What an exciting time – if I can be permitted to use that term – it is proving to be in the field of digital assets – and let’s use that catch-all label, rather than a more myopic focus on cryptocurrencies. The first week of October saw the Financial Times report on an estimated $570 million loss of digital tokens from Binance, via compromise of the BSC Token Hub. Just this morning, Bloomberg reports a loss of $100 million in investors assets following manipulation of the price of the proprietary Mango token via an insecure price oracle. These incidents further undermine public confidence in the digital currency space and compound other losses incurred over recent years that now amount to billions of dollars of lost value. TechCrunch attributes 97% of losses disclosed in Q2 of this year to illicit hacking, indicating the permeability and insecurity of current digital infrastructures.
As if the confusion created between the promised benefits of digital currencies for seamless global transactions and democratization of finance, and the evident insecurity and illegal leveraging of these assets is not enough to bear, yesterday saw more contradictory information being communicated. On the one hand, Sir Jeremy Fleming, the Director of UK GCHQ, repeated warnings about China’s potential use of cryptocurrencies, including the state-backed digital renminbi, to exert control over its citizens at home and to evade economic sanctions abroad. On the other hand, hours later, Google announced a strategic partnership with Coinbase to enable payment for cloud services with digital currencies and preparation for the transition to Web 3.0.
Amidst the turmoil surrounding crypto currency, we then find the renowned artist Damien Hirst – known for pushing the boundaries of modern art – burning his paintings in a new exhibition, entitled “The Currency”, where purchasers of the combustible artworks have elected to retain only a digital representation through a non-fungible token. The incendiary nature of this exhibition, the remarks of Sir Jeremy Fleming, and the financial losses incurred by investors all point to what might seem to be an existential crisis emerging between the familiarity, and perceived security, of “real” things, and the vulnerability of our virtual selves in tomorrow’s – or even today’s – digital metaverse.
At Fortanix, we are contemplating the future too, alongside many of our customers who are in the process of shaping it. We thought about the use of cryptocurrency to circumvent economic sanctions back in February and we introduced new tools to support decentralized finance (DeFi) and Web 3.0 customers in June. We have also been thinking about what identity and provenance will look like in the virtual future and how blockchain technologies, pivotal to decentralized systems, can be effectively secured. What our experience in the here and now tells us, however, is that cryptographic keys, tokens, and secrets need to be handled in exactly the same way as the more tangible assets of the old economy. Just as governments afford their stocks of gold bullion the utmost protection, we must also protect the cryptographic artefacts that define and control value within the digital domain.
Fortanix Data Security Manager™, which leverages the security provided by Confidential Computing is now securing huge volumes of cryptographic transactions for some of the largest and most security conscious organizations in the world. The benefits of this state-of-the-art solution are also being realized by smaller, disruptive companies, with innovative business models based on a data-first approach to security. At Fortanix we are continuing with development of new and ground-breaking capabilities in the area of cybersecurity that will help to ensure a more robust digital economy, improved transparency in decentralized systems, and auditable compliance with existing, anticipated, and as yet unforeseen regulatory regimes.
These are indeed “exciting” times for those working to secure our most sensitive data, including the proliferation of digital assets that are now part of our economic and cultural context. As Web 3.0 takes shape and society grapples with the challenges that arise with this revolution in affairs, a consistent thread emerges from the stream of news stories that form our daily newsfeeds: Unless you focus on the security of your digital assets, or those entrusted to you by your customers, you might find them going up in smoke, just like one of Damien’s paintings!
To find out more about how Fortanix can support your journey to data-first security and Web 3.0, please contact us via firstname.lastname@example.org.