- Would banning bitcoin stop ransomware attacks?
- Are China’s bans a threat to bitcoin?
- Why we need to be proactive about our health…
Welcome to our weekly mailbag edition of The Bleeding Edge. All week, you submitted your questions about the biggest trends in technology.
Today, I’ll do my best to answer them.
If you have a question you’d like answered next week, be sure you submit it right here.
In The Bleeding Edge, we’ve been keeping an eye on the surge in cyberattacks on everything from Microsoft Exchange servers to IT (information technology) middleware like SolarWinds, the meat packing industry (JBS), hospitals, utilities, and pipeline infrastructure (Colonial).
Colonial Pipeline has been interesting to follow as it did not immediately disclose that it had paid up to $4.4 million in cryptocurrency to hackers that were holding Colonial’s control systems hostage.
It wasn’t the smartest move. Once Colonial paid the hackers, they provided software to undo the ransomware that had been installed.
In the days that followed, Colonial discovered that the software was so slow, it basically ended up needing to restore its systems from the ground up using its software backups. Was the payment all for naught?
Maybe not. It gets more interesting….
Colonial was working with the FBI to monitor the exchange of 75 bitcoins sent from Colonial to the hackers. Contrary to what most believe about cryptocurrencies, most blockchains are not anonymous, and transactions can be tracked.
The FBI tracked those 75 bitcoins. And when 64 of them were transferred to a new address, the FBI was able to get a warrant and recover the bitcoins.
Even though the majority of the bitcoins were recovered, Colonial only ended up with about $2.3 million. That’s because bitcoin has dropped in value so much since the time it originally bought them.
It’s great to see this kind of progress being made by the FBI. The organization is stepping up its game, mapping out and tracking hundreds of millions of bitcoin addresses that are associated with bad actors around the world. And it’s putting the technology in place to recover funds.
It also gives me a good laugh.
Many politicians and policy makers continue to try and paint cryptocurrencies as the desired medium of exchange for criminals because of its “anonymity.”
As we’ve just seen in the Colonial case, the fact that the ransomware payment was made in a cryptocurrency like bitcoin made it easier to track and recover, not more difficult.
Companies like Colonial Pipeline or JBS have been quick to make payments. It is easy to understand why. After all, the amount of the ransom is much smaller than the amount of sales that they’ll lose in just a single day.
This is why cyberattackers will be emboldened to step up their game and become more aggressive.
And that’s why this latest development at the FBI is so important. With enhanced tracking, tracing, and recovery abilities in place, cyberattackers will quickly recognize that they may not be able to recover any, or all, of the funds that were intended for them.
And while it may be extremely difficult for authorities to apprehend them, if the ability to safely recover and extract cryptocurrencies from a hack has been significantly curtailed, then it’s likely that there will be a reduction in attacks.
Or they’ll just return to conducting their business with the most common forms of currency used by the underworld – the U.S. dollar and the Euro.
The two of which are much harder to track.
And all this leads me into our first mailbag question today…
Would a bitcoin ban prevent crime?
Let’s begin with a question on cybersecurity and crypto:
Jeff. This past Sunday’s Meet the Press was very alarming. The topic was cybersecurity and ransomware. The attitude was to ban cryptocurrency (bitcoin, specifically) as a way to deter this criminal act, as it seems payment in crypto has become the asset of choice.
As you’re involved in all this on the federal level with the committee you sit on, how serious is this thought? I’m sure the government would rather find a quick fix, put the right protocols in place and find a way to act together with the corporate community and solve this huge problem our country and the world is facing.
– Bruce W.
Hi, Bruce, and thanks for writing in. This is certainly a topic that’s on some people’s minds with the recent ransomware attacks that have been in the news.
However, I don’t think we need to worry about the U.S. banning bitcoin as a result of its limited use in criminal activity.
For one thing, industry-leading blockchain forensics company Chainalysis, which we discussed back in April, puts illicit transactions at just 0.34% of all cryptocurrency activity in 2020.
And blockchain analytics company Coinfirm reports that crypto crime amounted to just under $10.5 billion last year. That might sound like a lot… But not when we compare this to the illicit use of fiat currencies.
Fiat financial crime in 2020 totaled $1.4 trillion – 13,200% more money than cryptocurrencies.
Not only that, but bitcoin isn’t untraceable or anonymous, unlike crimes using physical cash. As far back as 2015, FBI Assistant General Counsel Brett Nigh declared, “Investigators can follow the money.”
That was proven true in the recent Colonial Pipeline ransomware attack. Just this week, the Justice Department announced it had recovered 64 of the 75 bitcoins paid as the ransom. And the FBI’s new ransomware task force identified the criminals as part of a Russian hacking collective.
So while the government is clearly taking the rising threat of ransomware seriously, banning bitcoin transactions doesn’t appear to be necessary.
And given the way Wall Street and institutional buyers have been embracing bitcoin as an asset class in recent months, it doesn’t seem practical, either. It would likely have wide-reaching, negative economic impacts.
As one analyst put it, “Imagine if the U.S. banned adoption of the Internet in the 1990s, citing the ease of terrorist communication, protection of intellectual property, or confusion over financial transactions.”
So while certain government officials like Treasury Secretary Janet Yellen have been highly critical about digital assets, I suspect much of this is just a ruse.
As I wrote recently, I suspect the crackdown in the U.S. is driven by the desire to reduce competition for when the government releases its own central bank digital currency (CBDC).
What’s the risk of a 51% attack?
Next, a reader wants to know more about China’s latest moves against bitcoin:
As a longtime Bleeding Edge reader, I look forward to every edition. In your report on China banning Bitcoin mining, you said the 51% situation will be eased. I wonder if it may enhance the situation.
I say this because by removing 65% of the miners, the remaining miners will all hold a greater percentage of the mining. Could it be possible that these remaining miners would be able to group a 51% share more easily?
– Ian S.
Hi, Ian, and thanks for writing in. I’m glad to hear you’re enjoying The Bleeding Edge.
To catch new readers up, last week I wrote about China’s decision to ban financial institutions and payment companies from providing services related to cryptocurrencies. It also went a step further and included crypto mining operations in the ban.
And I noted that while most of the press surrounding this news was negative, there was an upside.
One of the main risks of bitcoin is the threat of a “51% attack.” This happens when an individual or colluding group of miners control 51% of the mining power. Because they have a majority, they could literally change transactions on the blockchain.
And with the recent developments out of China, I said the chances of this kind of attack are now reduced. That’s because more than 65% of the world’s mining power has been in China. Getting rid of this concentration will improve the network’s health.
And there are a few reasons why I don’t think we need to worry about increased risk…
First, pulling off a 51% attack isn’t easy. For such a feat, an organization would need to either amass enough mining hardware and power capacity to attack the network by itself or control enough mining pools to gain a majority.
As for the first option, the price tag alone limits the number of actors capable of pulling off that method. A conservative estimate puts the cost of the hardware and power requirements at roughly $5.5 billion.
That would, of course, require a vast quantity of new semiconductors from manufacturers that are already under constraints due to the current chip shortage.
And ultimately, nation-states threatened by bitcoin are more likely to heavily regulate its use or – like China – try to ban it.
As for taking control of mining pools… This route has its own issues. Primarily, these operators have long-term stakes in the Bitcoin blockchain. They simply have little incentive to attempt a 51% attack.
And even if an entity gained control of enough pools and convinced them to try, the miners themselves can switch pools at will. If a pool starts to reject good block additions to the blockchain, the miners can simply switch pools, making a sustained attack challenging.
China has, of course, been the greatest concern for these kinds of risks. Because of its immense government control of mining farms, many have worried it would attempt a 51% attack by leveraging its power over the pools located in its domain.
But due to the ban, the four largest pools, which are all based in China, have already reported hash rate drops this week between 11% and 30% over a 24-hour period.
That means we’re already starting to see Chinese bitcoin miners relocate their operations to countries with friendlier operating environments.
Given the smaller sizes of pools operating outside China, however, it’s unlikely we’ll see a similar kind of concentration elsewhere any time soon.
According to the University of Cambridge’s bitcoin mining map, Russia contributes just 6.9% of the bitcoin hash rate.
The U.S. is slightly higher at 7.24%. And the next highest countries are Kazakhstan with just over 6%, Malaysia with 4.3%, and Iran with 3.8%. No other country even breaks 1%.
In other words, it will take quite some time and effort for any player to get anywhere near China’s 65%+ status and pose a similar threat.
May the healing continue…
Let’s conclude with a number of reader responses to the Memorial Day essay on the good news I received from my doctors:
Just read your “I am the science” email and was delighted at the conclusion. So good that your efforts resulted in a shrinking cancer mass! I can imagine how relieved and grateful you must feel.
Having lost both of my parents to cancer and thinking that I’ll end up the same way, I feel inspired by your successful attempt to heal yourself. Giving up sugar would probably do me in (who can live without a daily rendezvous with ice cream?), but at least I know I should be striving for a serious reduction in sugar consumption and upping my physical activity. Thank you for sharing your experience and may the healing continue! God bless. Cheers,
– Maya C.
Way to go! You took a proactive approach and stuck to it. You need to be congratulated! I always appreciate your comments and wisdom, and I am sure sharing this venture will have a positive influence on many others. God Bless! Sincerely,
– Les P.
Jeff, I am a Legacy member and enjoy all your writings and investment advice. With regard to your physical, how do your results stack up against the prostate-specific antigen (PSA) test?
It is my understanding the inventor of the PSA wished he had not done it, as it caused so much anxiety with non-reliable results. My PSA has gone up and down, making doctors ready to do a biopsy at the drop of a hat, which were resisted only to have it drop back down the next year.
With your new regimen, the cancer has subsided, which makes us Brownstone subscribers happy along with you. Maybe this type of testing can prescribe regimens other than the radical treatments for patients willing to do the hard work you’re doing. Please keep up the great work, and I look forward to your comments on the above.
– Peter M.
Hi Jeff. As someone staring down the possibility of prostate cancer after several consecutive blood tests showing my PSA levels steadily rising over the past several months, I deeply appreciated your Memorial Day note about your own recent struggle with cancer. Kudos to you.
I’m extremely happy for you and your family and wish you continued improving health. I’m amazed that purely through exercise and diet you’ve succeeded in shrinking the cancer. You mentioned your specific exercise routine, but only broadly sketched out what you’ve done to reform your diet. I have to say that it left me wanting much, much more.
Do you think you could provide greater information on your personal story and exactly what you did to adjust what foods you ate to try to combat the cancer? Perhaps even give folks a short chart showing the types of dishes that you had for breakfast, lunch, and dinner over the course of a week?
I think you’d be performing an amazing service if you devoted one more “off-topic” item in a future edition of The Bleeding Edge that gave us a bit more detail on “Jeff Brown’s Sample Diet While He Was Fighting Prostate Cancer,” with all necessary caveats, of course.
Thanks for hearing me out, Jeff. Again, your story was inspiring and well worth telling, and I hope you’ll consider sharing a bit more information with those of us just starting down this road so we can consult our own doctors from a position of greater knowledge. Sincerely,
– John H.
Jeff, I read your story about your most recent health scare. It was truly inspirational, and I am glad you took control of the situation and changed the outcome. I recently had a similar health scare and wanted to ask you a little more about what resources you used (or read) to radically change your diet.
You mentioned you stopped eating all gluten, processed sugar, dairy products, and high-glycemic foods. Is there a defined regimen of alternative foods you followed, or was it more ad hoc? I have a lifetime membership with Brownstone Research, and I want to ensure we are both around for many years to enjoy the relationship!
– James S.
After reading this story about the process Jeff went through to battle his prostate cancer, I want to send to Jeff my sincere hope that he is highly successful in beating this horrible disease!
– Dwight B.
I wanted to let Jeff know that I went to Health Nucleus several months ago, and they found similar issues with my liver and pre-diabetes. I am thankful that Jeff wrote about this earlier this year, and I am now on a plan to get healthier as well. I would not have known about my health issues without Jeff’s initial recommendation of Health Nucleus – so please tell him thanks! And he has made some pretty solid investment recommendations for me as well. Thanks, Jeff!
– Lee S.
Jeff – Your Bleeding Edge email made my day. Congratulations on changing your lifestyle to reduce your prostate cancer. I look forward to hearing about your next checkup in six months.
– Warren S
Thank you to everyone who wrote in after reading my Memorial Day essay on my follow-up appointment with the Health Nucleus doctors.
The responses above are just a sampling of the well-wishes and encouragement I received from readers, and I’m truly touched by how many people reached out.
I’m actually a bit overwhelmed, and I feel truly grateful to have such thoughtful subscribers. I wish I could thank you all in person. It is very motivating as I am by no means out of the woods.
I don’t have a crystal ball, and I don’t yet know what the outcome will be. I just know that I need to keep working hard at it, continue to optimize my health, and track it closely.
To address several of the questions, here are some critical learnings that I have had over the last year for those wanting to understand the most important actions to take:
PSA and free PSA numbers are only loosely useful. They aren’t definitive. And from my perspective, they should not be used to inform any major medical decisions.
The first step that is useful is to have a prostate-specific MRI performed. This is very useful. The MRI will pick up both heavy inflammation and cancerous tissue. It will be visible to the eye. This is extremely useful information to determine next steps.
The next step is a prostate biopsy. Not fun at all, but this is the standard for confirming, without question, if one has prostate cancer. Not only that, but it also tells us what grade of prostate cancer we have – or don’t have. Again, this is a definitive test.
For those that haven’t had any issues with PSA numbers from blood tests, the single best thing that you can do is undergo a head-to-mid-thigh 3 Tesla MRI scan. It is remarkable how useful this is in finding any trouble spots.
And it will also produce the most accurate view on our body composition, down to the cellular level. These are not that expensive. An example of a company that specializes in these types of tests is Prenuvo, which has several locations and is expanding.
I’m sorry to say this, but ice cream is extremely bad for our bodies, especially for our prostates. It combines two of the worst substances for our prostates – processed sugar and dairy. Ouch. Processed sugar is bad for us in any form. It leads to inflammation, obesity, and it is a fuel for cancer. I know that this is hard to hear, but it is the truth.
And the single most critically important thing that we can do for our health is reduce our visceral fat. That’s the fat inside of our bodies, the very dangerous kind that chokes our vital organs and leads to disease.
And the only way to get rid of visceral fat is through sustained cardiovascular exercise. This means running, biking, rowing, etc. at a pace that elevates our heart rate to around 160 beats per minute, ideally for 30 minutes or more. It is so important for us to do that, preferably three to four times a week. It is hard work. I deeply understand that. And it is all worth it.
Our reward is our dramatically improved health, our ability to have more energy to spend with family and friends, and an increase in our lifespan. Please, please make this the cornerstone of your weekly routine. Combine this with a healthy diet, and it all falls in place.
As a supplement to exercise and nutrition, I have also found positive results with an infrared sauna. If used several times a week, I have noticed an improvement in my sleep and support for continued fat loss. One critical point, however – it is not in any way a replacement for real exercise. We have to do the hard work to shed the dangerous visceral fat. This is the way.
In the future, I’ll hope to provide a more detailed summary of diet and supplements that I’m using to empower my immune system to fight the cancer. But for now, I’ll provide a short list as a starting point:
Breakfast: Bowl of steamed vegetables (cabbage, mushrooms, onions, parsnips), two eggs with spinach, a few slices of smoked salmon, coconut yogurt with walnuts, small bowl of berries
Lunch: I fast during the day and rarely eat lunch
Snack: On the days when I have something, I’ll have a handful of nuts and/or a tin of sardines in olive oil
Dinner: Always wild-caught seafood, green vegetables
During the day: I have two pints of fresh carrot juice and one pint of a kale/beet/ginger juice
Throughout the day: Herbal tea known to be good at fighting cancer
No processed sugar
Only fish protein
Only low glycemic foods
I know it’s tough, and it’s hard to imagine eating like this. But it’s not bad at all once our bodies adjust to a healthy diet like this.
And I can promise everyone that after a couple of months, you can feel a big difference.
Aside from losing weight, our energy levels naturally rise. There aren’t the kinds of ups and downs due to our bodies metabolizing unhealthy foods. And I have found that my mental acuity has increased dramatically – great for work!
And I’ll be sure to keep readers informed as I continue to work to maintain and improve my health over the coming months. Like I said in my Memorial Day essay, if I made this much progress in the first six months, I know that I can do so much more.
Thank you again. And I wish you all good health and hope that you can join me in my journey to curing and/or avoiding disease, and living much longer. We have so much to look forward to.
That’s all we have time for this week. If you have a question for a future mailbag, you can send it to me right here.
Have a good weekend.
Editor, The Bleeding Edge
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