Cryptocurrency is a form of digital money that is designed to be secure and, in many cases, anonymous.
It is a currency associated with the internet that uses cryptography, the process of converting legible information into an almost uncrackable code, to track purchases and transfers.
More than $300m of cryptocurrency has been lost after a series of bugs in a popular digital wallet service led one curious developer to accidentally take control of and then lock up the funds, according to reports.
Unlike most cryptocurrency hacks, however, the money wasn’t deliberately taken: it was effectively destroyed by accident. The lost money was in the form of Ether, the tradable currency that fuels the Ethereum distributed app platform, and was kept in digital multi-signature wallets built by a developer called Parity. These wallets require more than one user to enter their key before funds can be transferred.
It wasn’t too long ago that Silicon Valley scoffed at cryptocurrencies. All over coffee shops in Mountain View and Menlo Park, you heard the same conversation: “Sure, it’s cool technology, but when are we going to see the killer app”?
A few merchants dipped their toes into accepting Bitcoin in 2014. But adoption largely backed off. I remember seeing a few Bitcoin ATMs in Austin, and then they disappeared. Bitcoin reneged on its promise to replace cash, so most venture capitalists assumed it was dead on arrival. Without a killer app driving consumer adoption, cryptocurrencies seemed like they would be nothing more than a curiosity for cryptographers and paranoids.
In the last year, interest in cryptocurrencies has skyrocketed. The public cryptocurrency market cap has surged to highs of over $170B. With over 1.5B raised through ICOs in 2017, over 70 crypto exchanges open for business, and crypto hedge funds and VCs popping up left and right, it seems that everyone is clambering to get a seat on the rocketship.