What Does the Twitter Hack Mean for Bitcoin? Crypto Reacts
For five hours, all of Twitter became Crypto Twitter.
Wednesday, one of the biggest digital hacks in recent memory went down. A hacker, likely a Bitcoiner, gained access to Twitterâs administrative functions and began a crypto-scam campaign. Some of the worldâs most notable accounts on the site started offering to double their investments if they sent funds to a Bitcoin wallet.Â
Itâs the type of scummy behavior Twitter promised to address back in 2018.Â A federal examination is likely. So, too, is a permanent stain on Twitterâs reputation. Whatâs unknown is how this incident will affect perceptions of Bitcoin, blockchain and the crypto space, which is once again thrown into the news cycle for all the wrong reasons.
CoinDesk convened a panel of experts to discuss what the long- and short-term consequences of this scandal may be for crypto, and whether itâs a watershed moment to finally decentralize our social media.Â
- Anil Lulla co-founded Delphi Digital, a research and consultancy firm specializing in crypto assets
- Donna Redel is board member at New York Angels, an angel investment firm and frequent speaker on the crypto conference circuit.
- Steven McKie founded the venture capital firm Amentum and built a Handshake compatible web browser in his free time.
- Brekkie Von Bitcoin â A crypto influencer of sorts, Brekkie is known for relentlessly advocating for the coin.
- Matt Hill is CEO of Start9 Labs and an advocate for digital sovereignty.
- Vinay Gupta, inventor of the Hexayurt, is now pursuing the radical startup, Mattereum, which is attempting to create a digital twin for all physical items, so humanity can better manage and distribute increasingly scarce natural resources.
Their responses have been edited and condensed.Â
Will this increase in the attention to Bitcoin be good for crypto in general? Or will this attack/taint the image of Bitcoin?Â
Lulla: I believe there are some positive benefits to Bitcoin. Anyone who works in crypto got messages from friends and family asking what the scam is all about. They were curious to know when they saw the word âBitcoinâ on TV. So maybe this is an opportunity for us to explain how Bitcoin works. We can outline that this isnât a Bitcoin scam and it was not hacked; Twitter got hacked. Obviously, it is going to increase attention, though whether thatâs good or bad is up in the air. These little things shouldnât really affect the fundamentals of Bitcoin.Â
Redel: From my perspective, the short-term and long-term impact on Bitcoin from this hack is irrelevant since the emphasis should be on the illegal activity and breach of security. Twitter should be concerned about its short-term and long-term reputation.
McKie: I think itâs not going to bring much attention to Bitcoin, aside from the general discourse for the next week or two. Thereâs just so much going on.
Von Bitcoin: As someone who believes that Bitcoin is our best shot at a more prosperous future for everyone. â¦ Iâm personally only concerned on whether the increased media attention is good for Bitcoin, not crypto in general. But at this stage, I think the adage still holds that all press is good press for Bitcoin.
Hill: The increased attention to Bitcoin might be good for crypto prices in general, but no amount of attention is going to save most of the projects out there from total collapse.
Gupta: Itâll be a few stories about Bitcoin in the papers, but I donât think itâll spur adoption.
Will this reinforce existing biases against crypto being associated with criminals?
Lulla: This is a wider topic. People have predetermined biases. Most people in the space by now have been open-minded enough to understand this. Of course, thereâs always gonna be a subset of people who always look for information that will always support their biases or their positions.Â But at the end of the day I donât think it fundamentally changes anything. It really hasnât changed anything so far.Â
McKie: I donât really think anyone will care. Itâs Bitcoin. It doesnât do anything to make it more infamous for those that already didnât like it.Â
Von Bitcoin: Well, it didnât do us any favors with regards to that common bias. There are already plenty of people calling this a âBitcoin Hackâ when obviously that is not the case at all. I am hopeful though that the fallout will be limited. Take this personal anecdote for what it is, but yesterday I spoke to my father about the hack, and despite the fact that his knowledge of Bitcoin is limited, he understood that the criminals were merely using Bitcoin, and that Bitcoin itself hadnât been hacked.Â
Hill: For some, yes. But I think most people are smart enough to know there were plenty of criminals before crypto.
Gupta: Yes, itâs a stuipd mess, and itâs going to be widely understood as a stupid mess â yet more fuel for the people who want to believe crypto is for scammers.
Could you speculate into the hackerâs motivations?Â
Lulla: Itâs still early to say because weâre still learning about what happened with the hack. Twitter is going to be really impacted by this because thereâs gonna be a lot more scrutiny on how this happened and what exactly happened here. The whole motivation of the hacker was to get Bitcoin, but the damage could have been worse.Â
Redel: First, the hack into peopleâs emails is an illegal activity. Secondly, the impersonation of individuals asking for transactions in bitcoin is simply another version of other illegal âscamsâ that ask people to send dollars to bank accounts or other locations.
See also: How to Spot a Crypto Scam
McKie: Iâm not quite sure. They probably got access that they werenât expecting and realized they had an opportunity and did something without planning. Itâs really a test of why they didnt do anything with Donald Trumpâs account, which would guarantee an immediate shutdown of whatever process they were exploiting.Â
Von Bitcoin: Should I put my tinfoil hat on before I answer? On the surface it seems like the hacker just wanted to steal bitcoin. As others have noted, the hack itself appeared very clumsy, but if that clumsiness was intentionalâ¦ then there may have been an ulterior motive. Perhaps it was a bad actor with other vested interests trying to discredit Bitcoin or Twitter, but I think itâs too early to say.
Hill: I can only say what I hope their motivation was: to expose the fragility of centralized systems.
Gupta: Well, if the goal was to make money from a massive Twitter 0-day, I have to say there were probably more effective ways of doing it. I was really surprised there was no political messaging, either!
Is this a wake-up call to decentralize our communications systems?Â
Gupta: Decentralized systems arenât necessarily any more proofed against these kinds of exploits â protocol bugs are just as bad, when they occur.
McKie: I donât think Twitter can do a damn thing. When you have internal social engineering by nefarious actors, taking advantage of admin tools that are there for a particular reason, thatâs just the nature of a centralized organization. Thereâs employee churn, thereâs a lot of varied levels of security and accountability, thereâs absolutely nothing you can do. Thereâs no security organization, anywhere in the world, you could have paid to prevent this sort of internal attack. You just have to accept that. Does that build the case for decentralized web? Yeah, sure. But no one immediately will think that, except for the people already in our crypto echo chamber.Â
Lulla: People need to understand that Twitter got hacked â a centralized system got hacked. At the end, it is an issue with Twitter. It can take the shape of a wake up call for people. If this didnât happen for instance there might be some people in the world who would never even imagine a situation like this. This is adding support for our community rights and decentralized systems of communication.Â
Redel: Safeguarding privacy is important and should be a high priority for all.
Von Bitcoin: At the very least itâs a wake-up call about vulnerabilities, and I think that Twitter is already taking it very seriously. Jack [Dorsey, the CEO]has hinted at wanting to decentralize Twitter, so I imagine this event might fast track those plans. Unfortunately there is a chicken and egg problem with trying to decentralize communications, and frankly for some use cases, centralization means a more efficient system.Â
Hill: It is yet another wake up call. And like most wakeup calls, it will be greeted with a snooze button and a growing sense of anxiety.
- Money Reimagined: This Isnât Good for Bitcoin
- Blockchain Bites: Binanceâs Bitcoin Mining, ConsenSysâ Legal Trouble and Why Politicians Blame Twitter, Not Bitcoin
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.