The Echo-nomist

Crypto has made many trips to the moon and back this year. Cryptocurrencies gained popularity this year. Their prices fluctuated because of Elon Musks’ tweets, rumours about government clamp downs etc. It was adopted as the legal tender in El Salvador and used extensively in the NFT market. Let’s look at some of the major events that went down in the world of Crypto…

NFT

NFT’s took the crypto market by storm in the beginning of 2021, It took everyone to understand what exactly an NFT. And when they did, the market boomed. NFT sales volume totalled $24.9 billion in 2021, as compared to just $94.9 million the year before (source: Forbes)! Even as the market did exceedingly well, the question lingers, is this a fad or not?

While that question remains unanswered, the youth explored some of the opportunities in the industry. Online marketplaces were made to provide a platform for buys and sellers of NFT to connect.

People used NFT as a tool to connect with their fans and as merchandise. The football team PSG, release token’s for their form in the form of non-fungible tokens which can be used by them to purchase official merchandise and pay for their events. Even their players are paid a part of their salary in the form of these tokens. NBA Top Shot, Rario for cricket, F1 Delta Time etc. are NFT marketplaces where you can buy, sell and trade cards containing highlights and historic moments in their respective sports. It’s another way for fans to interact and became extremely popular over the past year. Music artists release some clips of their songs to sell as NFT which appeals to the fans. And this is just the beginning. There’s unlimited potential left to be unlocked in this industry…

Here are our NFT stories:
–Non-Fungible Token | Can you own memes now?
–1st era of NFT: When Fandom meets Technology

El Salvador

El Salvador received international attention as it became the first country in the world to formally adopt a cryptocurrency as legal tender. They made the US dollar their legal tender back in 2000 and wanted to end its reliance on the dollar.

Adopting crypto as legal tender comes with its own set of problems. Cryptocurrency is highly volatile and unpredictable. There doesn’t have to be a specific reason for the price of a currency to rise or fall. Besides, Salvadorians aren’t the only people using bitcoin. People around the world are influencing the price of bitcoin, which is affecting El Salvador. However, the president of the country hopes that it will boost financial inclusion, foreign investment and generate jobs.

The International Monetary Fund’s board is on-board with their crypto plan. They urged El Salvador to reverse its decision to make Bitcoin legal tender in the country, pointing to the financial risks tied to it. The central bank can’t influence the price of its own legal tender and they can’t control the money supply in the economy. This can pose a problem when it comes to economic control.

The president, Nayib Bukele, acquired roughly $21 million worth of Bitcoin in September. They recently spent an additional $15 million, which brings them to just over 1,800 bitcoin (source: ETF database)!

More about this story:
–El Salvador’s millennial approach

Poly Hacker

Someone pulled off the biggest DeFi hack ever, when they stole $611 million! The hacker was able to exploit the proxy locks of Poly Network on three different crypto chains. The hacker, dubbed ‘Mr. White Hat’ by the Poly Network, announced that he was ready to “RETURN THE FUND.”

After this announcement, Poly Network received a token called “the hacker is ready to surrender,” which began the process of returning the money he had stolen. By the end of August, the entire amount had been retuned by Mr. White Hat. Poly Network said they would give the unidentified person $500,000 bounty for helping eke out the security flaw. They even offered him the role of “Chief Security Advisor.”

Hackers don’t usually return the money they have stolen, hence it shows the increasing difficulty to launder the stolen coins, whose movement can be tracked due to the bread crumbs they left behind on the blockchain. This incident looks like something right out of a movie.

It seems like he really enjoyed the game because he started a little game where he gave people clues about himself and they had to guess his identity.

Here’s our story about Mr. White Hat’s hack:
–Poly Network: The white knight rises

Colonial Pipeline

Colonia pipeline aka one of the biggest gas pipelines in the US and supplies around 45% of the fuel to the East Coast, got cyber hacked this year. The hackers have taken over operational control of the pipeline using ransomware provided by the Ransom-as-a-service company, DarkSide.

The hackers stole a lot of data and used it as their hostage. Colonial was threatened that the stolen data would be leaked to the internet and that the information inside the computers would remain locked unless they are paid ransom 💰. With the hackers having control over their systems, they were forced to shut down all pipeline operations temporarily. The shut down caused a hike in gas prices, especially in Atlanta and Tennessee.

Eventually, Colonial gave into their demands and paid $4.4 billion worth of Bitcoin to reclaim their system. While Bitcoin is hard to track, it’s not impossible. It may require sophisticated government intelligence to do so. The FBI was able to track down the digital wallet where most of the ransom money was kept.

Ironically, in a statement on their website, the hackers said “Our goal is to make money, and not creating problems for society.

Here’s the entire story:
–DarkSide of the moon

Ransomware

While crypto became increasingly popular this year, so did ransomware attacks like Colonial Pipeline. Ransomware is a form of malware where they lock and encrypt the victim’s data and demand ransom to restore access. Basically, the take your files and data as hostage.

Getting your data stolen is a big deal and more troublesome than you’d imagine. Business have to make a decision about paying the hacker or not. The longer they decide, the more money it costs them. Upon paying, most of them do get all of their data back. However, when the companies start paying ransom, it incentivizes the hackers to keep going.

The frequency of ransomware attacks has increased during the pandemic, with a 62% increase year-on-year (304 million attacks in 2021 itself!). JBS, the world’s largest meat producer, was hacked. Some of the other major hacks during 2021 are: Kia Motors, Kaseya, NBA’s Houston Rockets.

Here’s a story about the Ransomware industry:
–When data is held hostage: Ransomware

Crypto has had quite a year, clearly.