“No man is an island, entire of itself.” – John Donne. Like all apes, human beings are social animals. We gain our education and emotional fulfillment from the people around us, and moreover, none of us would survive to adulthood without the proverbial village helping to raise us.  When it comes to business too, community is vital, creating strong brand loyalty and word of mouth advertising. Pre-internet, it was difficult to achieve this; traditional marketing techniques like TV ads, billboards and brochures don’t really bring customers together. And yet there are examples of businesses that thrived by fostering a community – Harley Davidson for example. The motorcycle company had been struggling to compete with imported vehicles, but during the 1980s began focusing on building a community based around a brand identity – a brotherhood of bikers. Nobody can argue that this wasn’t effective. When the internet came along, businesses and organizations soon realized that it was more than just a free international billboard – it gave them the power to create online communities. Nowadays, a business is unlikely to last long if it neglects its social media.

How does this relate to cryptocurrency?

Cryptocurrency is inherently related to the concept of community. A blockchain, by definition, exists on all devices on a network and functions via some form of consensus mechanism. In other words, each blockchain is a community and community powers each blockchain. Furthermore, unlike heritage organizations which had to change tactics to adapt to the internet age, cryptocurrency was born to it. There’s no decades-long history of Bitcoin being advertised on billboards in Times Square or sending brochures out to potential customers’ homes by the thousands. Instead, Bitcoin was born with a twin – an online forum called Bitcointalk.org where the first ever Bitcoin transaction was initiated. The forum was also the place where the word “HODL” first appeared. The extent to which online communities drive the crypto economy cannot be overstated; a 2020 study by Frontiers in Blockchain found a strong correlation between keyword frequency over social media and price changes in Bitcoin and Ethereum. For example, before the BTC price crash of 2018, keywords relating to regulatory restrictions and altcoin adoption increased threefold. In other words, cryptocurrencies owe their success, and their very existence, to the community.

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What does this mean for the user?

Cryptocurrency users know that online communities are the only reliable place to keep updated with the ecosystem. Online communities are where people find out about new projects, where they track the progress of existing projects, and where they can find trading partners.  So you’re probably wondering – where are these places? Well, we’ll tell you.

Reddit

Reddit is one of the top twenty most-visited websites in the world, with approx. 1.68 billion hits per day (according to SimilarWeb). It’s essentially a platform enabling people to open forums (‘subreddits’) dedicated to specific subjects – be it cats, calligraphy, catapults, cryptocurrency or cacti. Specific cryptocurrencies have their own subreddits too. The main cryptocurrency subreddit (reddit.com/r/cryptocurrency) has around 3.5 million members, and the opinions of these virtual communities can have a very real-world effect on prices. For example, one of the factors causing Dogecoin to jump to a market cap of 9 billion USD was hype circulating in a crypto subreddit called /r/wallstreetbets.

Slack

Slack, an acronym of “Searchable Log of All Conversation and Knowledge”, is a messaging platform created in 2013. It’s used by more than 600,000 organizations, and sees almost 130 million visits a day. Its emphasis on enterprise customers means that it’s limited in terms of ground-level community-building, but its importance in the crypto world cannot be ignored: in September 2021 the US SEC ordered Ripple Labs to release its employee messages on Slack as part of the regulator’s legal battle against the crypto company.

Twitter

Twitter was another significant factor in the infamous rise of Dogecoin (thanks to an infamous tweet by Elon Musk). The ubiquitous networking platform has more than 200 million users and revenue surpassing 3.7 billion USD, so when a conversation about a crypto project starts to gain traction, the price of the token tends to go up (or down, depending on the nature of the conversation). So influential is the platform that numerous celebrities have gotten into trouble for using it to promote some cryptocurrency or other.

Discord

Another instant messaging platform with hundreds of millions of users, and another key venue for cryptocurrency discussions. Designed for gaming, it has features that set it apart from other messaging apps, such as bots that track and reward quality answers. This both gives users an incentive to participate meaningfully and helps to prevent bots and scams.

Telegram

Telegram is an encrypted messaging service where moderated groups housing up to 100,000 members can be opened by anyone. It’s used heavily in the crypto investment space, giving participants in crypto projects the opportunity to meet each other, make deals, and share news. One example of the utility of Telegram groups is the Kirobo P2P Swap Button. The service enables users to exchange tokens directly with one another at their own prices. But in order to do this, they need to find a swapping partner – and the dedicated Telegram group is one of the best places to do this.

Get involved!

One of the beautiful things about the internet is that it made the world a smaller place, and it can be stated that cryptocurrency is the financial version of this. Mass adoption of cryptocurrency will take control of finance away from big corporations and put it back at the community level, where it belongs. So why not get involved? Join the Kirobo Telegram group

You’ll often hear people talk about ‘blockchain’ or ‘the blockchain’ as if it’s some kind of monolithic entity. But there are actually hundreds of different blockchains operating at the moment, each acting as the consensus network of its own cryptocurrency. Nor is there any upper limit to how many could be created. Given the fact that they are all blockchains, you might ask if they are inter-compatible. A reasonable question with a simple answer: no. The Bitcoin blockchain doesn’t know what’s going on with the Ethereum blockchain, and vice versa, because neither receives input from the other network. And if you were to try and send BTC to an ETH address, that BTC would disappear into limbo, never to return.

Why does this matter?

The lack of interoperability is a major hurdle that needs to be passed to achieve mass adoption. To understand why, just imagine what would happen if all the world’s banks suddenly stopped accepting payments from anyone apart from their own customers. Incredibly inconvenient to say the least, I’m sure you’ll agree. And imagine if blockchain networks were used for things like criminal records, academics, and healthcare – not being able to access the records of a different network would become actively harmful – and even dangerous.

How can it be fixed?

There are two ways that this could be solved. One would be if one blockchain were to be used for everything, which is unlikely to happen. The other way is with a technology called ‘bridges’. Bridges are specialist software applications that allow tokens to transfer between blockchains.

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How do bridges work?

To explain it in simple terms: a cross-chain transaction has a source and target blockchain. In order for an asset to transfer from one to the other, it must be disabled on the former (by being burned or locked), and an equivalent minted on the latter. These equivalent tokens are known as ‘wrapped’ tokens. In other words, the token doesn’t really pass between the two networks, but the two agree by consensus to synchronize their books.  It’s estimated that 1 percent of all circulating bitcoins – at a total value of around 6 billion USD at the time of writing – is held as wrapped equivalents (WBTC) on the Ethereum blockchain. Why? Because the Bitcoin blockchain doesn’t have the capabilities of Ethereum. Using WBTC allows users to get the best of both worlds – in particular, the benefits of yield farms and other DeFi protocols that provide interest payments to participants.     Another important point to understand is that bridges, like other types of cryptocurrency-related services, can be centralized or decentralized. In the case of bridges, these terms are ‘federated’ and ‘trustless’, respectively. With a federated bridge, requests from the source to the target blockchain have to go through nodes designated the task; as with all centralized mechanisms, this presents a security risk. In contrast, trustless bridges work through wider consensus mechanisms that are less susceptible to corruption. Cross-chain transactions are verified by users who are incentivized to do so with a reward system, in a similar way to proof-of-work mining. That’s not to say that trustless bridges can’t bring issues – a badly-written smart contract, for example, can lead to a lot of problems.

 

Poly Network

That brings us to the hack of the Poly Network in August 2021, which saw more than $600 million of cryptocurrency stolen from three of the world’s biggest blockchains. This made it, officially, the biggest crypto hack in history, surpassing even the $500 million stolen from Coincheck in 2018.

How did it happen?

The Poly Network, developed on the NEO blockchain, acts as a three-way bridge between the NEO, Ethereum, and Binance Smart Chain blockchains. It works with a smart contract called ‘EthCrossChainManager’. A user that wants to transfer from one chain to another submits their signed transaction to EthCrossChainManager, which checks its validity and executes the same transaction on the target chain. The original validation of the transaction is carried out by a designated ‘keeper’, which are users delegated this task. The weakness that the hacker discovered was twofold: one, that EthCrossChainManager only checks if a block was signed by a keeper (rather than checking if the block itself is valid), and two, that EthCrossChainManager has the power to change who the keepers are. The hacker simply replaced the real keepers with their own. Once that was done, they were able to use the smart contract to make fake transactions on all three target blockchains, and thus extract a huge amount of free money.

 

 

What can we learn from this?

There was a happy ending to the saga – although the money couldn’t be forcefully retrieved, the community was able to blacklist the hacker’s wallets. As a result, the hacker returned all of the money. Why risk getting caught over money they couldn’t use? So that’s at least one positive that we can take from this hack. Even in the absence of a central regulatory body, the power of the community was enough to solve the problem. Another interesting point was raised by Shixing Mao, CEO of F2Pool. He pointed out that the hack will accelerate bridge development, and even went so far as to call it “historic”. He makes a good point; it can be argued that trials by fire like the Poly Network hack are a necessary evil, teaching blockchain developers about flaws and loopholes in their applications that they missed while writing them. Bitcoin is a simple idea, and this simplicity gives it strength. Conversely, blockchain bridges are necessarily complex, and as such prone to errors in their construction. Yet, the global adoption of cryptocurrency won’t be possible without them.