“We will lose lots of money in the lunacy of web3”

The world has been watching one of the most chaotic trainwrecks in recent memory as FTX continues to collapse, wiping billions of dollars off the trillion-dollar cryptocurrency industry. As we look on through the cracks in our fingers, it is just one example of how people around the world will lose money in the next generation of the internet - either through malicious or malignant activity from different actors/players.

Ira Winkler, the new Field CISO at Israeli cybersecurity company CYE, has joined CTech to discuss what the world of web3 might expect in the future. Described by Ethereum co-founder Gavin Wood as a “decentralized online ecosystem baked on blockchain”, it can refer to anything from crypto to the metaverse, NFTs, or anything else techies might develop in the future.

Ira Winkler CYE

“When I look at 2023, What I'm looking at is what are we seeing now and how can that evolve,” he said. “We will see more ransomware. We will see web3 hacks through basic and more creative ways happening. We will lose lots of money in the lunacy of web3 because crypto wallets will be compromised, and people will have their NFTs stolen as more people buy them. The criminals are gonna come after them.”

Last month Winkler joined the firm after a fateful meeting with Reuven Aronashvili, its founder and CEO, and an introduction to its platform Hyver. It offers business insights and optimizes the reduction of cyber exposure by analyzing contextual security data over the organizational risk profile. Winkler admits it’s the platform “he has been dreaming about for 25 years” although he could never predict the type of infrastructure on which it would one day be used.

Over his career, Winkler has seen the platforms that require cybersecurity evolve from floppy disks to text-based emails, to messages with attachments, and eventually graphics with embedded links. The challenge with cybersecurity is that all of these could contain viruses - so it makes sense that the newest form of internet interactions might suffer the same fate.

Much has been said about crypto and NFTs in the past two years. Anyone from Nike to Israeli viral couple Maya and Yehuda Devir have gotten in on the action, and yet they are already being called “a bubble gone bust” as their values continue to drop due to their apparent lack of use in the ‘real’ world. Cryptocurrencies on the blockchain might appear more attractive to most, but the sector is still reeling from the market collapse and enhanced risks associated with new and untested possibilities on web3. While it is almost impossible to duplicate things like Bitcoin, hackers can still steal them from the wallets of legitimate crypto exchanges.

“Stealing crypto is the perfect crime because there's nobody to report it to,” Winkler continued. “The benefits that people tout as why they want cryptocurrency benefits criminals more than the average person, so we’re going to see a lot more of that.”

On the other side of the web3 coin is the metaverse. The vision is led by Meta’s Mark Zuckerberg, whose misguided passion for the online world might have contributed to the company’s value plunging by $700 billion this year alone. Aside from the general public being somewhat apprehensive about the new iteration of our internet avatars, Winkler has highlighted the potential security risks of the new online infrastructure.

“The big security problem with the metaverse besides the crypto, besides the NFT theft, is really going to be identity,” Winkler predicted. “Identity is a major problem for a variety of reasons in the metaverse…They break into identities and people can take over identities and do a lot of harmful things.”

Metaverse security is posed to tackle challenges already seen on legacy social media companies like Facebook: individuals can commit identity fraud by opening up an account of someone else and exploiting people for money on false pretenses. However, the metaverse can take this to an entirely new phase since people can literally wear the skin of someone else. “It is possible to change state in the metaverse, so it is the same type of thing we've seen in the past, just moved to a different forum.”

History doesn’t repeat itself but it rhymes, so the saying goes. As more internet users grow more comfortable with web3 products and services, it is essential that safety is ensured to protect identities and assets. While the creases need ironing out, for now, it is clear cybersecurity companies have their work cut out for them.