Tag: blockchain

Blockchain Innovation Will Put an AI-Powered Internet Back Into Users’ Hands

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The doomers have it wrong. AI is not going to end the world—but it is going to end the web as we’ve known it.

AI is already upending the economic covenant of the internet that’s existed since the advent of search: A few companies (mostly Google) bring demand, and creators bring supply (and get some ad revenue or recognition from it). AI tools are already generating and summarizing content, obviating the need for users to click through to the sites of content providers, and thereby upsetting the balance.

Meanwhile, an ocean of AI-powered deepfakes and bots will make us question what’s real and will degrade people’s trust in the online world. And as big tech companies—who can afford the most data and compute—continue to invest in AI, they will become even more powerful, further closing off what remains of the open internet.

The march of technology is inevitable. I’m not calling attention to this to cry that the sky is falling or to hold back progress. We need to help individual users gain some control of their digital lives. Thoughtful government regulation could help, but it often slows innovation. Attempting a one-size-fits-all solution can create as many problems as it solves. And, let’s face it, users are not going to retreat from living their lives online.

Major technology movements often come together—think of the rise of social, cloud, and mobile computing in the 2000s. This time is no different: AI needs blockchain-enabled computing. Why? First, blockchains enforce ownership. Blockchains can make credible commitments involving property, payouts, and power. A decentralized network of computers—not a big company, nor any other centralized intermediary—validates transactions, ensuring that the rules and records cannot be altered without consensus. Smart contracts automate and enforce these ownership rights, creating a system that ensures transparency, security, and trust, giving users full control and ownership of their digital lives. For creators, this means the ability to decide how others—including AI systems—can use their work.

Another basic ownership right that blockchains can enforce is identity. If you are who you say you are, you can sign a statement, cryptographically, attesting as much. We could carry our identities around the web without relying on third parties. Onchain identities could also help separate real users from bots and imposters. In the 1990s, no one on the internet knew if you were a dog. Now, people can know for sure if you’re a dog—or a bot. In 2025, I expect to see more “proof of humanity” on the internet, thanks to recent advances in these technologies.

In 2025, blockchains will be used to create tamper-resistant records of original digital content, a bulwark against deepfakes. When a video, photo, or audio recording is created, blockchains can provide and store a unique digital fingerprint. Any changes to the content alter that signature, making it easy to detect tampering. Blockchains can also store metadata and verification attestations from trusted sources, further ensuring content authenticity.

Finally, in 2025, blockchains will help achieve the original ideals of the internet, fostering a more creative, open, diverse web. Right now, users depend on a few internet giants—the same ones that are investing so heavily in AI (and asking for regulation to keep smaller competitors out). Websites and apps that were once open have added paywalls, restricted or closed their APIs, removed their archives, edited past content without permission, and added intrusive banners and ads. In 2025, blockchain alternatives will offer more choice, open source innovation, and community-controlled options. They will carry the torch of the open internet. Crypto will start taking power away from big tech companies, putting it back in the hands of users.

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December 11, 2024
Meet ZachXBT, the Masked Vigilante Tracking Down Billions in Crypto Scams and Thefts

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As ZachXBT has pursued that career as a crypto vigilante, he has also kept his mask firmly in place. Online, he appears only as his avatar, a kind of platypus cartoon figure in a detective’s trench coat or sometimes a hoodie. To avoid retaliation from his many enemies in the world of crypto criminals and con artists, he has never publicly shown his face nor revealed his real name or exact age and would only speak to WIRED on the condition that I not try to dig up those identifying details.

On some of their early conference calls, McGill says, ZachXBT would not only keep his camera off but even use a voice-changer application, sometimes sounding like a high-pitched “South Park character,” as McGill puts it, or on other occasions deepening his voice’s pitch until it reminded him of something out of a horror film. “It was very odd, initially,” says McGill, who at the time worked at the crypto-tracing firm TRM Labs. “But I respected his privacy, because this anonymous guy was doing really great work.”

ZachXBT exposes so many crypto criminal scams and thefts on a near-weekly basis, often working far faster than law enforcement agencies, says Nick Bax, a cryptocurrency investigator and founder of the firm Five I’s, that Bax has wondered half-jokingly if he might be some kind of bot.

“He is a machine,” Bax says.

As part of one investigation last year where they collaborated to trace a $60 million theft from a crypto project called AnubisDAO in 2021, Bax gave ZachXBT a list of 500 transactions on a Saturday night, each of which needed to be manually analyzed along with all its connected blockchain addresses. “I figured that would keep him busy for at least a few days,” Bax says. Instead, by early the next afternoon, ZachXBT had gone through every transaction and identified which ones were tied to the theft. “I was shocked,” Bax says. “He definitely had to have been on his computer for 12 hours straight.”

Many of the results of ZachXBT’s investigations are unceremoniously posted to his account on X. Over time, however, his findings have increasingly gained attention from law enforcement agencies—several of which he now often shares his findings with prior to publication. The result has been real and growing consequences for the targets of that detective work. “As Zach has gotten bigger, there have been financial repercussions and legal repercussions,” says Taylor Monahan, a security researcher at crypto firm MetaMask and one of ZachXBT’s closest collaborators on investigations, including the $243 million theft case. “If Zach posts a thread about someone now, and it’s a good one, that person is going to get arrested.”

From Victim to Whistleblower

So how has ZachXBT managed to outrace and out-trace even law enforcement’s crypto investigators, despite having no formal training or organizational support? Even he isn’t entirely sure. “That’s a tough question. I don’t know why I’m good,” ZachXBT tells WIRED in a phone interview. He chalks it up to a willingness to work around the clock—crypto markets never close, after all—and a familiarity with analyzing cryptocurrency blockchains that comes from years of poring over those vast ledgers of transactions. “The more you look at the blockchain, like when you eat, sleep, and breathe it, it starts to make more sense over time,” he says. “You can just start to pick up on those connections. I can look at a wallet, and I can profile it and tell you if it’s a bad actor within seconds.”

ZachXBT says that familiarity with blockchains comes from his years of experience as a crypto enthusiast and trader—and as a victim himself of some of the crypto economy’s many traps for unwary investors. Around 2017, he says, he was naively buying thousands of dollars worth of crypto tokens that would all eventually tank in value—often due to so-called “rug pulls,” when a crypto token’s creator sells off their holdings and all the other investors are left with a worthless asset. “I was buying in like, ‘This is going to change the world.’ I just held it and never sold,” ZachXBT says. As a result, he says, “I was the person getting scammed.”

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October 24, 2024
Nigeria Drops Charges Against Tigran Gambaryan, Jailed Binance Exec and Former IRS Agent

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For eight months, the criminal investigator who pioneered cryptocurrency tracing as a law enforcement technique has, in a bizarre twist of fate, been jailed in Nigeria facing charges of money laundering and tax evasion. Now he is finally coming home.

On Wednesday in Abuja, a court ruled that criminal charges against Tigran Gambaryan, a Binance executive who previously served as an IRS criminal investigator for a decade, will be dropped on medical grounds as pressure from the US government has grown to secure Gambaryan’s release.

Gambaryan was detained in February and later jailed after being invited to the country by Nigerian officials to discuss a dispute between the Nigerian government and Binance over its history of money laundering and the exchange’s alleged role in devaluing the Nigerian national currency. He’s since been held in the country’s Kuje prison, where, according to his family and his attorneys, he’s suffered acutely from a herniated disc in his spine that requires immediate surgery.

Despite the Nigerian court’s decision to drop the charges against Gambaryan, first reported by Bloomberg News, Gambaryan is still in Nigeria and was returned to jail after the ruling, according to Patrick Hillman, a former Binance executive and colleague of Gambaryan’s who has been involved with the lobbying effort to free him. “We’re all kind of waiting right now to hear that he’s on a plane, airborne, and headed home,” Hillman says. “Until we have verification of that, we’re all just clutching our shirt collars and waiting to make sure there are no other hiccups.”

A spokesperson for Gambaryan’s family declined to comment, and Binance didn’t immediately respond to a request for comment. The country’s criminal case against Binance, despite Gambaryan’s release, will continue, according to Reuters.

International pressure has steadily grown on Nigeria to release Gambaryan, whose health has visibly declined during his time in jail. In July, he attended a court hearing in a wheelchair. In September, a video captured him limping into court on a single crutch, pleading in vain for help from a Nigerian security guard.

Meanwhile, 16 members of Congress signed a letter to the White House calling for Gambaryan’s case to be treated as a hostage situation. A resolution advanced in the House Foreign Affairs Committee called on the US to push for his release. Most recently, a group of state attorneys general similarly called on the White House to apply the necessary leverage to free Gambaryan.

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October 23, 2024
A Mysterious School for the Network State Crowd Is Now in Session

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Last month, venture capitalist Balaji Srinivasan announced the Network School, a three-month learning retreat marketed to people interested in “network nations,” a kind of utopia for the anarchocapitalist set. The inaugural class is 150 people. It starts today.

Details about the school have been shrouded in secrecy, even for the applicants. Aspiring Network School participants put down deposits of up to $2,000 without even knowing the Network School’s location. Srinivasan has still not disclosed it publicly, although social media posts and WIRED reporting indicate that it’s Forest City, Malaysia.

The Network School is one of the most ambitious projects yet for people interested in creating what Srinivasan calls a “decentralized country.” The goal is for people dissatisfied with their own society to band together and create a movement spawning “parallel” societies, special economic zones that have alternative education systems, media institutions, and currency—as well as wealth-friendly tax laws. A crucial step is having physical territory, and the Network School clears that bar. On Sunday, Srinivasan said he is working to “build out the real estate” with the goal of “scaling the school.”

While Srinivasan has still not publicly disclosed the Network School’s location, he’s been more clear about its values, to which he says students should conform. According to his Substack post introducing the Network School, these requirements include an admiration of “Western values,” seeing Bitcoin as the successor to the US Federal Reserve, and trusting AI over human courts and judges.

“It is for those who believe in technology, harmony, internationalism, and capitalism,” Srinivasan’s Substack post reads. “It’s for those who want Silicon Valley without San Francisco.”

Srinivasan added that the school is open to artists, athletes, and technologists from any country.

On the application for the school, people are asked to rate a series of things in different categories on a scale from negative 10 (not favorable) to positive 10 (favorable). The topics include “protocols” such as Solana and Bitcoin maximalism, “politics” such as Karl Marx and Jordan Peterson, “technology” such as AI accelerationism and military tech, “places” such as Dubai and Israel, “culture” such as tattoos and traditional masculinity and femininity, “policies” such as Drag Queen Story Hour and carbon credits, and “progress” such as artificial general intelligence and space exploration.

On X and Reddit, several people said they were accepted to the Network School and had to pay for the first month’s rent upfront within two business days of being accepted or risk losing their place. The time crunch, and not knowing where exactly they would be staying, caused stress for some people.

One tech worker who was accepted to the Network School tells WIRED that he’s very on board with the school’s premise, but that sending money without knowing key details was a bridge too far.

“I chatted about it with some friends, and they were like, ‘Wow, that sounds so dodgy’—and then I was like, ‘Yeah, you’re right,’” says the applicant, who asked for anonymity, citing privacy concerns.

In terms of day-to-day life at the Network School, Srinivasan says in his Substack post that students will complete daily problems in mini classrooms. These will involve a combination of coding and posting on social media, and earning “proof-of-learn” NFTs upon completion. Srinivasan says students can also compete for daily “crypto prizes” worth $1,000 “for open source projects, AI content creation, and microtasks.”

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September 23, 2024
‘Should Art Be Regulated by the SEC?’: NFT Artists’ New Lawsuit Seeks Answers

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The essence of the case, Frye adds, is about NFT art writ large and “using NFTs the way most people are—to sell them.” The point is to get SEC regulators to have a “long, hard think” about what’s in their purview, he says.

Security vs. Art

In 1946, a US Supreme Court ruling about the Howey Company, which sold citrus groves to buyers who shared in their profits, cemented the test for determining what a security is. The “Howey Test” defines securities as “an investment of money in a common enterprise with the expectation of profits from the efforts of others.”

In other words, Gottlieb says, it makes an investment contract a security. That can be tricky to apply to art, analog or NFT-affiliated. “When you sell a certificate, what you’re really doing is essentially selling art collectors an interest in your art,” Frye says. That means buyers are investing in the expectation “that you’re going to get more famous.” That fame, in turn, makes the art more valuable.

If you look at it that way and apply the Howey Test, Gottlieb says, it can look very much like art buyers are investing in a common enterprise and expecting to benefit from the artist’s efforts. The difference, Gottlieb says, is that “artists don’t owe you anything.” You may hope that your purchase of an autographed Brat album will go up in value as Charli XCX keeps selling out concert venues, but that wasn’t promised with the record’s sale. Same, the suit argues, goes for a digital cat cartoon tied to some blockchain-based code.

Plus, people aren’t only buying art NFTs to resell them at a profit. They buy Mann’s work, Gottlieb says, “for all sorts of reasons,” like just enjoying the music itself. But based on the SEC’s Impact Theory and Stoner Cat rulings, Frye argues, “not only the entire NFT market but the entire art market itself is a security.”

Through a spokesperson, the SEC declined to comment. Though the agency’s past actions don’t necessarily indicate that the SEC views all NFTs as securities, it hasn’t provided a clear stance on how artists using the technology for sales should proceed with selling their work, either. Mann’s work “might be different enough” from the two projects that paid fines to the SEC, says attorney Michael Rinaldi, partner at Duane Morris in Philadelphia. If owners hold onto an NFT because it’s “collectible or unique … or for enjoyment, as opposed to being an investment, that wouldn’t be a security.”

Mann and Frye’s lawsuit aims to get some answers from the SEC. “Other than [Impact Theory and Stoner Cats’] digital nature, there was little conceptual difference between those series of artworks and, say, Andy Warhol’s 1962 series” of 32 Campbell’s Soup Cans, the lawsuit states. The Stoner Cats NFTs funded an animated series, but what does buying art do for artists if not fund their future work?

Then again, NFTs have a fundamentally money-related nature that other artistic media don’t. “Canvas is not a financial layer,” says London-based Ben Gentilli, who creates blockchain-related art under the name Robert Alice. NFTs, he says, are like “if art was made with bank notes.” When NFT art sales took off in 2021, exemplified by the $69 million Christie’s sale of a work by digital artist Beeple, the market highlighted the medium’s investment potential. “You could see that creep into the language of people marketing NFT projects,” Gentilli says.

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August 26, 2024
How Telegram Game ‘Hamster Kombat’ Got 300 Million Users—and the Ire of Iran’s Military

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The founders reveal their third inspiration, and this one’s less obvious: TikTok.

“First, there was Musical.ly, and it almost died,” say the founders, referring to the original incarnation of TikTok. Then ByteDance (which acquired Musical.ly) found ways to incentivize sharing. “People underestimate the effect of these tiny mechanisms,” say the creators. “Sometimes, they can turn the tide.”

Tiny mechanisms are everywhere in Hamster Kombat. You earn coins for inviting friends to the game, watching YouTube videos, subscribing to the Telegram channel, and so on. “We knew that the only way for us to grow was by making everything inside the game viral,” claim the founders. “We simply didn’t have $50 million for marketing.”

Going viral doesn’t happen by accident. Every day, the founders obsessively follow real-world events and incorporate them into the gameplay. “When Dubai hosted a crypto conference and suddenly got flooded, it was a devastating situation, but you could feel the irony,” say the creators. “We went and made a card [in the game] about this. And then people just started getting this card, taking screenshots, posting on social [media].”

The game is deeply self-aware and packed with crypto Easter eggs. “I can open Hamster Kombat and see this inside joke that reflects what the community is saying,” says Amanda Cassatt, the CEO of Serotonin, a marketing firm. “The game is fun, and it’s funny.”

When you first open Hamster Kombat, it looks so simple it doesn’t even feel like a game. Tap, get coins. Tap, get coins. “I wouldn’t consider it a game. It’s sort of entertainment,” says Matvii Diadkov, the founder of the crypto advertising network Bitmedia who has created and analyzed crypto games. “It’s even more primitive than hyper-casual games.”

But then something weird happens. When you explore the app, you’re confronted with a dizzying menu of options for scaling your hamster’s crypto exchange, such as investing in your UX and UI team, building an NFT metaverse (remember those?), or obtaining a legal license to operate in Nigeria. These options are deep cuts into Web3 nerd-dom, often requiring a bit of research if you’re an outsider. Each option has a cost (in the free coins you earn), but investing in it can boost your hamster’s profit-per-hour. This can get addicting.

“I realized that strategy helps save time and improve efficiency,” says Liliya Chumarina, a 24-year-old freelance marketer who lives in Milan. At first she just clicked, then she watched the game’s educational videos (racking up social media views for Hamster Kombat), then she created a spreadsheet to help her optimize yield. Thanks to this automation, Chumarina says, “now I usually spend no more than one hour per day.” (Cassatt considers the game not as simple as tic-tac-toe, but not as complicated as chess. “It’s checkers.”)

The founders seem exasperated by the game’s “hyper-casual” label. “Some people call it a tap-to-play game. It’s not exactly right and dumbs it down,” say the creators. “You only need to tap at the very beginning. Very soon, you get access to all the passive income streams which quickly outweigh everything else.”

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August 1, 2024
The $2.3 Billion Tornado Cash Case Is a Pivotal Moment for Crypto Privacy

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In the conclusion of that same statement to the court, they point out that under Dutch law the maximum prison sentence for money laundering at the scale Pertsev allegedly committed is eight years, and they ask that Pertsev be sentenced to five years and four months if he’s found guilty.

The Tornado Rolls On

Cryptocurrency advocates focused on privacy and civil liberties will be closely watching the outcome of Pertsev’s case, which many see as a bellwether for how Western law enforcement and regulators will draw the line between financial privacy and money laundering—including in some immediate cases to follow.

The US trial of Tornado Cash’s Storm in a New York court later this year, as well as the US indictment last month of the founders of Samourai Wallet, which prosecutors say offered similar privacy properties to Tornado Cash’s, are more likely to directly set precedents in US law. But Pertsev’s case may suggest the direction those cases will take, says Alex Gladstein, the chief strategy officer for the Human Rights Foundation and an advocate of Bitcoin’s use as a human rights tool.

“What happens in the Netherlands will color the New York case, and the Tornado Cash cases are really going to color the outcome of the Samourai case,” Gladstein says. “These cases are going to be historic in the precedents they set.”

Gladstein, like many crypto privacy supporters, argues that anyone weighing the value of tools like Tornado Cash should look beyond its use by hackers to countries like Cuba, Venezuela, and India, where activists and dissidents need to hide their financial transactions from repressive governments. “For human rights activists, it’s essential that they have money the government can’t surveil,” Gladstein says.

Regardless of the verdict in Pertsev’s case or that of his cofounder Roman Storm in the fall, Tornado Cash’s founder’s core argument—that Tornado Cash’s underlying infrastructure has always been out of their hands—has proven to be correct: Tornado Cash lives on.

True to its promise of decentralization, Tornado Cash still persists after its cofounders indictment in the fall of last year—and is now out of their control. In March, $283 million flowed into the service.

Courtesy of Chainalysis

When the tool’s centralized web-based interface went offline last year in the wake of US sanctions and the two cofounders’ arrests—Roman Semenov, for now, remains free—Tornado Cash transactions dropped by close to 90 percent, according to Chainalysis. But Tornado Cash has remained online, still functioning as a decentralized smart contract. In recent months, Chainalysis has seen its use tick up again intermittently. More than $283 million flowed into the service just in March.

In other words, whether it represents a public utility for financial privacy and freedom or an uncontrollable money laundering machine, its creators’ claim has borne out: Tornado Cash remains beyond their control—or anyone’s.

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May 13, 2024
Ethereum’s Cofounder Says SEC Is ‘Gaslighting’ Everyone About Crypto

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Joe Lubin is in a fight with the Securities and Exchange Commission. Not only is the financial regulator waging war against Ethereum, he claims, but making a grab for jurisdiction over the future of the Internet. So Lubin has decided to punch back.

In 2015, Lubin was part of the team that created Ethereum, the computer network home to the world’s second largest cryptocurrency, known as ETH. Later that year, Lubin founded Consensys, with the loose ambition to support the development and adoption of Ethereum and built software products on top of the network. In April, Consensys received an unwelcome missive—known as a Wells Notice—from the SEC, informing the company that it was about to be sued. The regulator’s grievance, Consensys was told, had to do with one of the software products in its stable: MetaMask, a crypto wallet that lets users store crypto coins and interact with Ethereum-based apps.

Consensys claims that the SEC notice, which has not been made public, states that MetaMask has made the company into an unregistered securities broker. Specifically, the SEC takes issue with two MetaMask features: one that allows users to trade between different tokens and another that lets them lock up their tokens in exchange for a regular reward, in a process called staking.

On April 25, Consensys filed a lawsuit of its own against the SEC. The complaint accuses the regulator of an “unlawful seizure of authority over ETH,” which “bears none of the attributes of a security”—the specific type of financial instrument over which the SEC has dominion. The SEC having its way “would spell disaster for the Ethereum network,” the complaint alleges.

In its Wells Notice, the SEC stopped short of calling ETH itself a security, says Consensys, focusing instead on the MetaMask features. But according to Consensys, the agency has long been quietly conducting an investigation into Ethereum, in the view that ETH should be reclassified as such.

That’s not fair, claims Consensys, because an SEC director has previously described ETH as a commodity, not a security, and the Commodity Futures Trading Commission, a separate US financial regulator, has made the same contention. “Consensys built its business against the backdrop of this regulatory consensus,” the lawsuit says.

In bringing the lawsuit, Consensys hopes to drag itself and Ethereum out from underneath the SEC, by clarifying the limits of its jurisdiction, and embolden the rest of the crypto industry to retaliate against what it describes as “aggressive and unlawful SEC overreach.” An SEC spokesperson declined to comment on the specific allegations made by Consensys, saying only that “noncompliance with the securities laws deprives investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosures, segregation of customer assets, safeguards against conflicts of interest, oversight by a self-regulatory organization, and routine inspection by the SEC. It’s investors who get hurt and the American financial markets that may suffer.”

The following Q&A has been edited for brevity and clarity.

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May 6, 2024
Crypto FOMO Is Back. So Are the Scams

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An analysis performed on behalf of WIRED by crypto auditing company Hacken identified red flags in the token’s underlying code that might in some circumstances betray a scam. Those included the absence of a function that prevents the issuer from stealing away with the pool of tokens set aside to make trading on the secondary market possible, among others.

Suspecting he has fallen victim to a scam, Ryan has tried to warn others away. “While $750 is a lot to lose, it wouldn’t be the end of me,” he says. “But I feel bad for those that really lost.”

WIRED did not receive a response to a request for comment sent to email aliases listed on the Rebel Satoshi website.

The type of swindle Ryan suspects he has been caught in is known as a token presale scam. The format has been around for a while, but amidst the FOMO that comes with skyrocketing cryptocurrency prices, people are particularly vulnerable. “These scams are broadly correlated to recent events,” says Ben-Natan. “They aren’t new phenomena, but they resurface.”

There are variations on the theme, explains Ben-Natan, but the scams tend to pull from the same playbook. Typically, the developers—who remain anonymous—invest in glossy social media marketing and paid-for placements in crypto media outlets, advertising their token as the next hit memecoin and promising a discount to presale investors. In some cases, the token never materializes and the scammers make off with the funds. In others, the scammers abandon the project after selling off their own token holdings, or fail to deliver on the promise of long-term support.

In the latter scenario, as with Rebel Satoshi, the line between a scam and an unsuccessful project is not always clear. And occasionally, because of the large sums of money involved, “something that wasn’t a scam initially can later transform into a scam,” says Ben-Natan. “As time passes, the line can become blurrier.”

In large part, these scams are conducted by sophisticated cybercriminal groups, says Ben-Natan, not lone actors. A “micro-economy” has formed around them, he says, whereby separate parties might be responsible for managing different elements of the charade, from the marketing campaign to the website design, and so on. The largest of these operations can rake in hundreds of millions of dollars. “The numbers are staggering,” says Ben-Natan.

For anybody willing to look for them, the warning signs are there, says Dyma Budorin, cofounder of Hacken. It is straightforward to check whether the creators have revealed their identities, for example, or whether a system is in place that prevents them from dumping their holdings without warning. But in their eagerness to enter into new projects early, few investors bother with due diligence. “It all comes from greediness,” says Budorin.

In extreme cases, profit-hungry investors have taken to using “sniping bots” to automatically purchase tokens as they first begin to trade on the open market, says Budorin, in a bid to get in early. Others are engaging in copy-trading, a process whereby they blindly replicate someone else’s trades, so they don’t have to do their own research. Both techniques increase the likelihood someone is exposed to a scam.

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April 15, 2024
Sarcophagus Is a Dead Man’s Switch for Your Crypto Wallet

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The system, says Hamilton, is designed to be “anti-fragile,” meaning it depends on no party’s good will to achieve its end. Nobody but the originator and recipient have access to the contents of the file, all other parties are financially incentivized to cooperate, and redundancies ensure the payload is always available. “Little strings of data control our lives,” says Hamilton. Because humans are “gooey”—that is, unreliable and prone to mistakes—the only sensible protection for those strings is cryptography, he adds.

There are various other ways, says Hamilton, that Sarcophagus might be applied outside of a crypto setting. A digital dead man’s switch could be used by a whistleblower to release incriminating material or by a dissident or journalist who suspects a threat to their life, as a kind of SOS. In a more mundane context, it could be used to pass account credentials from one generation of employees to the next.

ILLUSTRATION: ALBERTO MIRANDA

Sarcophagus has received $6 million in funding to date from investors including Placeholder, Blockchange, and Hinge Capital. The project is managed by a decentralized autonomous organization, or DAO—a collective that governs the Sarcophagus treasury and development process through a system of community voting. In its present state, Sarcophagus is best described as an “early beta,” says Hamilton. The service is operational but not widely used, and it does not generate significant revenue—only a small cut of every payment.

One barrier to broader adoption is that recipients must already have access to a crypto wallet, whose credentials are used to decrypt the data payload. There is an option to create a new wallet for someone, along with a PDF walking them through the process for accessing it, but a level of crypto literacy would certainly help.

As the generation of people comfortable with crypto grows older and begins to reckon more seriously with their mortality, Hamilton thinks a larger subset will begin to understand the need for a service like Sarcophagus. “Millennials are just starting to think about this problem,” he says. Hamilton imagines that more accessible services will be built atop Sarcophagus technology, too. These “boomer products,” as Hamilton calls them, one of which his own team is developing, will abstract away some of the technical complexity, such that people won’t realize they are using crypto infrastructure. (Although there is an inevitable trade-off between security and convenience.)

In any case, says Hamilton, the present system—whereby credentials to high-value crypto wallets might be stored in bank vaults protected by armed guards—approaches the absurd. The “billion-dollar file cabinet” has to go, says Hamilton. “We are still relying on heavy metal doors and guys with guns when cryptography itself can act as a steel wall of incredible thickness.”

This article originally appeared in the May/June 2024 issue of WIRED UK.

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April 10, 2024