‘We Cannot Depend on Centralized Platforms’


The “Wolf of All Streets” Scott Melker has been unable to do anything more on Twitter than read or retweet more than 24 hours after the massive hack on verified accounts.

In a livestreamed interview with Cointelegraph on July 15, the crypto trader said in the midst of the attack he had been unable to verify his account using two-factor authentication. Melker then briefly had full access to read, retweet and post for roughly an hour before having his account restricted following the interview.

Twitter Support reported that the platform had “locked accounts that were compromised” and would restore access as needed. As of press time, major verified accounts including those of Joe Biden and crypto exchange Binance were back online, but Melker’s and others are still restricted from posting.

Dangers of centralization

The recent Twitter hack which resulted in the platform restricting all verified accounts from posting for hours highlights the dangers of becoming dependent on one platform. Melker said anyone who relies on a centralized service is at risk of having it taken away in an instant.

“We cannot depend on centralized platforms, no matter how good their intentions are,” Melker said in his newsletter. “These are single points of failure that you do not control.”

The crypto trader said the same circumstances apply to “being your own bank,” i.e. storing private keys in a different safe, and not holding all of one’s assets on a centralized exchange.

As if the universe wanted his point to sink in, YouTube — a centralized platform if ever there was one — pulled the plug on the Cointelegraph livestream shortly after he spoke, saying the content violated its terms of service.

“Weakest hack attempt ever”

The hacked Twitter accounts posted messages attempting to scam millions of followers into sending Bitcoin (BTC) or cash, promising a 2:1 return. Melker said this was a rather weak attempt given the serious nature of the breach. 

“They could have literally started a world war, and they’re trying an old scam that’s probably failed every time it’s been tried in history,” he said. 

What happens to Bitcoin

The crypto trader considers the hack a “Twitter problem” and not a “Bitcoin problem,” saying the market would have already seen a “super knee-jerk reaction” to the BTC price fairly quickly. Bitcoin did drop 1.4% several hours after the initial hack from $9,191 to $9,058, but had no noticeable surge or downturn as the attack was underway. 

One possible fallout, according to Melker, would be a greater chance of the general public associating Bitcoin with scams. 

“It’s just another hurdle to overcome when you’re trying to explain to someone why Bitcoin should be taken seriously,” the crypto trader said.

Twitter going down?

Twitter stock fell from $35.60 to $34.70, a decrease of 2.5% in just 15 minutes during after-hours trading. 

“Imagine having the most powerful people and companies in the world all angry at you at once,” Melker said in one of his last tweets on July 15 before access to his account was restricted. 

He told Cointelegraph the company would likely be “sued into oblivion” by those affected, but most users would “forget about this in a week.”