53 – How’s Bitcoin doing? Who’s left in the metaverse? And unpacking the Binance hack…

Tracey: [00:00:19] Welcome to the Crypto Curious podcast designed to help you navigate the dynamic world of cryptocurrency. We're here for anyone who is interested in crypto at all. Maybe you've already dipped your toe in the water. Or maybe you don't know anything about it. This is a very beginning, but we recommend heading back to the early episodes to get your footing. However, if you think you're ready to dive in headfirst, then let's do it. Coming up on this week's episode, we touch on Bitcoin's performance since mid-year. We talk about the Binance hack and we touch on what's happening in the metaverse. My name's Tracey and I'm joined by my pals, as always, and colleagues from the Bamboo App, Blake and Craig. Hey, guys. How are you doing? Pretty well. 

Blake: [00:00:58] Tracy. How are you?

Tracey: [00:00:59] I'm not too bad today. Hey, Craig, are you going? 

Craig: [00:01:01] Good. Thanks, Trace.

Tracey: [00:01:03] What's happening? We all. 

Craig: [00:01:04] Not much. I hope this episode is more exciting than the market recently because it's been a bit boring. But that's why we're here. 

Tracey: [00:01:12] As you indicated, it has been a little bit vanilla in the market out there. Craig Not a lot happening. So what has happened to the price of Bitcoin since mid-year? 

Craig: [00:01:21] Well, it's gone down similar to everything else, but a little interesting piece of data that's come across my desk, Tracy, is that Bitcoin's correlation with gold has hit its highest level in over a year. So Bitcoin has been, as you know, pretty correlated to equities. But now recently, Bitcoin is becoming more correlated to the price of gold. So since Bitcoin popped and hit above 20 K, it was a 3% gain. That was two weeks ago and gold had the exact same gain gains in the exact same period. So if Bitcoin starts to act like a digital gold like we always say it will, that'd be promising news, but the jury is still out on it. 

Tracey: [00:02:06] Your thoughts there, Blake? 

Blake: [00:02:07] It could be the case that, you know, through different periods, in different environments, your cryptocurrency correlates with different asset classes depending on what's going on. 

Craig: [00:02:17] Or maybe like in a proper bear market, bitcoin will correlate to gold because everyone's sort of freaking out and then when the bull comes back, probably will correlate closer to equities I'd say. 

Blake: [00:02:28] I don't know if we've seen that. I think it's over the last six months we've seen very close correlation to the S&P500. 

Tracey: [00:02:35] Mm look and I think, you know, there was some more news last night from Jamie Diamond saying that he's calling a recession is going to happen in the next 6 to 9 months. I was like, dude, isn't it happening now? But if he's calling it to happen in that amount of time, then you know what? What does that mean? It's another run to gold. Does that mean that potentially another run to Bitcoin. 

Blake: [00:02:58] Will if the Fed keeps rising interest rates? What we've seen is that the US dollar just gets stronger and stronger and that's where people are parking their cash. 

Tracey: [00:03:06] Sidebar Did you see Ark invest to open letter out yesterday having a go at the Fed for hiking interest rates. 

Craig: [00:03:15] Because isn't isn't Cathie Wood down like 90%. 

Tracey: [00:03:18] 78% now I think 78% from their all time highs. 

Craig: [00:03:22] So it's a good strategy. Yeah, yeah. I mean if you don't ask, you don't get it's like asking for a pay rise, you don't ask, you don't even know. The answer is always nice guys. 

Tracey: [00:03:30] Just stop with the rate hikes would ya. Just give it a rest. I think we'll leave it there and move on to our next story. There's a roundtable discussion happening right here in Australia this week about Cbdcs and this is going to open up discussions around exactly what money is and how things will work moving forward. Blake, you've got some thoughts here. 

Blake: [00:03:50] Yeah. So the RBA and the Digital Finance CRC are collaborating to do proof of concept or design a cbdc, which is a central bank digital currency. You know, the vision there is that one day we won't have paper money or you know, we won't be using the ledgers of banks to settle transactions, but rather we would be using the ledger of a blockchain like your Etherium or one of the private consortium style blockchains that are available and often designed for these purposes. And you know, what's really interesting to me is that, you know, the future of money, you're potentially isn't as stagnant as, you know, the current technology that's used today and your money in the future could be used more like a protocol or like saying that you could build on top of their field applications if your data ingestion engines, it being somewhat open source so anyone can can build on top of these protocols. So really it's a bit of a paradigm shift in relation to how finance is managed. 

Craig: [00:04:56] The question I have is I've heard. Say as more so a settlement tool in the back end so you know RBA can dispatch coins or whatever it is in the back end and it's a lot quicker and easier. But I haven't heard the conversation about replacing cash. Do you actually think that's a reality? 

Tracey: [00:05:14] There will be a two tier money system for quite some time before that actually happens.

Blake: [00:05:18] Yeah, but eventually I think it's going to completely go digital. 

Tracey: [00:05:22] It will be. You're looking at ten years time. 

Craig: [00:05:24] Ten years, surely longer than that to we now. I think there'll. 

Tracey: [00:05:27] I think there in ten years time there'll be like a two tier money system and then it'll push towards that in you know, in years after that. 

Blake: [00:05:34] Yeah. But you know the technology for auditing, you know, could potentially be built on top of these cbdcs or the protocols that they rely on, you know, instead of using different systems to, to audit. So yeah, it will be really interesting and exciting to watch that space develop. But I know that there's also a lot of a lot of people concerned about, you know, the RBA and the institutions like the ATO then having too much access to data and, you know, potentially abusing it. So certainly going to be a fine line. 

Craig: [00:06:09] 100% that's going to happen.

Tracey: [00:06:10] Look, I think there's going to be a lot of discussions, you know, a lot of input to see where this goes. And it's certainly not going to be something that happens overnight. It's going to take a lot of time. So watch this space. The next story, the Celsius dock story. During the bankruptcy proceedings for the Celsius platform, the identities of thousands of its customers has been revealed in court filings. So this is really unfortunate. So what happened was to avoid regulators, the Celsius classified its customers as creditors and not customers. And this is what led to the exposure of personal information. So apparently the court wanted to show that Celsius executives withdrew millions of dollars before the company went bankrupt, apparently with the top three executives that withdrew this 50 million. But in the process, the data of all the users was leaked, the names of balances, the transaction IDs, everything. Craig You're quite across this story and you were telling me a bit more about it. But this, this is this affected a lot of people and it's pretty poor form and you know, it's not a good look. 

Craig: [00:07:15] Yeah, massively poor form. So there's a website actually called Celsius net worth dot com. It doesn't show bank details or show, you know, anything. Just shows the name and how much people have lost or how much people had in their Celsius wallets. Yeah, the top one has lost 40 million. One person.

Tracey: [00:07:34] Are out. That is madness. Wow. 

Craig: [00:07:38] Pretty insane staff and quite worrying that this data is now public. So I was actually searching for my own name. Even though I never use Celsius, but someone that had my name lost about 4 hours. So. 

Tracey: [00:07:51] Oh, so sorry to hear that guy Jackson. Is there a class action against them for this breach?

Craig: [00:07:57] There's already multiple emails added to the list. 

Tracey: [00:08:00] They got no money. So it would be pointless and futile at this point, wouldn't it? 

Craig: [00:08:03] But and what's and have you seen that you're saying before that someone was tracking what's his name, Kaczynski's wallet. And he's been selling, like every single day. This is the danger with some of these projects and putting all your cash in right now. 

Tracey: [00:08:17] I just think this is a really sad situation for all those people involved. And it just shows I don't know what this shows really, because they were very relaxed with people's information, you know, and went to try and bring down three top execs. They were quite, you know, loose and candid with everyone else's information. 

Craig: [00:08:35] But actually, I feel really bad for the Celsius workers because they built a great brand, they built a great company, and now they've been caught up in this complete shemozzle and everyone sort of hates them, even though, you know, they had no idea. 

Tracey: [00:08:49] Well, you know, I really hope that we don't hear any more from this Celsius story. You know, I kind of thought that we were over and done with when we talked about, you know, Alex taking that money a few weeks ago. But now, you know, this is the next chapter in the story. So hopefully we kind of close the book on this and maybe one day hear about people getting some of their money back. Who knows? But we'll wait and see and we'll leave it there. Moving on to our next story. This one's been in the news a lot this week. Also, it was the Binance hack. 

Audio Clip: [00:09:18] Binance saying a cross chain bridge linking with its BNB chain was targeted, enabling hackers to move tokens off the network. 

Tracey: [00:09:27] So unfortunately, this has been a big one. The hackers have stolen around 570 million in tokens from Binance. In a rare blow to the world's biggest crypto exchange, Binance initially estimated on Friday that the tokens worth around 100 million had been taken pause in the operation for approximately 8 hours. However, the exchange later disclosed that the hacker had taken around 2 million of the cryptocurrency BNB, which is Binance's own digital token with a value of around $248. Age. So the hacker targeted the BSP token hub, which is a bridge between the two Binance ah systems. Craig You know a little bit more about this one as well. Do you want to explain a little bit further?

Craig: [00:10:09] Yeah. So the tokens were actually stolen from Binance Exchange itself. I don't think any users were affected, but yeah, as you mentioned, this is a rare blow for Binance is seen as sort of the safety net of a lot of crypto users. They have so much liquidity, the tokens worth its tokens in the top ten. So you can assume that any mishaps they do have the cash to sort of come back from. But yeah, as you mentioned, 2 million baby tokens were stolen. The hackers, you know, were moving money around a lot, trying to take their tokens up, stolen into other assets. But this is a common topic we've seen in the last few months. Bridges are very susceptible to hacks because they're targeted. And don't you explain to me why? Trace? 

Tracey: [00:10:55] Yeah, I would actually. 

Craig: [00:10:57] I'll let you know. So three hacks have happened in the last six months. Nomad Signups and Ronin, which was the Axie, had 2 billion last year. 2 billion? That's insane. So why are hacks so you know what people target? BRIDGES So the idea of a bridge is when you move assets to another chain. So an example could be that, you know, you've got your Etherium on the Etherium main chain and you want to bridge to arbitrage, which is a layer too, because arbitrage has cheaper gas fees. You might know, that might be a dapp that you want to use on arbitrage like go pax, which is an options trading app. So you need to bridge those assets across. You can engage in the second ecosystem. Now what that means is with a bridge you need a lot of liquidity on both ends because if you have five Etherium that you want to change to arbitrage the arbitrage bridge dates five Etherium to grant you so you can move over so there are a lot of assets on both sides. So that's why it's sort of such a huge target. And these new things like what Binance has done, these Trustless bridges, you're relying on code, not on people, not on systems, you're relying on pure code. And every software has bugs and we've seen multiple bugs being exploited in the last year. 

Tracey: [00:12:22] So it's interesting as well because these bridges are decentralised. 

Craig: [00:12:26] Yeah. So some of them are sort of sign ups, one nomad Ronan the arbitrage one they're relying on code only and people are, you know, exploiting them based on, you know, the bugs within the code. 

Blake: [00:12:40] One of the possible causes for this as well is that, you know, lots of money is poured into these bridges because some of these bridges have been highly profitable. And there's definitely a lot of pressure, not just from the investors, but from a market like point of view to get these products to market. And, you know, as we've seen, Etherium and Bitcoin have really been tried and tested to be trustless over the last, you know, 7 to 12 years, whereas these things get put up, you know, almost by the month. And, you know, there's just not that many quality smart contract developers out there, you know, that it's just not tried and tested enough. 

Tracey: [00:13:23] So would they have gone after BMB for a reason, which is because it's massive and it's one of the one of the bigger ones out there. So they knew that, you know, it would have had quite a deep liquidity pool 100%. 

Craig: [00:13:34] I mean, what are the other situations in crypto that have that much liquidity in the one area besides maybe bridges and exchanges, which obviously we know how much exchanges are targeted. 

Tracey: [00:13:44] Yeah. So they were actually only able to steal 100 million worth. They were going after like 560 million, which would have been one of the biggest hacks in crypto history, I think. But but, but Binance were on top of it. That's how slick they are. I managed to stop it at 100 million, which is good for them. 

Blake: [00:14:04] Essentially. I see it as a bug bounty. You know, often when you identify bugs in smart contracts and in code, the company will give you a reward for, you know, telling them about that bug. But, you know, otherwise, in some situations, you know, these hackers, they exploit the bugs and really, you know, it's no one's fault but Binance at the end of the day. 

Tracey: [00:14:28] Wow. Or when to wonder if they would have got paid 100 million for telling him about that bug. Interesting. But like I said, that could have been a lot worse, but still 100 million. Yeah. What was the big one this year that we talked about was actually how much was in that one case? 600 was 600 million. Yeah. 

Craig: [00:14:46] That's the biggest bridge hack in history. 

Blake: [00:14:49] It kind of reminds me of the Wild West in and bank robberies, but just a modern day version of it. 

Tracey: [00:14:55] We'll leave that there , that's huge sums of money onto an. Next story. I'm so lonely. So that was Justin Bieber singing Lonely in the Metaverse, would you believe? And maybe that's what cleared everyone out of the Midwest, because apparently it's pretty lonely in the metaverse right now. At depth, radar data is suggesting that Decentraland has apparently 38 daily users, and that's for a $1.3 billion ecosystem. This surprising data suggests that the metaverse platforms Decentraland and Sandbox each have fewer than 1000 daily users, apparently. And this is despite that massive valuation that I just mentioned. These platforms say that these numbers don't tell the full story. I'm sure that's what they're saying. What exactly is going on here, Blake? You were the one that flagged this story with us during the week and we had a bit of a laugh. But yeah, what's going on with these metaverses, do you think? 

Blake: [00:15:55] To be honest, I don't really know. I haven't spent much time on them either, like everyone else, apparently. But I just don't know why we can't get our valuation to $1.3 billion without thousand active users. 

Craig: [00:16:07] I think I think it's a lot to do with things like, for example, sandbox. So at the crypto call actually and I was playing, you know, the game that they had in their metaverse that's obviously not released yet. It could just be a case of people have stormed on board or the NetEase and waited for the game to be properly created because it's not right now alone. Decentraland you can play casino or you can play poker. Sorry. 

Tracey: [00:16:29] Yeah. That's why I think that perhaps those numbers aren't quite right. I know that there's a lot of people at any given time on Decentraland playing poker, so they may not be officially in the land walking around, but they're there at a table playing poker, which I know brings their numbers up a fair bit. It's not the whole point of the land. 

Craig: [00:16:45] But the market didn't even react to this. They still they're still holding their valuations. And maybe the numbers don't tell the full story. Maybe there's probably so many assets and stuff tied up in that ecosystem that, you know, now they've got the funding to. 

Tracey: [00:16:59] Oh, look, I think there's staggering numbers of how much money is still to be deployed into the metaverse. You know what I mean? We're still so far away from it being fully living up to its potential. I think that we're just still kind of scratching the surface on what it could be. And I think, you know, it was a big rush to, oh, my gosh, the metaverse VR goggles. Let's jump in there. And it's just a little bit underwhelming right now. So, I mean, I'm not. I think that there is still a long way to go. 

Blake: [00:17:26] And I think I raise the point, Tracy, that Zack's putting in 10 billion a year to build his metaverse. And at this rate, you know, these platforms may not even stand a chance.

Tracey: [00:17:37] Yeah, but look, then it was the news that came out just this week of him sending an email out to all these devs saying, please, you know, get involved and actually use what you're building. Because apparently they are not jumping in, they're not actually using it because it's so buggy and glitchy. They don't even like it.

Craig: [00:17:53] Or you've got your VR rules in the mail. 

Tracey: [00:17:55] Chase the. Yeah, there you go. The only way, you know, not. Not yet. 

Craig: [00:17:58] Well, wait until you play it. That's all I'll say. 

Tracey: [00:18:01] Oh, wait till I'm playing with your dad. Thanks for the code, Mr. Jackson. So once I've gotten and I've started to play, I'll. I'll say I'll see how I go. The metaverse. There you go. We haven't been huge fans of it here on crypto curious but again it's still early days and we'll see how that goes. But let's take a break there. And when we come back, we'll get into our short, sharp news bytes for the week. Welcome back to the Crypto Curious podcast. Let's move on and give you guys the short, sharp news bias, which I'm hearing on the street is a crowd face. So let's give it to you this week. News dropped just last night's song to start with this one Google guys did you hear this? Google Cloud and Coinbase are teaming up to build advanced exchange and data services together, so select Google customers will be able to pay for cloud services using crypto. This came out last night and seems like it's big news. Anyone have any thoughts on this? 

Craig: [00:19:00] Coinbase had their own wall, which a lot of users have similar to Metamask, so they've got their own Web3 wallet, so that'd be great if you can just click pay with Coinbase going through that way. 

Tracey: [00:19:12] That's also Coinbase to kick in some goals. What do you think? 

Blake: [00:19:14] Like, yeah, it's really cool, but I'm really I'm actually kind of surprised that Google didn't go down the path of you're starting to build out some of this infrastructure for themselves. They're very monopolistic in nature by taking out whole industries with new apps. 

Tracey: [00:19:29] Well, that just just shows you what they think of Coinbase then. You know, that's huge news for Armstrong, mate. Legend. Well done. Like what? What's next? 

Blake: [00:19:40] Yeah. FedEx has partnered with Visa to expand its debit card programme to over 40 countries, so people can have cash on the exchange or in their mobile app and then use an associated card to pay for their day to day expenditure. So yeah, this is huge and we're just going to see more and more of this. It's kind of interesting to me that, you know, we still need to rely upon these settlement layers, even though we're using like, you know, it's just kind of like, what am I trying to say? It's kind of like a trick. Like if you're not using the crypto for its purpose, you're using a web to settlement layer. 

Tracey: [00:20:16] Yeah, I know what you're saying. I think this is all part of slowly integrating and making the normies understand what's going on. Yeah, I know what you're saying. Craig goes up.

Craig: [00:20:26] So a dare for the moon. But there's NFT Project Proof, which is sort of the group behind it is allocating a total of two and a half million to the Dow and 35% of all secondary sales will go to neighbourhoods and the secondary project oddities in the form of eighth that's pretty that's I think that's market best rates so that's pretty good for the holders but I think they're like seven, eight or something ridiculous. So if you have one, let me know if it's worth it yet. 

Tracey: [00:20:57] They certainly are ones that haven't been affected too badly. With the NFT drops recently, pop stars are going to web3, so Warner Music Group is collaborating with open sees to great artists like Cardi B and Ed Sheeran, early access to new products and dedicated space on the open see site for up and coming NFT projects. WMG is also hiring for a position to help expand its footprint into the metaverse, so that's just another big name going forward. So more music groups are heading into the Nfts with the help of Opensea, which is pretty cool. What's next? 

Craig: [00:21:32] So Japan, which is known for technology advancements in the late nineties but sort of been lagging since then, they are getting amongst blockchain and crypto. So the Prime Minister of Japan said the Government will be making efforts to promote web3 services, including those dealing with nonfungible tokens and the metaverse. So we'll see where that goes. 

Tracey: [00:21:54] So Tobias looked at the CEO of Shopify, Tim, one of the top 20 richest Canadians in the world. He's a massive crypto nerd and he loves his nfts. He recently posted on Twitter with a picture of a Tyler Hobbs fan, India's collection, which is one of the nfts. It's kind of that swirly looking one that came out a few years ago. Right now, the cheapest one of those is around 125, and I reckon he was one of the earlier ones. So it's probably at least double that. But it's really cool to see the CEO of Shopify really getting behind the crypto and the Nfts. 

Craig: [00:22:25] For the Dunzo collection choice that's actually generative art. Yes, I think he's made a programme that spits these stuff out, which is the first of its kind. Pretty cool. 

Blake: [00:22:38] So another Web3 trademark alert. So the Formula One has filed for eight trademarks that include plans for an NFT and crypto trading, as well as a retail store for virtual goods. So as we see, you know, all our sporting institutions are moving into this space to look at ways to generate additional revenue. So yeah, we're going to see some are going to execute really well, others aren't and some are going to be collector's items for years to come and others are going to be worthless. 

Craig: [00:23:12] Good luck guessing which ones will. Yeah so more Binance news they are pitching in for Elon Musk Twitter deal we spoke about last week Elon Musk is now you know his hands are tied. He needs to go through the Triller deal. And bonnets guys are chucking in 500 mil just a little just a little help for months. So, as you know, Twitter had the nifty profile pictures. They've got the Twitter premium where you have to pay a little bit. So Bonds want to be on the cutting edge. And, you know, Elon Musk and Jack Dorsey had those chats on those text message chats that got leaked. And they're talking about making Twitter a decentralised, you know, sort of platform. 

Blake: [00:23:51] Yeah. Do you think this is a bid for the Binance chain to be the backbone of that decentralised plan? 

Craig: [00:23:57] Definitely. Definitely. There's some hidden agenda there. But honestly, like good online followings, Emily, like for them, is worth a punt. 

Tracey: [00:24:07] And that's it for this week. Hopefully you can join us again next week. Remember to keep the questions coming and tell us what you want to know about crypto. So send us an email at podcast at Get Bamboo Dot IO or follow us and all of our social media channels. All those details are in the show notes below. And don't forget to write and review us on your podcast app. Thanks and see you next time. 

Craig: [00:24:29] Go, guys.

Blake: [00:24:31] See you guys.