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Tuesday, October 4, 2022

Wanna play bridge? – Morning Brew

Photo Illustration: Dianna “Mick” McDougall, Sources: Getty Images
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Who among us hasn’t drilled into a bank vault, pilfered thousands in cash, and absconded to Monaco with a glamorous lover? (No one? Just me?) Well, I’m not the only one who’s had a good heist as hackers have snatched nearly $2 billion from vulnerable blockchain bridges this year. But what *is* a blockchain bridge, exactly?
Picture a digital bridge lined with cold, hard cash. These bridges link blockchain networks together, allowing crypto investors to move their money around between chains. Of course, today’s crypto market offers roughly one buttload of different blockchains, all of which rely on different programming languages and system rules. This makes cross-chain trading a bit tricky.
Think of it in terms of international currency. You can’t schlep to Brisbane and buy a bottle of eau de snail with a wad of Nigerian naira, right? No, you’d need to exchange the naira for Aussie dollars first. That’s essentially the role of a blockchain bridge. So if you had some bitcoin, and you wanted to buy an ungodly expensive Bored Ape NFT in ether, you’d need to swap one for the other.
To use a bridge, you have to deposit your original tokens—be they bitcoin, ether, or another cryptocurrency—into a smart contract, which is a handy program that locks your original assets in exchange for an equivalent amount of a new asset. And just like crafty burglars can steal cash from a bank vault, cybercriminals can hack into vulnerable blockchain bridges to nab locked assets.
Thankfully, crypto services recognize this potentially serious vulnerability and have started investing in security programs. Still, some investors—myself included—would rather scream “Bloody Mary!” into a bathroom mirror five times than mess around with crypto.🩸—Lillian
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