What is Wrapped Bitcoin?

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

Today, let’s take a look at a really interesting crossover of the two most popular blockchains: Wrapped Bitcoin.

Also found under its ticker WBTC, this token isn’t really it’s own currency, but in fact Bitcoin, but traded on Ethereum.

Sounds confusing? We are here to help. Each wrapped Bitcoin represents the value of one actual Bitcoin, but is tradeable on the Ethereum blockchain. You see, while Bitcoin is really just a currency, Ethereum is like a bank and you can transact any financial instrument there, thanks for its smart contracts.

But why would you want to do that in the first place? To get the best of both worlds. Bitcoin is the largest crypto currency by far, and people want to hold it as a store of value, similar to gold. But Bitcoin’s blockchain technology is very outdated at this point: It’s slow, and very expensive to operate. And we haven’t even talked about the climate impact yet!

That’s why the investors of Wrapped Bitcoin thought: What if we can trade Bitcoin on Ethereum, allowing us to own Bitcoin without dealing with its old technology. And it seems like that was a good idea - about 1.5% of Bitcoin are wrapped, a current total of $13bn dollars.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

What makes Binance USD (BUSD) special?

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

Today, let’s take a look at yet another stablecoin, Binance USD.

Binance USD is the third largest stablecoin on the market with almost $20 billion US dollar exchanged for it. The price of Binance USD is linked to the US Dollar, making it yet another potential candidate to use for everyday payments as that gets rid of price volatility of traditional crypto.

Fans of this podcast will know that we’ve spent a few episodes on stable coins already - how they work, and analyzing just how stable they really are – or are not. So what makes Binance USD special next to the others we have talked about, like USDC and Tether?

Binance USD is actually very similar to USDC, as it is fully audited and regulated by a government. In this case, the New York State Department of Financial Services has given its seal of approval.

And also just like USDC, Binance USD is 100% backed by real dollars: When you buy one BUSD, the company puts aside that one US Dollar you purchased it with, meaning you can always exchange USDC back fully. Remember! That isn’t always the case for stablecoins, Tether for example is notoriously intransparent about its backing.

One notable difference that BUSD has going for itself is that it can operate on the Binance smart chain, which is cheap and fast. USDC in contrast, when used over the Ethereum blockchain, suffers from high transaction costs that reach $20-30 dollars easily.

And that is it on Binance USD! We hope you enjoyed this episode. Learn more and come see us for a first glimpse into cryptohunt at beta.cryptohunt.it.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

What makes Near (NEAR) special?

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

Today, let’s talk about NEAR.

The Near protocol is a blockchain that allows developers to build products and services on top of it, similar to how they might use Amazon's or Google's servers to create a website.

Near brands itself as a community as well as a platform, bringing together community members who maintain the network and developers who use it to build. It's a little bit like a community garden - there is something to do for everyone.

But besides the technical advantages of high speed and lower transaction costs than it's biggest competitor Ethereum, Near also wants to solve other problems a real-world user might not want to deal with.

First, it gets rid of those cryptic wallet addresses nobody can remember and replaces them with something much more useful. Those Near addresses look very similar to websites addresses, for example jonsmith.near. That makes them easy to remember and share. You might remember: Celo is another blockchain with the same idea, but they use phone numbers or emails instead.

Second, Near makes a deliberate effort to be a green blockchain and it is carbon neutral certified. Their approach is two-fold: They constantly look at their software to eliminate any wasteful code, and they offset carbon emissions by donating to the planting of trees.

And that is Near, another example of a blockchain that is trying to solve not only technical challenges, but also the human side of being able to use it, and use it responsibly.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

What makes HEX special?

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

Today, let’s take a closer look at HEX, a crypto token that is specially designed to perform lending and borrowing.

The makers of HEX took a look at the traditional financial markets and realized that there is a very popular form of borrowing and lending, called a certificate of deposit. In short also called CD, its idea is really simple: A bank would pay you a higher interest rate on cash that you deposit for a fixed amount of time. That’s because it helps the banks plan ahead better, something worth a premium to them. They take the money out of your account, and you get the CD. It simply says: The bank now owes me money and I’ll get it back at a set point.

HEX does all of that, but without banks in the middle. You can put money into Hex by buying it, and when you lock it up for a period of time, it starts paying additional Hex in interest.

Interestingly, that is the only use case it has: To buy and hold, like digital gold. That is why many critics say Hex is essentially a big ponzi scheme - it can only continue to grow in value if more people buy in. Proponents, on the other hand, liken it more to Bitcoin as an investment vehicle, but with built in interest.

And that’s it on Hex – what do you think? 30 billion dollars invested well, or just a big ponzi scheme?

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

The craziest crypto scams and hacks: Part 5: How Ethereum almost died because of a hack

Welcome to the cryptohunt jam where we spend one minute a day on crypto and its history. In plain english.

Today's episode is about another kind of hack, one that targeted weaknesses in blockchain technology to steal a lot of Ethereum.

It started with an ambitious idea in 2016. A group of coders from Germany came up with the idea of the DAO, a decentralized organization that would act like a venture capital firm, but without employees. Instead, anyone who sent Ethereum to the DAO would in turn get partial ownership of it, and voting rights to determine which investments were to be made.

And it exploded. Over just a month, the DAO raised $150 million dollars from over 11,000 investors. The creators were proud, especially because most money came from a bunch of smaller investors, truly democratizing venture capital.

The DAO’s operation was controlled by computer code, meaning the rules are set in stone and in theory nobody could mess with that. Unfortunately, the code had bugs though, and hackers were able to siphon off $40m of the funds.

The entire young Ethereum community was fighting over what to do. In the end, two sides existed: One which wanted to just move on, and the other, which wanted to roll back the history of the blockchain, restart from before the incident, and operate in that alternative reality.

The fight was so strong that Ethereum almost fell apart. In the end, two Ethereums came out of it: The one we know today altered the blockchain’s history. The other, called Ethereum Classic, kept history as it was and moved on.

And there you have it – many hacks can come from within. Blockchains are just computer programs, and they can have problems too.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

The craziest crypto scams and hacks: Part 4: How Bitconnect’s ponzi scheme turned out to be a $4.5 billion dollar scam

Welcome to the cryptohunt jam where we spend one minute a day on crypto and its history. In plain english.

Today's episode is another cautionary tale: When things sound too good to be true, and scammers hope you don’t fully understand how a system works, bad things will happen.

Bitconnect itself was a cryptocurrency released in 2016. Remember, this was when crypto had its first bull run, and everyone wanted to get in on it.

That context is important to understand Bitconnect. You could buy it for Bitcoin and were promised a daily interest of around 1% from a secret algorithmic trading bot, 50x more than the stock market.

On Bitconnects exchange, you could then swap between Bitcoin and Bitconnect. But the bot wasn’t actually doing anything, it was made up. And that meant that the system only worked as long as more people bought into it than cashed out. It’s called a Ponzi Scheme - that means those buying in pay for those exiting the system. When government agencies took note in 2018, Bitconnect shut down and the token plummeted in value by over 90% in a single day. Investors lost over $4bn dollars.

This story is a great reminder, because crypto is not easy to understand. People want to invest, because they see others make money, but ignore that they don’t know why. Especially crypto, which is complicated with few resources that make it easier to understand, is susceptible to those frauds.

But we hope that this podcast is changing that for you, and bit by bit, you learn the building blocks to make up your own mind. Check out cryptohunt.it as well, where you can read reviews on every project soon.

And next time: How Ethereum almost died because of a hack.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

The craziest crypto scams and hacks: Part 3: Drug dealers, black markets, Secret Service Agents, and a ton of stolen Bitcoin

Today's episode is wild: Get ready for a story about drug dealers, black markets, Secret Service Agents, and a ton of stolen Bitcoin.

It all started with Silk Road, the infamous online drug marketplace operating in the dark shadows of the internet. Operated by Texas native Ross Ulbricht between 2013 and 2015, Silk Road connected drug dealers with over 100,000 buyers.

The kicker? Payments were in Bitcoin, a fact that still gives the crypto currency a bad reputation to this day.

A joint task force eventually found and arrested Ulbricht. And over years of meticulous detective work, they got their hands on over $1 billion worth of Bitcoin connected to Silk Road.

But soon after Ulbricht’s arrest, another suspicion cropped up: It seemed as if some of the sized funds were suddenly missing. And in fact, 1500 Bitcoin, today worth over $60 million, were removed from some wallets. How did this happen with Ulbricht in prison?

Turns out: The government had a bad apple within their own ranks: Secret Service Special Agent Shaun Bridges had transferred the crypto to his own wallets, presumably thinking that nobody would notice the comparatively small amount.

Bridges got sentenced to jail time after trying to flee the country. But it doesn't stop there. Prosecutors uncovered that he actually tried to steal even more Bitcoin after his first sentencing.

What Bridges probably didn't think about: It's hard to hide your tracks, if all the evidence is on the public blockchain. But the damage is long done: The argument that crypto is only for criminals can be heard everywhere. We'll let you be the judge on that one. ;)

And tomorrow: How a fake public offering turned into a $4 billion scam.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

The craziest crypto scams and hacks: Part 2: How investors put $4bn into OneCoin, a coin that didn’t even exist

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

This week we will take a look at the fascinating stories behind some of the largest crypto hacks and scams.

Today, let's investigate OneCoin – a coin that never even existed. Nonetheless, investors lost over $4bn dollars in the scheme.

OneCoin was founded by Dr. Ruja Ignatova, who is still running from the authorities, and Sebastian Greenwood, who's now in jail in the United States.

The promise was simple: OneCoin was a new, revolutionary crypto currency that could initially only be minted by insiders, potentially making them very rich. To become an insider though, you'd have to become an affiliate and the more new affiliates you bring in yourself, the more extra tokens you can mint.

The company armed its affiliates with marketing material and even created an internal exchange where tokens could be swapped for cash with other members. In order to use the exchange though, you'd have to buy a higher level of membership.

Smells like fraud to you? Not to many others, as the scheme was going on for years. In the end, and in hindsight obviously, there was no cryptocurrency and the two founders ran away with all the money.

The sad thing is: Where there is money, there are scams. And the promise of getting rich quickly blinds a lot of people's common sense. Keep your eyes open and always ask yourself: Why does someone want my money before I see anything in return for it? If it's too good to be true, it probably is.

And tomorrow: The case of a Secret Service Special Agent, who stole millions from an online drug marketplace.

The craziest crypto scams and hacks: Part 1: How Mt. Gox lost $50bn in a Bitcoin hack

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

This week we will take a look at the fascinating stories behind some of the largest crypto hacks and scams.

Today, let's talk about one of the craziest of them all: How Bitcoin exchange Mt. Gox lost almost 7% of all Bitcoins, which would be over $54 billion US dollars today.

It all started harmlessly. In 2006, Jed McCaleb, who later become the cofounder of both Ripple and Stellar, created a website to exchange online fantasy game cards. He called it Mt. Gox. The project never went anywhere, but after getting interested in Bitcoin in 2010, he repurposed the domain and created one of the first crypto exchanges, allowing users to buy and sell Bitcoin online.

McCaleb soon sold the site, citing a lack of time to make it better. The new owner, a french developer by the name of Mark Karpelès, saw the potential and quickly turned it into the largest Bitcoin exchange in the world. At one point, a whopping 70% of all Bitcoins changed hands through Mt. Gox.

And that's where the troubles started. One security breach after the next eventually forced Mt. Gox out of business in 2014, and the system was so vulnerable, that the company lost 850,000 (!) Bitcoins in total. Many users never got their money back, and Karpelès was found guilty on several charges in Japan, where Mt. Gox operated.

So, what was the problem and could this happen again? For the most part, Mt. Gox held all funds in so-called hot wallets. Those wallets are connected to the internet and therefore more accessible by hackers. And while hackers are of course still a concern, nowadays many exchanges like Coinbase are holding over 90% of all funds in cold wallets to minimize your risk. But it is still a good reminder: always consider who you trust with the keys to your holdings!

And next time – how investors lost $4 billion on a coin that didn't even exist.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.

Does the world need crypto? Part 4: The ingredients of the perfect blockchain

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

Welcome back to our mini-series on: Does the world need crypto? This is the final part, so make sure you start from the beginning.

By now you know: Bitcoin was born out of idealism – but it's taken a very long time for crypto to finally catch up with real-world use cases. And still, Bitcoin is limited in functionality, slow, and a planet-killer. Ethereum could do it all, but is expensive to operate and slow.

So, today: Let's talk about the making of a perfect blockchain, one that solves real problems, and solves them efficiently.

First: speed and throughput. Just VISA alone can process around 10,000 transactions per second. The true amount of times money changes hands every day is impossible to estimate, but for context: Ethereum currently processes only about 15.

Second: Decentralization - is a blockchain really free from the influence of a few? While many claim they are decentralized, they are actually under the control of a few who hold a lot of voting power. And others like Ethereum have the opposite problem: They can't seem to adapt quickly, because there are so many moving pieces.

Third: Is it easy to use? Can you imagine paying with crypto at the gas station, if you have to exchange things and then fumble for a strange wallet ID? Of course not. How blockchains think about the end user experience will determine how popular they become.

And last: Does it accomplish all of this while doing good? We here at cryptohunt are very critical about Bitcoin and Ethereum's energy usage, when faster carbon neutral or even negative alternatives already exist. Is it limited in growth because it only helps rich people trade expensive NFTs or does it enable billions of small payments in places where people don't have fair access to bank accounts?

All these should give you a great starting point to do your own research into what may succeed in the long run. And of course it is no coincidence we care about that - you'll find answers to all of these on cryptohunt.it when we launch next week!

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.