Coinbase Hack, Bitcoin, Sia, Cryptocurrencies, Blockchain, Cybersecurity and NFTs

This is Encrypted Ambition, a podcast about the builders rewriting the rules. Join Petronella Technology Group as we decode the ideas, challenges, and momentum behind tomorrow's business, technology, and leadership breakthroughs. You are listening to Cyber Security and Compliance with Craig Petronella. Visit us online at petronellatech dot com. Good afternoon, everybody.

Today's another exciting day on Bitcoin cryptocurrency. We got BJ. Hello. What day isn't exciting anymore on the cryptocurrency and cybersecurity? Yeah, really. Well, yesterday we had the Muzzle Reserve podcast for that day. That would be a more more significant day. Yeah, no kidding. So yesterday we had the big Facebook outage. What was it? Six hours of downtime.

Yeah, it was pretty long. So they're still investigating the cause or the root cause of it. Yeah, there's a lot of unhappy people. That's interesting that you that you differentiate because that probably is very important to say that because it is a factor. You know, like what's the cause and what's the root cause, right?

So, I'm sure that there'll be some investigations around that, as far as you know what the root cause was and what exactly happened there. But it obviously affected not just Facebook, but Instagram, Facebook Messenger, WhatsApp. It all came crashing down.

So it kind of goes back to centralization, right? The whole point of Bitcoin and cryptocurrency is decentralization. And what does that mean? So centralization, or traditional computing, is relying upon a single provider or a single platform. In this case, Facebook - they host their own stuff, but they're still centrally located, right? They have a data center or data centers that they spread their.

Their servers onto right, and they spread the workload there, but they're still not leveraging decentralized technology, and they're still subject to downtime or what's called a DDoS attack. If it was a bad actor that you know wanted to send surge traffic amounts to try to take the site down, which is where.

There's different DDoS mitigation techniques, but basically it's about spreading and the load. You know, this goes along with what you were talking about in regards to. Sorry, this is perfect live drama happening right now. I have Aaron's calling back to get on this podcast, and I have my Alexa linked now, so it's.

I can't silence it because it's my speaker in the background saying it, and I've never - I don't know how - I don't know how to. I just linked it all together, you know. So you could hear my phone ringing, and then and then you could hear Alexa come on, announcing the call from the speaker across the room. And for a second, I wasn't sure what to do because it caught me off guard because I was trying to deal with my phone as my speaker was.

Doing something. Oh gosh. Yeah. So, but that's that's a good. That's like it's a perfect example of this whole what's going on. It's like we're at that point, right? Of trying to tie it all together. But so Aaron was just calling, trying to trying to join this call. I think so. That's what that was. Okay.

Well, as I was saying about you know centralization versus decentralization, I was talking about you know the Facebook outage, and then I was going to segue into how BJ you were talking about SiaCoin and Skynet, and how they were hit with a DDoS attack, and how it survived. It was six days, I think you said, right?

Yeah, so so Sia Coin, Sia the Sia blockchain, which is was the foundational layer for the decentralized storage for the Skynet Open Protocol, which so so that is a decentralized set of it's a toolkit is the way they explain it, a toolkit and a decentralized internet protocol, and it was built.

On, were placed upon the foundational layer, which was the Sia blockchain, because it was the fastest blockchain, and so it's data storage but decentralized. And so there was an interesting example of the benefit of this.

A few weeks ago, there was a. It looked like a coordinated denial of service attack against the Sia hosts because of the nature of the way it works. There's a large number of hosts spread across the Sia blockchain network that are hosting data that Skynet accesses, and so during the event, I guess a bunch of these hosts were hit independently.

With this denial of service attack. So, but the the remarkable news from that was that the actual collective network didn't lose any data during this coordinated attack because of the nature nature of decentralized storage. You know, that's because that's because they had enough nodes participating in the network.

Than the the the ones that we were hit and deactivated or disrupted, they were outnumbered by the nodes that were active. Yes, so the active nodes took on the load and kept the network running, which is just like how Bitcoin works. You know, Bitcoin's it's always the target, right? I mean, the hackers are always trying to break the blockchain.

But Bitcoin's blockchain is the longest blockchain, and the longest blockchain is the most secure. So, every single second of every day that the network lives, it's adding to the chain length, and the longer chain is the strongest chain. So, it becomes stronger and more resilient every day. So, even if a country were to say, "Oh, we're going to ban Bitcoin," like China did, well.

The rest of the world is taking up the slack, right? So, as nodes drop, new ones come up, and as long as there's enough nodes, or even one still lit, the network still runs. Obviously, the more nodes, the faster the transactions go, and the less nodes, when there was disruption with the China ban.

Things slow down a bit, but as things speed up and slow down, the point is that there is no one power or central location or person or computer network to target to take it down. You can't take it down unless everyone in the world were all to agree.

That okay, we're gonna all take it down. We're all gonna push the power button all at the same time. You know, we can't we can't agree on ice cream flavors. How we gonna agree on that? That is so funny that you say that because just yesterday I had this funny thought to myself. I was like, you know what? We we could really learn something as a species by watching children, our children, because if you if you watch their behavior, like they're so united, right? Like they got their song "Baby Shark" to the all-time number one ranked, you know, YouTube video.

Like they they they united together, the kids did, and they got their video to the number one spot of of any YouTube video ever, right? Yeah, and so well, and it's it's it's all you know around. There's all different ways you can look at it too. But the you know the point is, like you know we were talking BJ about the Shiba Inu coin, right? Yeah, with the dog and how it's supposed to be like the.

At least the little bit of research that I did on it, it was like the arch enemy of the the Doge coin, right? Or Doge coin, however you want to say it. But anyway, my point is, it's it's a coin that somebody created. Oh well, I like this breed of dog. I'm going to create a coin around it. It may not have any realistic utility or value or purpose, like Ethereum. You know, you could actually run stuff and program smart contracts on the network on the blockchain.

And do stuff with it, right? Well, you might not be able to do anything really with this particular coin, but if enough people buy it and they feel value in it or they feel good buying it, the value is going to go up because it's supply and demand, right? My point is that it's really up to the world to decide what is worth whatever, right? You know.

That's an interesting point, and you know, before we move on to the one last thing though about what makes the technology of decentralization and blockchain so fascinating. So, back to that coordinated DDoS attack that the Sia host suffered, and no data was lost. But it's interesting.

Aside from what you pointed out, as far as you know, the the block the chain, you know, being an immutable record and all that. Aside from that, like they didn't lose data because it's decentralized and there was no one single point of failure. Because even if a couple of hosts are compromised, the data still exists elsewhere because of the way they're storing the data. It's not like one host has, like, say, if I store fifty gigabytes of data, it's not like one host has that fifty gigabytes of data. They're spreading.

Out across the network, but they're also on top of that another layer of protection and strategy that they use. On top of spreading it out, they've created like seed packets of the data and put those all over the place on the network. And so, if a host is hit with ransomware and all their data is locked up, they can piece together the data just by gathering what exists with all the other the other hosts.

And so it it really does. It's like the power of of unity, you know. It's exemplified in a lot. And it's similar to I don't know if you ever heard a par p a r, but back you know about twenty years ago or so, we didn't have the speeds of internet that we have now. You know, we were still.

Using modems and you know, we're just DSL was just coming out, right? So, faster broadband was just really getting started. My point is that Par Parity was a technology that broke up large files into smaller chunks and then dispersed them. And then I'm sure everybody remembers Napster and Kazaa.

And torrents, similar technologies. My point is that it's they're they're peer to peer. They work similar to how a blockchain works, where a lot of people join, they load the software, they join, they become a node on the network, and then you can share music, or you can download, you could upload music, or you can download music, or it doesn't have to be music; it could be videos, whatever it is.

And then they break it up the little pieces, like you were talking about. So the more modern approach is is blockchain and the different technologies that that can be decentralized on it. It kind of took that fundamental idea of peer to peer and and then upgraded it and enhanced it because now, and a perfect case example again is the side blockchain that's behind it.

For this example, because then on top of all of that that we just discussed, as far as the seeded data and the the multiple hosts, on top of that, they they have what again? That is this is their wording from from their their content online is constantly.

Monitoring and repairing the health of the data in real time, and so you know it. It wasn't really news; like you didn't hear about it in the news when they they were under. It was a. I was watching it like I was paying attention to it on their Discord channel and their core development group and stuff. And it was a pretty big deal. Like it was a pretty big hit. They were getting. They were under attack for sure.

Well, the fact that they withstood that attack and didn't lose any stored data, as compared to what we've heard of some other DDoS attacks and how crippling they were, you know, it was pretty big news. It wasn't really talked about much, but it was pretty big news just from a technical perspective. You know, that that that that it withstood that attack and whatever this this automation engine is doing to.

According to their words, monitor and repair the health of the data real time. Well, you know they definitely withstood that attack. Yeah, and and you know what came to mind as you were talking about that is you know Facebook, right? You know how Facebook is really under the microscope and getting criticized for ethics and things like that, and then the downtime issue. You know yesterday.

But then it's also, you know, I don't use Facebook, but Facebook often is used by folks to keep in touch with their family, friends, and they post various text, video, audio, whatever it is, right? So it's this platform. However, it's still "quote unquote" regulated by wherever it is, right? So, like, China censors it, and other countries censor it or ban it.

But what if we go into the future and there's a version of Facebook or a type of site like Facebook that is decentralized? Then there's there's literally no stopping it. There's no right, you know, it goes back to free speech, right? But there's no regulation, right? So as we go into this decentralized world, it the regulation really depends on.

Where you're logging in from, right? Right. So, so that, like, my point is that that you know, we we in our country rely upon the rules and regulations set forth by our politicians, right? And what you can't can and can't do at a state or a federal level, right? There's compliance around it. My point is, and and you can't go on Facebook and go.

Post like terrorist activity, you know, whatever they're they're going to censor that, right? There's going to be checks and balances. I wonder how things will work in the future with decentralization on a platform that isn't centrally owned by any one person. Like like right now, Facebook's owned by Mark Zuckerberg, right? But but what I'm saying is, like in the future, there could be a Facebook-like system or a site.

Right, that can be participated in by the masses or the nodes anonymously, or maybe it's not anonymous. I don't know. My I don't know what the future holds. There's technology in existence right now like that again on Skynet. So they've done a lot of upgrades recently, and they have something called Skyfeed, which is a social network hosted on Skynet.

And so it's again, it's decentralized, and you have so in tandem with that. So they have this new, they have apps on Skynet called Scaps, S-K-A-P-P-S, and there's stuff to you know host websites. There's stuff for social media stuff. So there's all these different things. And one thing that they do is they give you access to any apps that are on there, the data in the apps. It's open source, and so developers for apps can access those apps to build their apps upon and kind of link it all together.

Together, for logging in purposes, they have what's called Sky Links, and that link gets you into everything that's hosted there, like all the different apps and everything on SkyNet is accessible with your your My Sky, your My Sky login. Then they have the SkyFeed social network, but they recently unveiled a huge upgrade called Home Screen.

And with Homescreen, it's a decentralized front end, so the user interface. And so now, not only do you have your data stored, you can store it anonymously if you prefer. You don't need to create an account on SkyNet. You can just share data anonymously.

But you have then you have decentralized storage of your data, but you also have a decentralized front end. So the way that works is like if you use other sites and stuff that are on Web three O, which is what you know this is called this this new blockchain internet, blockchain based internet. If you have other sites on Web three O that you use, you can use home screen through Skynet and download.

You know, a copy of the - they call it the metadata, I guess. I don't - I'm not familiar with that term. But and they, with that, you then can store that version of the front end, the user interface, so that if there's later upgrades or changes or forks or anything that you don't personally agree with, you can choose which version to use, and you can do this with any.

You know, any compatible site on Web three o, and the list just seems to be growing daily on what's compatible with it. Yeah, yeah, t here is definitely some interesting use cases that are coming about with with Skynet. It's definitely exciting to read about. Well, and the other thing that's exciting is the upload speeds. So, I did a personal experiment myself. I had a video, and it was like this video in particular was like a ten minute video.

That I was trying to upload to different platforms, and I was getting very frustrated. This happened this weekend, and it was - it literally took me hours of my time. I was trying to upload this video to many different platforms, and it was only a ten-minute video, but it took so long.

I tried uploading it to Outlook. I was uploading it to different, like encrypted email storage. I was using many different platforms, and the amount of time that the video took to upload usually it would time out and give me an error before it even finished.

But when I finally got it uploaded on Skynet, the upload time comparatively - if I had to estimate - with any other platform I used to upload, even including iCloud, I used iCloud as well - Skynet uploaded at least ten times faster. At least it was a it was a night and day difference. So that's exciting. Yeah, it makes. But think about it; it makes sense, right? Because there's probably nodes that are closer to where you're centrally located.

On the network, so the data doesn't have to travel as fast, and it's dispersed against hundreds or thousands of different nodes, right? So it's broken up into small pieces. So it makes perfect sense because if you're going to upload it to a central location, you're going from wherever you are in the world to wherever they are in the world, and it's it's a longer road to travel, right? It's not because is that what it is, Craig? Is when you're uploading something, is the data actually traveling physical distance?

Well, yeah, it's got to go through your internet connection, your computer, your network, your internet connection. It's you know, it's kind of like the telephone, right? So you have to go from wherever you are in the world, and then get routed through the internet, through whatever provider you're using, and then hop around through the routers of wherever the destination is. So if I'm going to go send something from here,

On the East Coast to the West Coast, let's say you know from North Carolina to California, it's going to take longer because of that all the hops that it has to go through that distance, right? So, with websites, at least with traditional websites, that's where CDN technology or content delivery networks come into play, where the website will load faster.

For the so, say the website is is centrally hosted on the East Coast in New York, and you want it to load really fast for people in France or in Canada or different parts of the world that are far away, like Australia, for example, or China, it's going to load super slow if it's hosted there because look at the distance, right? But if you use what's called a distributed content delivery network.

That takes your website and caches it, takes copies of it, and puts it at strategic places that are close to people. Right, that you shorten the distance of how far the content is from. And that's really what decentralize. That's really what Skynet's doing too. In this context, it's it's bringing the data in this case, flat data or cold data that is.

You know, files like PDFs, Word documents, images, photos, data that's not open or being used, even videos. The point is that people are not sharing it. It's not in a database. It is flat data, a file or files, and it's distributing that across the blockchain. In this case, the decentralized CyA network.

Um, across thousands in small pieces, across thousands and thousands of nodes. So that makes perfect sense that it would be super fast like that compared to centralized options. That's interesting. I would have never in a million years realized that was why. Because I don't think most of us like you're you're a techie through and through. Like you know, like you are, and and some of us are getting into this or you know, kind of trying to.

Wrap our heads around this from whatever perspective we need to to understand it. But like that right there, what you just said, I would have never thought of. But I mean, that's what it is, right? Like this data is actually traveling at whatever speed it's traveling at, and it's it's going who knows where, you know. So that's that's something that we don't think about when we upload things and stuff. We're not we're not even aware of this process.

Yeah. So my point is that it's going to be another huge disruptor in the future, right? So, like, you know, I I wanted to buy something the other day personally. I I go to buy it. It's at a new website I haven't used before, so I order it kind of like an Amazon. I order what what I want.

And I get a phone call from the company saying that I need to verify because I'm a new customer. I need to verify that I'm who I am. And I'm like, okay, well, you know, I've done that before. My my point, though, is that with a blockchain solution like Bitcoin or anything, Ethereum, any kind of cryptocurrency, that step is completely eliminated. So, like, I didn't mind going through that "quote unquote" verification hoop to.

You know, kind of raise my hand and prove who I am. But my point is, it slowed down. I thought about it, and I'm like, man, this really sucks for their business model because if you think about it, they're trying to compete with somebody like Amazon, who's the big gorilla, and they're trying to reduce their fraud for their customers, which I get, which is a good thing, right? But, but my point though is, it it put a huge.

Hurdle and delay for me, so now I have to wait an extra day because they didn't ship my item. Right, right. So now I not I went through the verification. I did what they asked me to do, and I passed the verification and proof. But my point is that I don't think people realize how big of a disruption we're going to go through in the near future.

Because all these banks and these middle middleware or middle technologies that that or or hoops, like they did, they went through this anti fraud hoop because they want to make sure. And I get that, and that's a good thing. But that is completely unnecessary with something like.

A Bitcoin transaction, or there's no you don't have any of that. There's a trustless system, and you just trust the data that's immutable. Yeah, and but but here's the but here's the other thing too. If I want to send you, or if you want to send me a million dollars, if you tried to send me that much money, just think of all the red flags and phone calls and.

Crap! You would have to do to say it's really you to prove your identity. You know what I'm saying? My point is that it would take literally a long time to get that money from you to me or vice versa. Whereas with crypto, it would literally take minutes. And and there's nobody to say, "Oh, wow, you're sending a million dollars. That's a lot of money." You know, there's nobody to criticize the transaction, whether big or small.

And I don't think people really grasp or understand that fully yet, because there's going to be so much of these middle companies that completely get wiped off the face of the earth. Yeah, there. Well, let me give you an example. The other day, for the first time that I can recall, I did I did a transaction. I cashed out some of my crypto, a certain coin.

I had to buy some funeral flowers for a very good friend of mine, and I cashed out crypto, moved it from one exchange to another because that was the one that was linked to my bank. Well, instead of using my bank, because it was a one to three day time to get the money to my bank, and I was like, "Well, crap, that's that's a little longer than I like," because the funeral is soon, you know. So I looked at the options, and I could transfer immediately to my PayPal.

So I transferred the money to my PayPal, and then I Cash App the money, or I sent from my PayPal to Cash App because the person I was sending the money to didn't have PayPal; they had Cash App. So, anyway, what I'm saying is, I did this transaction to accomplish this goal, and I didn't. Look at how, if you were to draw on a piece of paper the journey from your initial transaction or ask of what you wanted to do to the destination.

Look at how crooked that line is. I mean, if you if you had to go through exchanges and different merchants in this case, PayPal or your bank, and then a different app because the the recipient didn't have that's all crap that's going to get eliminated. Yeah, and it's and it's but if you like kind of look at the big picture, it is and it's a crooked line, a roundabout line. But what that line did is, it took me in a different pathway. I didn't go through my bank.

You know, so that's the thing - that crooked pathway that needs to now be aligned and straightened. But that pathway took me around the banking system. Yeah, use it for that transaction. But my point: had the merchant, in this case, the flower shop or wherever you wanted to buy the flowers, had they just accepted the crypto that you had in your in your exchange account or your wallet?

That you would have skipped all that, and it would have been it would be near instantaneous. It would have been minutes, and then it would have been shipped and on its way. So my point, last step for all this, right, is the adoption, the retail adoption, because the technology is there. Well, there's the business. Well, there's the merchant or the business side, right? There's the you know, like I got a call the other day from a client or a past client.

And they're like, you know, what if I want to take crypto for my my products and services? And I'm like, okay, well, all you have to do is is this. And and companies like Coinbase have an e-commerce side, so you can sign up for their e-commerce and you can stick it on your website and immediately take crypto, like in real time. You know, anything that.

Is accepted on the Coinbase exchange. You can take crypto for, so that's huge if you think about it. Yeah, it is. Yeah, it really is. So, anyway, Coinbase announced that they're doing - they're letting people cash their paychecks now in Coinbase ATMs. I guess that are positioned across the nation where they can - they can people can.

Deposit their paycheck, and they can either cash it or they can just convert it right to crypto. My, yeah, well, and and that is huge too. But my point is, I don't think that a lot of businesses really understand how much of an impact this is all going to be, and how much of a disruptor it's going to be. Because there's going to be more and more people.

They're going to hold. That are going to hold various types of crypto. So there'll always be a need for an exchange to take that and flip it, or something like a pancake swap, or some type of flipping from whatever you have to whatever the recipient wants. There's always going to be a need for that. There's not going to be a need any longer for all these different middle technologies or verification steps.

It's all going to go away, and it's all going to get more streamlined. And there's not going to be a central authority in this case, a bank that will will criticize. Like like right now in the banking industry, you know, typically, like if I like I was telling Aaron this, you know, we were trying to with SweetDash our CRM system, we were trying to add capability for ACH so that we could take from our clients.

Payments through checks, electronic checks, right? Well, so much rigmarole just to set it up. So, long story short, because SweetDash doesn't integrate with everything, we had to sign up with whatever they supported. In this case, it was Stripe. So, Stripe is a popular option for merchants to take credit cards and electronic check payments from their customers for for their goods and services that they sell.

Well, I'm bringing this up, BJ, because they any kind of merchant is going to put a limit on you, and they're going to limit you because they're a bank, right? So they don't know me, they don't know who who I am or or our track record. They're going to initially start us out at a you know a number. Whether that it's kind of like getting your first credit card, right? You know, you get you know you maybe get a $500 or $1,000 limit, then you use it, you show good payment behavior. Yeah, it's a trust system instead of a that's right.

That's exactly right. So my point is that the small amount that they gave us really makes it difficult to do business that way. It it really does because the volume, you know, you can't go through that channel. So anyway, my point is that all these delays and the scrutiny and the the the human element of.

Oh, that that hits the threshold. That's out of the threshold. All that stuff goes away. And as you know, I don't. I'm sure you've read about Cuba and what was it, El Salvador, and other countries now making Bitcoin and and cryptocurrency official tender, right?

So that's causing more adoption and more buying, and will only cause pressure for price to continue to increase. And you know, in regards to well, there was a. Did you see the article yesterday that featured Edward Snowden talking about? He was saying that something about Bitcoin has ten xed, regardless of a global government effort to to suppress the prices.

Oh yeah, yeah. Because, but that's my. Well, it's a major shift, right? I mean, this is a major paradigm shift because it changes the way the economy works. It changes the authority of the economy, the economic system, which you would have to argue is an economy is kind of the heart of an empire.

Yeah, but my point is that that's what I've been saying all along. Like what he said is is is effectively showing supporting evidence that look, you can't stop this thing. You may hate it, you may not like it, but there's no central person or location to shut down. Right. There's that's the truth, right? Like, I mean, even if it's regulated, like there's so many peer-to-peer ways to do this outside of exchanges.

And payment processors that, like, just the wallets that people hold now, you know. Yep. I mean, how do you shut that down? So, what is what is the downside to all of this? I feel like responsibility. There's a trade-off. So, when you try to get closer to self-governance, you also assume more responsibility. If you make a mistake in your transactions, there's no FDIC to call.

And say, "Hey, refund my money," you know, or "Hey, someone stole from my wallet. It was fraud." Like, who are you going to call, Ghostbusters? You know what I mean? There's no one to call for help, so you have to take your financial matters into your own hands and exercise good cybersecurity practices, you know, and enable the right software to help protect your your cyber environment or whatever you're, you know, connected to.

And make smart decisions about how you navigate through the web, because there is a degree of responsibility now that wasn't there before. Like, there's just no crutch. There's no there's no one there to pick up the pieces if you have a problem. I mean, to be honest with you guys, as somebody that's not as experienced with this as you are, it feels very like wild, wild west.

Well, I think it is right now, right? Wouldn't you? Yeah, yeah. So this is the thing. Like right now, it's very wild west. Like it's almost like this is the way I picture it. Like like looking like as if it was a cartoon that someone animated. Like two years ago, I mean, even though Bitcoin blockchain was announced in two thousand eight on Halloween, you know, it still didn't really get much attention until recently. You know, a couple years ago, it kind of where people started noticing.

Well, when you get involved in it at this point, you are literally at the cusp of change. Like this is the cutting edge of change, and who is going to put a pretty bow on the whole thing for us? You know, if this is change happening real time, who's going to put a bow on it? Well, that bow doesn't come until after the change has occurred. You know, and there's someone there to put the bow on.

But during the process of that change, yeah, it's wild west, and it's a bunch of trial and error, and it's a bunch of you know trying different technologies and seeing which one works the best. And and as we're starting to see with the different coins and the different blockchains, they all have different use cases. Like crypto is not just crypto. You have crypto, you have store of value, which is like Bitcoin, and then you have DeFi, decentralized finance, which is ways to do make financial transactions like lending and interest and these things on blockchain.

It's using coins, so that's DeFi, and then you have altcoins, which are typically altcoins are my favorite because altcoins really celebrate emerging technologies. You know, like altcoins are kind of like the face that's representative of the value of an emerging technology on a blockchain.

And that's where a lot of my attention goes. But so these these are all different aspects of cryptocurrency, and some of these, you know, if you're paying attention to the technology behind them, some of them are such clear winners. You know, like we we follow very closely the Sia blockchain with the Skynet toolkit and protocol, and and Skynet's building its own blockchain right now. So that's an exciting pro.

Project to watch simply because of the superiority of the technology, and I would say also the team behind it. Well, some of the coins are not so much. Like Craig was talking about the Shiba Inu coin. This, in my opinion, is falls into a whole other category of of coin, which isn't an official category, but it's kind of like a coin that's just it's just if you're paying attention to how these markets work.

And if you're kind of aware of the way that math works, and and the and that the stock markets work because they flow to a certain mathematical rhythm, basically, you know, these coins like Shiba, you know, although they might not have much of a purpose, they do present opportunities, you know, and so some of these coins are opportunistic, kind of, and then they may not have the longevity.

But they definitely appear to be some sort of a springboard. Like I'm watching the screen right now, and this Shiba Inu coin, which, like Craig said, doesn't really have much of a practical use case, it's it's it's a 40% increase in 24 hours. So you know that's the thing. Like some of these coins are just merely almost seem like just windows of opportunity.

Well, and it goes back to pure supply and demand, right? You know, it goes back to there's no, no, like in this case, there's really no utility value of owning this coin. It's really just supply and demand. And there's, I think there's so many quadrillion. It's like a ridiculous supply. So if you just imagine what, since there's so much supply of it.

What? How much people are buying of it to cause that drastic percentage change? It's it's pretty mind boggling. Well, you can see, like how you said in the beginning of this call, Craig, that the world will decide. I forget what how you finished it, but the world does decide. Like you can look and see the direct correlation, right? Like if you go on Twitter right now, Shiba Inu is trending in technology on Twitter. It's also the highest performing coin on my screen right now.

You know, and so you can see there that like it's like the collective is moving certain things. Well, that's you know that's kind of it. It's the collective, right? And that kind of segues into perfectly the non fungible tokens or the NFTs. You know, I was telling you, BJ. You know, I sent you some links about how Snoop Dogg, the rapper, has really.

Gotten into NFTs or non-fungible tokens and collectibles, and he just spent almost four million dollars on some graphical artwork, and it's just mind-boggling to me. You know, part of it makes sense because, like, if you had a a real Picasso drawing or painting.

You know, there's only so many of them, right? It's supply and demand again. But how do you prove that it's real? How do you prove the authenticity? So right now, you would have to go back to what Aaron said: it's the Wild West right now. So this NFTs, like you said, part of it makes sense. The part of it that makes sense is the fundamental concept.

Which is attaching some a degree of identifiable identifiability to a coin, you know, where it's not you can't it can't be duplicated by another coin because it's attached to something non fungible. Well, that's the part that makes sense. The part that doesn't make sense is everything else that's going on, like Snoop Dogg buying four million of, you know, just a whatever digital something. Now that part is related to that part of the human.

Psyche that jumps on fads, and you know, I mean, when you release something that's new and shiny and bright, what happens? The masses go running to it. You know, it's like a honeypot, and eventually that dies down, right? So it's a fad right now, and everyone's trying to. It's like almost the greed takes over. Like, hurry, let's go get it before they're out. They're almost gone. You know, type mentality.

And then everyone's gonna step back and realize how silly this all was. And then the real purpose of NFTs, you know, which is to really, you know, designate something like a piece of property or you know a boat or you know even a birth certificate could be attached to an NFT. You know what I mean? Like those types of things. Like that's the real value in it. Not to mention, like then you can start to think like potential.

You know, as blockchains get faster and faster, and they work, you know, better and better. I mean, then you have, you know, then you have all kinds of possibilities that open up with NFTs. Right now, is that that unfortunate side effect of the wild west, which is where some of the the herd mentality kind of unfortunately rears its head. Yeah, well, yeah, there's some truth to that. But like what you just said before, though, that some of that, I think you were saying, like if you bought something, that proof.

Some of that is already just traditional blockchain technology. Where the NFT stuff comes into play is more for, from the artist perspective, it's more for things that you would normally copyright. That you know, like to show, like if I am a painter and I want to be posting my artwork out there.

It's a way to prove authenticity and reduce theft, right? Like, so in the digital world, if I draw something or I take a photo of something and I put it on the internet, people can copy and copy and copy that thing, right? So, with an NFT, you prove that you're the owner of it, and you can. That's that's a huge game changer, right? So, I think that that is also why there's the catalyst of.

The FOMO, right, the fear of missing out, and the the rush or wild west towards the NFT in different ways. But my point is that I think NFTs are going to be here to stay, and you're going to see more of the art in in in paintings, in audio, in video, like movies, things like that.

You know, like like I'll give you an example. Like if Lucas films, you know, Star Wars, right? If they created an NFT of the the first Star Wars movie, you know, you know, all the Star Wars maniacs are going to be buying that NFT token, driving the the bid price through the roof, right? Because you you would be able to say that you are the

The only owner of that thing, right now. If if Lucasfilm said, you know, it's kind of like I think the future. You know, when I grew up, it was about baseball cards and collecting different things, right? But but now you you and there was physical cards that you would trade, but but now this is kind of like the digital version of that. So like if I have.

An NFT of a baseball card or a specific thing like a Pokemon or whatever it is, and I'm the sole holder of it. I can then trade that token, trade that thing digitally with you or whoever else that wants to buy it, and that's why the thing will continue to become rare.

And continue to rise in value, but it it also goes back to like the eBay concept, right? Like, what will people pay for some stuff? Like, I mean, you've seen, you've heard about all the crazy eBay stories about how people will post something. Oh, this is the the cup of coffee that X Y Z star drank out of. You know, here's here's the styrofoam cup, and it sells for five million dollars. You know, I mean, stupid things like that that people will buy.

My point is that this is the NFT market, or the world is is the digital version of all that. Yes, and you know that is so true. And and then we have to keep an open mind that some of this we may not have come to a full understanding yet of what the potential is and the use case is. Because a good example that is Bitcoin itself, like when this was released back in two thousand eight.

No one knew at that time. You know, we we knew what what Bitcoin and blockchain was was being, you know, what what they what it was said to be. But at that time, in two thousand eight, no one knew that today, two twenty twenty one, we'd be having a conversation about the hype of blockchain and Cyne and all of the cool things that's happening there with the technology. Like we didn't know that that was going to be an outcome of the Bitcoin and the blockchain thing in two thousand eight.

And I think that the NFT is another example of that. Like right now, we know what it's capable of, but I don't think we know what the eventual potential is with this. Like you know, you hear people talking about this transhumanism movement and stuff. Well, if blockchain keeps a distributed ledger of

This, you know, information. Well, you know, then that that just the NFTs and transhumanism and blockchain being very fast speeds at you know delivering information. Then it then you start to open up a whole another realm of possibility, and and yeah, maybe consumerism and and owning things, right? Like, where our society is so addicted to owning things. But I think that here's the thing that I think a lot of people miss.

Right now, in the current world of like art and things like that, like let's say you have a a rare baseball card, you would have to bring it to somebody, and it would be that that collector or that person's opinion of what that thing is worth, right? So they'll say, yeah, well, BJ, okay, you can get probably three or four thousand dollars for this card. That all goes away.

With NFTs, it's the world that then determines the value, because it's all in a blockchain. Does that make sense? Might have lost people. Yeah, I mean, sorry, my my meeting is making noise. I'm not mute, but yeah, it it does. It definitely um it definitely does.

It also makes sense from a like some of these NFTs that are that are storing, you know, like say deeds, property deeds, and things like that. Like, if say there was a catastrophe on, I say, Web two O, for anyone that doesn't know what that means, just anything that's not you know moving to Web three O. So, if there was a catastrophe on Web two O and records were lost.

You know, NFTs could could be there to you know prove certain things as well. Yeah, but I think we're just we're barely at the beginning of NFTs. So right now we're in that silly phase, you know, where where like what you know you hear about four million dollar NFTs for for whatever it was. We're in that silly phase, and I mean I don't think it it's very sustainable. You know that silly part of it.

Yeah. So I know I came on a little bit late. Did you guys go over what NFTs were before I joined? I don't know what those are. We we did briefly. So an NFT is a non fungible token. It's a way to prove the the ownership of a specific.

Thing, so like, like when we talked about Snoop Dogg and how he purchased an NFT of artwork that was a a graphical image, a computer image from an artist. He bought that that token that proves that he is the sole owner of that piece of artwork that he bought.

That's what an NFT is. Does that make sense? So it's it's the yes. It's stored on the blockchain. It doesn't even have to be an item. Basically, an NFT just somehow makes that coin not not duplicatable or like you can't you can't interchange it with another coin. Like if I have one one Sia coin and one, or if I have two Sia coins and one of them is an NFT.

That cannot be the other side. Coin cannot then take the place of this one. That's an NFT. It just makes it non. You, it's like immutable. The coin then is attached to something, whatever it is. It could be anything, really. But then it makes that coin unique, and that's where it's non fungible because it just can't be interchanged with something that doesn't have that same uniqueness attached to it. So, when you are saying.

Craig, that the NFT will basically work as the what is it? The person that puts the price on things? Appraiser. Appraiser. Thank you. Well, the NFT doesn't. The NFT reduces the need for an appraiser. So basically, what an NFT does is it's a non-fungible token.

A way to store, whether it's let's say, Aaron, you you find a Picasso or or some type of artist, and it's a painting. It could it doesn't have to be a painting. It could be audio snippet. It could be your voice recorded saying something or singing something. It could be a video. It could be a video of your of of your brother's kids.

Whatever the point is, you can take that event. If it's video or audio or artwork, or you can draw on a napkin. You know, like it could be the the first napkin sketch of how Facebook was was broken out on a on a you know two napkins right at a bar somewhere. My point is, you could take a picture of that. The the we'll use the napkin example. You could take a picture of the napkin.

And that picture can then be converted into an NFT and be stored on a blockchain like Ethereum as a token, and then you are the only owner of that thing, and it's original and it's tied to you. So basically, it's like an authenticator. Yeah, it uses the blockchain, which proves which proves ownership. Right, the blockchain is a distributed ledger that tracks any kind of a.

Appends or changes or or things, right? It tracks the navigation of things stored on the ledger. So, in this context, the NFT or non fungible token is a way to prove that if you bought a collectible, or you you bought, like I said, the rights to an image, a file, whatever it is.

It proves that you are that owner, so you don't need an appraiser. Nobody else, none of those appraisers are needed anymore. You now have that token, and the value of that thing is purely supply and demand. If there's a world of somebody else that might want it, gotcha. That makes sense. Okay.

So, like collectors of it, it could be anything. It could be, you know, World War collectibles, right? You've got this, this whatever it is, you know, this gun that was used or in this battle or whatever, you know, whatever. Like I said, it could be proof of ownership on a traditional blockchain, or it can be an NFT in the digital world.

And I mean, it doesn't have to be ownership, too. It's just something. It's just a uniqueness, Erin. It's just something that's non-fungible. So it just makes that coin different from all the other coins on that blockchain. You can put an L stamp on it, but the author, like, like, it's not even a like. You know how like Pokemon cards are popular with kids. You know they like the different characters and stuff like that. Well.

In this case, Pokemon is the author, right? So Pokemon could say, "We're going to release only one of this special drawing or character card, or or whatever, right? A collectible card." Well, they can make that into an NFT that you, somebody in the world, can then buy, and then they're they're the only holder of that coin.

So, if you think about it, and Pokemon is around 30 years from now or whatever, that thing is super rare, and Pokemon fanatics will pay exponential prices for that thing, right? Because you're the the one person in the world that has it, and you can prove it. That's pretty cool. Yeah, it's just something uniquely identifiable that makes it non transferable with other coins.

I mean, it could be it could be a human DNA sequence, you know that that would make an NFT. I mean, it it counts, you know. Anything that's anything that's non, you know that that then it is different from all the other coins, and no other coin can can pretend to be that coin. You know what I'm saying?

That's what it is. It's non fungible, and I wish they would have used better terminology. Because non fungible, like that's not even a term we use, right? But whatever. Now it is. Yeah. Just like just like crypto wasn't something used, but now they make up everything. Yeah, I mean, it's you know we're, but the thing is, is like I'm grateful myself personally to be alive in during this time because I mean, you know, this is this is just like it's all everything is just changing.

And we're learning, like art. Like I don't, I don't know about you guys. When I grew up as a child, like I just had this belief system and mindset that the world was set in stone, you know, and that nothing was really changeable, especially not the big things, you know, like economy and all these things. Like those things are definitely not changeable. You know, those things are just immutable, set in stone.

Well, we're all learning otherwise now, you know, firsthand, live, watching it happen. Well, and even honestly, like I've I found it just reminded me. Like I've I've become really obsessed, basically, with like watching Cosmos and things like that, and Pangaea. I remember the first time I learned about Pangaea, and you're like.

Wow, the Earth looked different. That's absolutely crazy. Because you, it's true. When you're young, you think that like everything is the way it is, and that's how it's going to be. That's how it's always been. But then you learn that no, that's not the truth. And at some point in the future, things are going to change. Everything will change. We didn't know when we were growing up because the world was looked pretty and it was cool, and we were exploring and having fun. But we didn't realize because our viewpoint.

Was what it was. We didn't realize that we lived in a very disjointed world, you know. And now that we're watching things like blockchain, which is unifying in itself, you know, because of just what it is technologically speaking, and then the communities that surround the blockchain. But we're watching, and then you know, watching the Internet of Things. And you know, I don't know if you've seen like on your devices, but it's very common now when you pull up a new app or a website.

Like if I'm inside of one app and then I go click on another app or something, I'll get a pop-up, and this happens all the time now. I get a pop-up saying this app would like permission to access this app, or you know, I mean, like they're it's all connecting, and so as these connections are being formed with the Internet of Things.

And you have the blockchain. That's you know a very connected technology. And then you know, and you have nature itself. Like Erin, you were talking about a special that you watched. Like you like those Cosmos shows about like trees and network inside of the earth. Mycium, yeah, yeah. Basically, being it's like a natural IoT. Like you know, like how the earth works and how the trees and the roots work and all the plants and everything. It's like a natural IoT. So if you picture the Internet of Things.

As a mirror of that, basically, you know, all this disjointedness, the separation that exists right now. I mean, if those gaps are filled, then then you know, who knows what the potential is? Because none of us experience that in this lifetime. But you know, it's that definitely the connections are being formed in some of these, you know, in some of these new technologies. They're they're forming connections that we didn't know weren't were missing. We didn't even know they were missing.

Yeah. Yeah. Well, well said. The last thing I'm just going to say on the NFTs, just to drill that home, make sure everybody understands what it is. So, basically, think about it as anything that's digital, like a photo, video, audio. Like I was saying before, remember, without this technology, those things anyone can copy them. Like I can send you an email and attach a photo; you can copy that thing a hundred times.

There's no way to stop that, right? There's, there's the the NFT makes that stuff that digital data. It makes it like a physical item, and that's why it becomes so rare. Okay, so almost, but and also almost like a fingerprint, like a fingerprint, yeah, like a way to identify that point in time. So, like like I said, it could be a photo.

It could be video, could be audio, whatever. It proves a snapshot of that day and time. That you were asking about metadata earlier. So typically, when you take a photo, like with your iPhone or your Droid, and you take a picture of something, the metadata is the GPS coordinates of where that picture was taken, and what type of camera.

It was taken from. So, like, if you take a picture with an iPhone, by default, it's going to show in the metadata of that picture. It's going to show the date and time, the camera or the phone, and the specs of the the camera, like the aperture, the the size of the you know how many megapixels, what is the resolution of that picture. It's going to show the GPS coordinates and where it where it was taken in the world. All that stuff is.

Attached to your photo, so when when people go and snap pictures and then they upload them on to Facebook, for example, they don't realize that all that other data is going along with it. So if you're taking pictures at your house, well, guess what? You just shared your address and your GPS coordinates of exactly where you took those pictures when you put them on social media or email them out. So going back to the NFT thing.

It's a fingerprint or a uniqueness that's tied to a token, which proves the ownership of it. So anybody in the world can create one, and you can put it out there and attach it to a blockchain like Ethereum, and you can store these NFTs on your ledger, your digital ledger. And there's no, yeah, and so basically, also.

Kind of my understanding from what you're saying, there's, there's not really any way to change it without leaving a a trace, right? Yeah. So basically, so so if you don't have, like, let's say, I sell you my NFT of our company logo or whatever, like I've I took I I snapshoted it in time.

And created an NFT token and sold it, right? And let's say I sold it for a thousand dollars. Well, anyone in the world can go fraudulently get that picture, but they can't prove the authenticity of it. So it goes away; it has no value. Whereas the one that that you bought or the NFT tied to it - that's why it has value because you have proof of ownership on a public.

Immutable blockchain. Okay, that makes sense. I'm trying to, like, as I'm learning about it, like, listening to you guys, I'm trying to think of sort of the pros and the cons with it, and figure out, like, I don't know, like, how could somebody con somebody with it, or?

Do you know what I mean? Like, what are the? Well, there's not very many cons. It's more pros than cons, so to speak, if you use that context. Because it's also about which blockchain you're choosing, because they are not all the same. Yeah. Well, I mean, think about it this way: like, if your kid draws a picture of for you, right, and you want to save that picture, and you want to.

You know, submit it to - I don't know, whatever. If you're, you know, for personal reasons or for whatever, you like that picture. You know, you can create a token around it, and somebody else in the world might also like that picture too. And that's how the value might rise because other people might want it, they might demand it. But everything else in the world that's not tied to the authenticity doesn't have as much or any value.

If you look at it from that perspective, so I can see a world in the future where there are NFTs tied to things we buy. Like if we buy a video on Amazon, you know, there might be an NFT tied to that that proves that we bought that video. You know, there might be sound or music in the future that have NFTs tied to them.

From the artist, you know, like, I could see a future of of having that proof of ownership. So then, the artist or the creator or the or the author can then dictate how many items are available, right? They can control the supply. Uh huh.

So, just different different ways to think about it. The last thing going to be layers to it, and lots of different possibilities and options. You know, one case use for NFTs. There could be a thousand. You know, there could be ten thousand. And just like with the cryptos and the blockchains, you know, the winners will emerge eventually. We're very brand new in the NFT space. That we talked about. We talked about SkyNet creating its own blockchain, not breaking off from the Sky blockchains. It's still the underlying storage foundation, but creating its own.

And the the reason that they claim they did that was mainly to be able to support NFTs. So it is very important in in the industry, and it more than likely is the next stage of progression with this whole space. But the the case uses for it, I'm sure, will continue to to unravel, you know, and unfold as as as we move forward with the whole.

The whole thing, because yeah, Craig, we've been watching it for a few years, and you can see that today our understanding of this stuff, as we perceive it, is very different than a few years ago because of how things are unfolding in the space. Like now, we're seeing, like, okay, it's very clear that you know these coins, the DeFi coins, are this, and the alt coins are this, and these alt coins, these are where the technologies are, and NFTs, and you know the the speeds of the blockchains, and all the.

All this different stuff, you know. Yeah, the last thing I just want to talk about, and then we'll we'll be done for the day. Is I just want to talk about the Coinbase hack and how a lot of people that were using Coinbase were getting their accounts drained, and it was because, you know, we talk about cybersecurity. Obviously, that those folks were not.

Using the utmost in cybersecurity, so they had most likely malware on their systems that were snooping their emails, and they were probably using passwords that were breached or reusing passwords on multiple websites. So hackers were basically exploiting those flaws, and then they took it a step further and and found a hole or a gap in Coinbase's multi-factor authentication or MFA.

Through text, they found a gap there. And long story short, the the the folks that suffered through this are Coinbase is actually reimbursing, which is good to hear. But it it goes back to good cybersecurity hygiene, and you you have to be doing the stuff that we've been preaching for such a long time, which is unique passwords, long, complex.

Use technologies like Gatekeeper or token-based authentication. Use keystroke encryption. You know, sign up for our training if you haven't signed up for our training. But you you've got to do these things and continuously educate yourself on how to not get hacked. Because if you don't keep trying to stay a step ahead, then

Sadly, you can fall victim too. Good point to end on. This stuff doesn't mean that cybersecurity goes away. You know, no, it might just be quite the opposite. You know, this is this is like an integration of you know people, process, and technology. The whole block, the whole blockchain space is is a step forward in the integration of those.

Those three fundamentals, and it requires certain changes. Like the benefits are are pretty clear, but it does require some adaptation from us. And we're going to have to take some of these things into our own hands and hold ourselves more accountable to doing the right things to protect ourselves. So, like for example, our staff.

You know, we're all looking into home-based, you know, intuitive software like cybersecurity AI-driven software in our homes. You know, to help keep us protected because this, this, this does require an enhanced degree of personal responsibility in securing your own environment. You know, as we, as we, you know, move forward in this, in this forward progress.

Absolutely, humans have always been as as good as their tools, right? So, yeah. Well, it's also not just the tools, but it's the testing and the assessing of the situation, and and look, you know, trying to look through the lens of a hacker and try to figure out the people part of it, right? That's right. Yeah, process and technology. One doesn't replace the other. It's just the the alignment of the viewpoint changes as as things change. You know.

So now, technology is becoming more the central part, but that doesn't eliminate people in the process. Like we have to make a lot of these decisions, you know. Exactly. Well, thank you guys. I appreciate it. Yeah, absolutely. Okay. Have a good rest of your day. Take care. Bye. Bye. Bye.

Thanks for listening to yet another episode of Cybersecurity and Compliance with Craig Petronella. Listen to all of our podcasts on Apple, Google, and Spotify. Visit us online at petronellatech.com to book a meeting with Craig about your business. That's a wrap on this episode of Encrypted Ambition. Subscribe wherever you listen, and if today's guest inspired you,

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