What does the future hold for currency?
From the Presidency of Donald Trump, the horsemeat scandal, all the way to smartwatches - it’s almost shocking the number of times the writers of The Simpsons have been able to predict the future. Which, at times, leads us to believe that the world might actually be run by Lizards and that the weather is controlled by John in the climate department.
More recently, they did it with cryptocurrency. In one episode, the price of Bitcoin is predicted to reach infinity - suggesting that crypto is well on the way to being the leader of all currencies.
Last month saw the hacking of Axie Infinity’s Ronin bridge - Axie Infinity is a well-known online game in which participants can win cryptocurrency - the company took a $625 million hit as outsiders infiltrated the network - leaving investors dry. This has been described as one of the largest hacks to date in decentralised finance (DeFi) and certainly wasn’t the first of its kind. This begs the question, how trustworthy is this new technological phenomenon over a crisp, reliable £50 note?
How common are crypto hacks?
Ponzi schemes have been around for decades now and it's evident that joint-stock investment plans have, in some way or another, always come with an element of danger. You only need to tune into Netflix’s Tinder Swindler or BBC’s The Missing Crypto Queen podcast to hear about the most recent scandals of our modern times.
In Axie Infinity’s case, the Ronin bridge is just one element within DeFi that allows investors to transfer values over a network, using a blockchain bridge. In light of the recent hacking, could this see a shift into a more secure method of trading in crypto?
Are blockchain bridges risky?
Essentially, a blockchain bridge takes your currency from one account to another, acting as a way of connecting the two. Multiple signatures are required on each bridge and smart contracts are in place on both chains - this is where human interaction is necessitated.
It can be argued that security limits make blockchain bridges impossible to keep around. Each chain can have different protocols, governance rules and functionalities that make them appear better than another of its kind.
How has investment changed?
The UK government announced earlier this week that they are in the process of creating a new cryptocurrency in the form of NFTs (Non-Fungible Tokens), which, in the current political climate, seems like a smart thing to focus on.
With so many emerging cryptocurrencies on the market, it's long been a fight to determine which ones are legitimate and trustworthy, and which are fraudulent. It's easy to imagine how various methods of transactions will arise with new forms of currency, and as we catapult toward a cashless society, it is our responsibility to adopt new ways of protecting the most vulnerable.
Who’s to say whether The Simpsons got it right.