It’s finally Friday! This is Coffee & Crypto, a newsletter sworn to report all the news that fits in a travel mug.

Espresso Shots

Big news from the day!

☕️ The latest data from US Bureau of Labor Statistics reports that prices of consumer products (like gas, groceries, etc.) are up 8.2% from a year ago. This higher than expected inflation report briefly sent Stocks and Crypto tumbling but both saw a rebound on Thursday morning. Bitcoin briefly fell to around $18,300 and the Dow to 28,700 - both seem to have found their bottoms and are now sitting closer significantly higher. After another rocky week on Wall Street, it might be time for something stronger than coffee.

☕️ Skype Co-Founder Jaan Tallin is investing in Fabric Systems, a company that aims to make bitcoin mining more energy efficient and sustainable. Their method? Dunking Bitcoin mining machines into a thermally conductive liquid to cool them down. Apparently this actually works, so that’s neat. The company also intends to make faster calculations than existing mining methods which should help make the mining process more efficient all around. Here’s hoping this technology has a better future than Skype!

☕️ Ethereum Exchange Uniswap has raised $165 Million in new funding. This is just the latest sign that while retail investors are still skittish, Venture Capitalists are hard at work spending massive amounts of money. This investment sets Uniswap’s value at a whopping $1.6 Billion. Investors in this latest round include Polychain Capital, a16z (Andreesen Horowitz,) Paradigm, SV Angel, and Variant.

Spilling the Beans

Recently, it feels like Crypto Hacks are in the headlines every single week. So, today, we thought we’d take a deeper dive into just that.

How safe is your money in Crypto? How can you protect yourself further?

In this section, we’ll explain how you can keep your crypto safe from hacks and vulnerabilities.

Ok so - where and how do these crypto hacks keep happening?

First of all, blockchains themselves are very difficult to hack. Information on a Blockchain is constantly verified by the chain’s computational power or hashrate, so in order to hack a Blockchain, you’d need to have 51% control of the hashrate. And the billions of dollars associated with controlling 51% of a hashrate tends to make it impossible to hack.

So if Blockchains themselves aren’t hackable, where are the vulnerabilities? Exchanges, Wallets, and Decentralized Finance Apps.

Decentralized Finance (DeFi) offers financial instruments without relying on an institution like a bank, brokerage or exchange. Decentralized Finance apps are where we’ve seen the most significant hacks this year. They’re likely the ones you’ve seen in headlines too.

This year DeFi Apps have lost nearly $3 Billion to hackers. Nearly all of these hacks have been a result of app vulnerabilities allowing hackers backdoor access into funds.

Exchanges like Coinbase, Bincance, etc. hold private keys for their customers and carry liquidity. For those reasons - they’re absolutely a target for hackers. Though they’ve avoided major hacks this year.

It’s important to note, you can still use these exchanges. Just hold your assets in a private wallet where they’re safe from attacks.

In Crypto, wallets are essentially bank accounts that hold our assets. These wallets are usually available as plugins on internet browsers - some popular ones include MetaMask, CoinBase Wallet, and Unstoppable Wallet. And while these wallets are very user friendly, they often interact with the internet, whether via exchanges or even random links you may click.

A wallet that interacts with the internet is called a hot wallet. Keeping your assets in a hot wallet can be risky since you’re not the only one who interacts with it.

So how do you keep yourself safe? At the end of the day, the safest way to store your digital assets is in a cold wallet. A cold wallet or a hardware wallet refers to a physical device that doesn’t touch the internet regularly. It usually needs to be plugged in and requires a manually entered PIN. It can then be disconnected, making it safe from attacks.

A cold wallet is an added layer of protection for your assets, and it’s one that can absolutely make the difference in keeping your Crypto safe.

Ultimately, where you keep your money is a deeply personal matter, but we hope this section lends you a little more clarity on what it is that puts your Crypto assets at risk.

One last note to end on: for as long as there have been assets of value, there have been people trying to steal that value. There were bank robbers and jewel thieves, then identity stealers, and now phishers and hackers.

In fact, according to reports, Cybercrime cost the global economy $6 Trillion last year alone. So while DeFi sorts out its own issues, don’t forget that Traditional Finance still has a long long way to go too.

Meme of the Day

What a week of learning it's been!

The Last Sip

We tried something a little different with the deep-dive section today, so what did you think? Are you a fan of more educational topics like this? Or do you prefer a more headline oriented deep-dive? Reply to this email to let us know!

Stay caffeinated! We’ll see you Monday,

Coffee & Crypto Team

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.