuan, zhejiang, etc have arrested dozens of, the total capital of tens of billions of stakeholders involved in the chain of currency related cases.

Of course, users also need to improve their own awareness of risk prevention, never be carried away by the so-called high rate of return on investment, never be deceived by some exaggerated propaganda, prudent investment, rational investment. If you or your friends and relatives are unfortunate enough to encounter such incidents, you are also welcome to come to us for consultation.

Eric Yu:I feel for ordinary users, this screening threshold is still relatively high. To understand whether a blockchain project is real or not, you first need basic concepts, such as knowing what a public key is and what a private key is, and how to query and use a blockchain browser. You need to learn and understand the basics.

The second is to understand what the user really controls. The little thing about this is that if you control your own wallet, you can import the private key into any wallet and you can use the assets in this. For example, assets in Plustoken, which you can't use with other blockchain wallets to use assets, are obviously not a real on-chain wallet or asset, just a bunch of numbers for you to see.

So we think as a newcomer or small white users, to master certain basic knowledge is very important. And don't be tempted by high returns. Pay attention to the risks.

The host: From real life into the block chain, the virtual world, everyone is actually represent with a string of letters, we call it the address, and the purse is a necessary connection address and chain application entrance, but a lot of people because remember assets loss, as a result of the private key, I heard a very interesting company Xapo, their rich specifically for keeping the private key of the currency, They put the private key hundreds of meters underground, similar to a bank vault, off the network for storage, so will the storage of the private key exist forever, as long as you enter the blockchain world, you have to find ways to keep your private key?

Hu super:Indeed, like the famous case of James Howells in the industry, because of the loss of his private keys, 7,500 Bitcoins in his wallet were no longer usable, equivalent to $400 million, he no longer belongs to him. Incidents like this are a reminder of the importance of keeping your private keys safe.

Whether the hosting of private keys will exist forever depends on market demand. Blockchain's unique, highly secure encryption algorithm does sacrifice some ease of use. Before people get used to this new form of encryption, they can not keep it well by themselves, and the need for such third-party private key cold storage should always exist.

Eric Yu:The private key has a certain geeky nature, which is related to the geeky users of Bitcoin in its early days, and it also has the advantage that this backup has the only certainty. As long as you know the private key, you can restore your wallet, no other conditions. The disadvantage is that it is easy to get lost and stolen. For example, if someone is taking a picture of you copying a mnemonic word, that person will also have access to the wallet.

This is where, from a wallet development point of view, it's going to be solved or it's going to be revolutionary. There are probably two ways to solve this problem: one is for custodians of compliant custodian services, which could even be protected by traditional insurance companies. Coinbase is an example of a company that recently went public, and they have a service that is hosted for large institutions. The other is the main research direction of wallet, making smart wallet. The wallet would get rid of private key backup and mnemonic backup, and its recovery and recovery process would be more like the traditional bank password recovery process. The wallet is bound to the user's identity and retrieves the private key through authentication. We think this is a big direction, and this approach is very suitable for new users who are not familiar with blockchain and public and private keys.

At present, the threshold of hardware wallet is also relatively high. We believe that it may be bound to mobile phones in the future. Mobile phones, as devices of hardware wallet, can provide the underlying encryption algorithm to reduce the threshold of using hardware wallet.

The host: Will the wallet be an application that we underestimate now? People pay too much attention to on-chain applications, such as DEFI, NFT, etc., hoping to attract outsiders with ecological applications. But from another point of view, if we make the wallet, a necessary entry point, more Internet, will it also attract a lot of new traffic?

Eric Yu:Yes, we actually see the whole wallet sector growing along with the industry. Recently we have seen a significant increase in the number of users and downloads of wallets. From our point of view, blockchain wallets are still playing a relatively underrated role. If we compare them to the traditional Internet, we can see some tracks. For example, you might think of Bitcoin as an HTTP protocol, relatively low level; Think of exchanges as traders, offering more of a medium of exchange; Wallet is more likely to be compared to the browser of the Internet. A symbolic order of magnitude is that when the browser becomes popular, the number of users of the Internet has exceeded 100 million and reached the state of 100 million.

When the blockchain industry focuses, it marks a rapid development of the industry. We think of the wallet as an aggregator for creating value in the digital world, where we live in a world and a society where we spend more and more of our time, whether it's painting or doing arts and crafts. For example, houses or paintings will be built in the game, so these values will gradually be fixed in the digital world, and the wallet will serve as the entry point for display and manipulation in the world.

Of course, there are two preconditions when we look at the process. One is the maturity of the application in the digital world. It is clear that there is still a relatively early stage of immaturity. We believe that this change will be addressed as wallets grow and users grow. The second is the reduction of the threshold, which is the direction we have been working on. We develop and launch smart wallets to make it more convenient for users to enter the blockchain field and make users have the experience of Internet products. When these two points mature, we think it is close to the point where we can bring more users into the blockchain space.

Host: I have heard the comments of outsiders on Bitcoin before, saying that the biggest value of Bitcoin is the application of money transfer in the grey industry. But in fact, Bitcoin trading has long been out of the law. Two guests can explain to you what is the value of Bitcoin now?

Hu super:We're going to talk about it again today, with a new frame of reference. A few days ago, Li Bo, deputy governor of the People's Bank of China, talked about Bitcoin and Stablecoin at the Boao Forum for Asia. There were some latest qualitative and expressions. The day before yesterday, at the invitation of the media, I wrote a signed article, in which I made a comprehensive analysis. If you are interested, you can search it online.

For example, Vice President Li Bo said that "we think bitcoin and stablecoin are crypto assets", which may be overlooked by many people. As you may know, the central bank previously defined Bitcoin as a "specific virtual good", and the terms cryptocurrency and crypto asset have always been the industry's own terms, which have never appeared in the official context. The direct designation of Bitcoin and Stablecoin as "crypto assets" suggests that regulators are well-informed about the market and open-minded. To some extent, this change in expression means that regulators have absorbed some of the industry's conventional wisdom.

For another example, Vice President Li Bo also said that "crypto assets are an investment option. It is not a currency in itself, but an alternative investment", which is one of the core points of this speech. It can be said that this is also the central bank based on the deep understanding of the development trend of the global crypto market, and made a new judgment advancing with The Times. As I have said many times in previous interviews, cryptocurrencies represented by Bitcoin and digital RMB are totally different. Digital RMB is the digital version of legal tender, while Bitcoin is more like an investment target. In the past six months, many well-known traditional capital giants on Wall Street and emerging technology giants around the world have invested heavily in the strategic investment of Bitcoin, which undoubtedly proves that Bitcoin has entered the mainstream investment circle.

Overall, the currency system has accurate in almost all of the world's countries and regions to work more than ten years, the price also reached new highs, after through multiple cycles of many top capital and companies to war, especially in the current difficult recovery under the background of global economy and sovereign currency drain substantially in many countries, Bitcoin's safe-haven attributes and strategic reserve value have also been recognized by more and more institutions.

Clearly, in today's context, it is ignorant and arrogant to simply classify Bitcoin as a "scam." The technical characteristics and economic model of Bitcoin itself determine its scarcity as an asset. At the same time, due to its borderless characteristics, Bitcoin is accelerating its flow around the world. In the new global financial competition in the future digital age, the strategic value of Bitcoin cannot be ignored.

Of course, I would also like to take this opportunity to do a friendly reminder, Bitcoin and other crypto assets investment cognitive threshold and professional threshold are relatively high, and belong to the high-risk targets, do not recommend non-qualified investors to enter the market rashly, at the same time, we should pay special attention to distinguish many malicious fraud under the banner of blockchain and crypto assets.

Eric Yu:Bitcoin adoption trends have changed. While the white paper was originally about payments, the consensus was that it was a store of value. The users of Bitcoin tend to be young, and for the young people who have grown up in the Internet generation, Bitcoin is their gold. The old generation bought gold as a store of value, so the new generation will store bitcoin as gold. Another trend is that more and more companies are using bitcoin as an asset allocation, which also shows that there is a strong consensus that Bitcoin is a store of value.

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