Did the global IT outage affect crypto?

While the facts of this global IT disruption are still being determined, one thing is certain: centralization can have serious consequences.

On June 19, the world was rocked by a widespread and unprecedented outage, with countless Windows computers rendered unusable by the dreaded “blue screen of death.”

The outage was widespread, with businesses and consumers in India, Germany, Australia, Spain, the UK and the US among those affected.

Something very strange is happening right now: I’ve been contacted by several completely different media outlets in the last few minutes, all of whom were suddenly giving BSoDs (Blue Screen of Death) on their Windows machines. Is anyone else seeing this? It appears to be going into recovery mode: picture.twitter.com/DxdLyA9BLA

— Troy Hunt (@troyhunt) July 19, 2024

Flights were cancelled, supermarkets could not accept cash, television news channels were taken off the air and even some hospitals declared critical cases.

In six US states, 112 emergency helplines were down, banking sites were out of service, and governments had to set up emergency teams to deal with the negativity.

At this stage, it does not appear that this baffling bug, which has brought down many digital services that we all take for granted, was caused by a malicious cyberattack.

Instead, it appears that everything is down to a software update from an IT security firm called CrowdStrike, which aims to prevent breaches and attacks.

Microsoft quickly claimed it wasn’t its fault, and when the markets opened on Wall Street, CrowdStrike’s share price fell 15%, wiping $12.5 billion off the company’s value.

But there are a few people who feel quite pleased that they haven’t been caught up in the chaos: Mac and Linux users, foremost among them, can continue to work as normal.

It’s also noteworthy that crypto companies were not affected. While the facts of this outage are still being determined, one thing is clear: centralization can have serious consequences.

The fact that so many critical pieces of infrastructure depend on the same software makes it painfully obvious what can happen when one small thing stops working as it normally does.

In contrast, blockchains are decentralized, meaning there is no single point of failure and blocks can be verified by miners and validators as usual.

We are slowly seeing a small number of businesses start to adopt blockchain technologies and after today’s fiasco, it seems likely that this number will increase.

The crypto community’s response was swift and harsh, with X CEO Elon Musk leading the charge, describing it as “the biggest IT failure ever.”

.@BIS_orgI hope you are paying attention to the global impact @Microsoft outage. Private, centralized systems have these vulnerabilities. Public, decentralized systems are designed to be more resilient. Your capital rules for crypto encourage the former. This…

— Christopher Perkins 🚀NYC (@perkinscr97) July 19, 2024

Despite global outages, crypto is still producing blocks.

Maybe there’s some truth to this decentralization thing, huh?

— gmoney.9dcc.e τh (@gmoneyNFT) July 19, 2024

London Stock Exchange down but pump dot fun on the rise

Do you understand?

— pompa.fun (@pumpdotfun) July 19, 2024

And inevitably there was a surge in activity surrounding memecoins as well; this catastrophic failure led to the creation of a number of new tokens.

So what were these called, we hear you ask? CrowdStrike and bluescreenofdeath.

Will lessons be learned?

It’s fair to say that this is the biggest outage since at least the WannaCry ransomware attack in 2017, when it affected more than 300,000 computers.

But for many customers with legacy bank accounts, such outages and technical issues are occurring with alarming frequency.

Banking apps and websites have been known to crash with sudden notifications, often coinciding with payday, leaving countless consumers unable to pay their bills.

Bitcoin, in contrast, has managed to achieve 100% uptime over the last 11 years, with only two minor outages reported since its launch in 2009.

The biggest concern now is that this is an outage that won’t be fixed anytime soon. CrowdStrike acknowledges that efforts to fix the problem will take “some time.”

Computers that get the dreaded blue screen error may need to be repaired by experts. According to Microsoft, one surreal solution that could fix the problem is to restart the computers 15 times.

In the meantime, there will be a lasting consequence for businesses. Some workers have not received their salaries on time and the impact on the aviation industry with passengers delayed and planes in the wrong place could take days to resolve.

This is particularly frustrating for UK travellers, and why? It all comes at a time when it’s expected to be the busiest day of the year for air travel, with summer holidays starting for schoolchildren.

There is little doubt that governments and large companies are hoping to learn from this disruption and want to make sure they have contingency plans in place should something similar happen again.

Considering that we live in an increasingly digital and interconnected world, it is no longer a matter of “if” but rather “when”.