Reflections on the $6.3 Billion Binance Theft: The True Ideals of the Cypherpunks and What AI Will Bring to the Crypto World
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Last week, I saw some big news on the internet: hackers had stolen $6.3 billion in cryptocurrency from Binance. It was the largest cryptocurrency theft in history.
I really don’t like the North Korean regime, especially its hackers. But I think CZ and Binance have enough money to cover the losses. Honestly, the news made me think about quite a few things.
I’ve known about cryptocurrency for a long time. The first company I worked for in mainland China sometimes accepted Bitcoin and other cryptocurrencies as payment for its services. But as everyone knows, the Chinese government contacted the company and told it to stop accepting cryptocurrency payments, after years chinese government restricted cryptocurrency businesses in china mainland.
Years passed. One day, I started learning more about Q-day. During my research, I came across a new word: cypherpunk. I became curious about what cypherpunks were, what cypherpunk culture was, and what the cypherpunk mailing list was all about.
Then I found an interesting timeline:
| Year | Person | Technology or Idea |
|---|---|---|
| 1980s | David Chaum | Anonymous electronic cash technology |
| 1989 | David Chaum | DigiCash |
| 1996 | Nick Szabo | Smart contracts |
| 1997 | Adam Back | Hashcash (Proof of Work) |
| 1998 | Wei Dai | b-money |
| Around 1998 | Nick Szabo | Bit Gold |
| 2004 | Hal Finney | RPOW (Reusable Proof of Work) |
| 2008 | Satoshi Nakamoto | Bitcoin |
And so on.
So many technologies that people call “new” today actually have a long history behind them.
Then I found some old writings from the cypherpunk community:
In the third article, I found this sentence:
“Transparent links and nodes are the norm in a police state, such as the U.S.S.R., Iraq, China, and so forth.”
That’s interesting. Even back in 1994, the writer already knew that China was a police state. Wow, that really shocked me.
After reading more about cypherpunks and their ideas, I began to feel that their thinking came from the confrontation of the Cold War: the Free World vs the Communist World.
When we look back at history, we can see that the cypherpunks grew up during the Cold War era.
During the Cold War, the communist world relied heavily on spies, secret police, and surveillance. There were communist spies all over the world, including in the United States. Intelligence operations and political control were deeply rooted in the communist system.(The communist tradition has long been defined by espionage and betrayal. Backed by 50 million German gold marks, Lenin returned to Russia to wipe out the Tsar’s entire family—sparing neither the young children nor their servants and cook. In this realm, the infamous ‘swallows’—female honey-trap operatives—became another signature export of communist tradecraft.)
The Free World had to fight against the Communist World. To win that fight, Western governments also developed powerful intelligence agencies, surveillance systems, and ways to intercept communications. In some ways, they learned some of the same bad habits as their opponents.
But there’s a very important difference.
The Free World still gave people room to do what they believed was right. Even when people disagreed with their own governments, they could speak out, organize, and resist. In the communist world, governments monitored everyone and didn’t allow people to resist. If they discovered resistance movements or organizations, they could imprison or even kill the people involved.
But in the Free World, even if you resisted the government, you still had space to do so.
As the saying goes, “Where there is power, there is resistance.”
When the Free World began adopting some of the surveillance methods of the Communist World, resistance grew from within the Free World itself. And I think the cypherpunks were part of that resistance.
They didn’t believe that governments and big companies would protect their freedom simply out of kindness. They wanted to build technology that could protect freedom and privacy without depending on the goodwill of those in power.
Many cypherpunks were influenced by libertarianism, and from their writings, we can see deep opposition to authoritarianism and totalitarianism was a central part of their ideals.
And here’s something I find ridiculous.
The cypherpunks came from the Free World. They hated authoritarianism and totalitarianism, yet they wrote code to challenge the governments of the Free World itself. They didn’t blindly trust their own governments just because those governments claimed to stand for freedom.
But look at what happened in the real world. The cryptocurrency industry has grown enormously in the Free World, while governments in the communist world are afraid of cryptocurrency and place severe restrictions on it.
And here’s the irony: the cypherpunks challenged the governments of the Free World, but their technology ended up becoming a much bigger threat to authoritarian and totalitarian regimes, including communist ones. Isn’t that funny?
I still remember that my first company used to accept Bitcoin, until the Chinese government told it to stop. One of my coworkers once sold some cryptocurrency and exchanged it for Chinese yuan, and his bank account was frozen.
So when I read about cypherpunk history, I keep finding connections to the Cold War and the struggle between freedom and government control. I think that history helps explain why the Chinese government banned so many cryptocurrency activities.
North Korea is another interesting example. Its government tightly controls financial activity at home, while North Korean hackers have become notorious for stealing cryptocurrency abroad. Apparently, cryptocurrency is unacceptable for North Korean’s ordinary people, but very useful for hackers working for the government.
What a ridiculous situation.
The more I learned about cypherpunks, the more I understood their ideals. I think the struggle for personal freedom and privacy is one of the most important parts of their thinking.
And decentralization is an important way to achieve those goals.
Decentralization is a means, not an end.
Why Did Centralized Cryptocurrency Exchanges Become So Big?
But in the real world, centralized cryptocurrency exchanges became some of the biggest companies in the crypto industry. Binance is one example.
I’ve seen people joke about this contradiction: cryptocurrency is supposed to be decentralized, but people keep their money in centralized exchanges. They say they don’t trust centralized institutions, but then they trust another centralized company with their assets.
After reading and thinking about cypherpunk history, I began to believe that we’re simply living through a transitional stage.
And the reason is easy to understand.
How many people in the world own cryptocurrency? And how many of them actually understand blockchain technology, digital money, and how to use cryptocurrency directly from their own computers or phones?
How many wealthy countries have completely open gambling markets? How many countries allow people to freely exchange their money for foreign currencies? How many people want to buy or sell something without others knowing about it? And how many people simply want to protect their privacy?
And yes, how many people want to launder money or carry out transactions that governments don’t allow?
These are different kinds of activities, of course. Some are ordinary financial needs, some are restricted, and some are illegal. But they all help explain why people might look for financial services outside the traditional system.I also remember the cypherpunks pointing out that laws are different from country to country. Something allowed in one country might be forbidden in another.
I think cryptocurrency exchanges became successful partly because they met needs that traditional financial systems didn’t fully satisfy. Gambling, speculation, currency exchange, cross-border transfers, privacy, and even money laundering all created demand for cryptocurrency.
But there was another very important reason: centralized exchanges made cryptocurrency easy for ordinary people to use.
Most people don’t want to learn how blockchains work. They don’t want to manage private keys, understand different networks, or learn complicated software just to buy or sell something. They want to open an account and get things done.
Centralized exchanges solved that problem, and they made a lot of money doing it.
Now imagine a different world. Imagine that countries allowed people to gamble freely, exchange currencies freely, and move their own money without unnecessary restrictions. Imagine that governments and big companies didn’t constantly collect personal information, monitor communications, or interfere with private financial activities.
In that world, would centralized cryptocurrency exchanges have become as big as they are today?
I don’t think so. If people could already satisfy those needs through ordinary financial services, why would so many of them need cryptocurrency exchanges?
Of course, centralized exchanges would still have customers. They make trading convenient and bring buyers and sellers together. But I believe their room for growth would be much smaller than it has been in our world.
And centralization has some obvious disadvantages.
Centralized exchanges require KYC, and users may face account restrictions, withdrawal delays, or other limitations. More importantly, they concentrate enormous amounts of cryptocurrency under the control of a single organization.
That’s a very attractive target for hackers.
Look at the recent Binance theft. When one company controls billions of dollars in cryptocurrency, hackers have an enormous reason to attack it. Some of those hackers may have access to huge amounts of money, technical expertise, and even state support.
Think about it from a hacker’s point of view. If you had the ability to organize a sophisticated attack, would you rather spend months or years trying to steal a few thousand dollars from an ordinary person, or attack a company that controls billions?
The amount of money concentrated in one place determines how much effort an attacker is willing to invest.
Now imagine that centralized cryptocurrency exchanges didn’t exist. Everyone kept their cryptocurrency in their own wallets, spread across millions of personal computers, phones, and other devices.
Would hackers still attack people? Of course. But each wallet would usually contain much less money than a major exchange, so the incentive to spend enormous resources attacking one particular wallet would be much smaller.
And this brings me to AI.
AI Might Change the Crypto Industry Again
We’re already living in the AI age, and I believe some major changes are coming.
Earlier this year, I read some comments from CZ about AI and cryptocurrency. He said that AI agents would find it easier to use cryptocurrency because they couldn’t easily use traditional financial systems with KYC requirements.
I understand that argument, but I don’t completely agree.
Why couldn’t AI agents have their own identities in the future? Why couldn’t they own property or manage money through some kind of recognized identity? We don’t know how future laws and financial systems will work.
Here’s another interesting thought.
We assume that tokens are like blood for an AI agent. The agent works and earns money, then uses that money to pay for its computing power, memory, storage, and other expenses. If it earns enough money, it can keep running, upgrade its own capabilities, and continue working.
If an AI can earn enough money to support itself, maintain itself, and improve itself, what exactly would separate it from a human being in economic terms?
That’s a much bigger question, and maybe I’ll write about it another day.
For now, I believe AI agents will find it easier to use cryptocurrency before they can independently use traditional money.
But there’s something I think CZ’s argument misses.
Just because AI agents can use cryptocurrency doesn’t mean they’ll use centralized cryptocurrency exchanges.
They might use Binance. They might use a DEX. They might trade directly on a blockchain, use Hyperliquid, or use some new trading system that doesn’t even exist today.
Why should we assume that AI will choose CEXs?
In fact, I believe DEXs, Hyperliquid and other forms of direct blockchain trading will grow faster than CEXs in the AI age.
I’m not saying CEXs will stop growing. I believe more people will use cryptocurrency in the future, so both CEXs and DEXs can grow. My point is that DEXs may capture a larger share of that growth.
Let me explain why.
Earlier, I mentioned that one of the biggest reasons people use centralized exchanges is convenience. Ordinary people don’t want to understand all the technical details of cryptocurrency.
But what happens when people have AI agents that can understand those details for them?
At the moment, in 2026, many personal computers and mobile devices still don’t have enough computing power to run the most capable AI models locally, This is often called edge AI or on-device AI. But look at how technology has developed over the years.
Hardware will become more powerful. AI models will improve. Local and cloud storage will become larger and cheaper. Network speeds will increase. And software will become easier to use.
I believe personal AI agents will become much more capable as these technologies improve.
Imagine having a capable AI agent running on your own computer. It could use your local computing power, access local or cloud memory, and work with software installed on your device. You could keep your own hot wallet or cold wallet, and use fingerprints, facial recognition, or other methods to authorize important actions.
I also believe cryptocurrency projects will start providing tools designed specifically for AI agents. They might offer Agent Skills, workflows, APIs, local wallet software, or combinations of local and cloud services.
Different cryptocurrencies could have their own specialized tools, and your personal AI agent could find and use those tools when needed.
You wouldn’t have to learn how every blockchain works. Your agent would do much of that work for you.
Imagine this.
You’re walking down the street, wearing a smartwatch. You tell your agent, “I want to exchange some Bitcoin for USDC. Find me a good price.”
Your agent searches the available markets and finds a way to trade. Maybe it uses a DEX, maybe it finds another person willing to exchange assets, or maybe it uses a blockchain protocol that allows two people to trade without trusting each other.
It could even use a trading method that hasn’t been invented yet.
Then your agent prepares the transaction. You check the details, confirm with your fingerprint or another secure method, and the trade is completed.
You didn’t need to remember a wallet address, open several websites, or learn how different blockchain protocols work. You didn’t even need to use a centralized exchange.
You just told your own agent what you wanted to do.
And because you control your own wallet and software, you could also have more control over your financial privacy and identity. Your agent could help you use different tools without giving every service unnecessary access to your personal information.
This is why I believe AI could bring us into a new stage of Web3. More people will use cryptocurrency, and AI agents themselves may become important users of cryptocurrency too.
But I don’t believe all that growth will go to centralized exchanges. I expect decentralized exchanges and direct blockchain trading to grow faster.
AI could make the original ideals of the cypherpunks much easier for ordinary people to enjoy.
Think about it. The cypherpunks wanted people to have more freedom and privacy in the digital world. They wanted individuals to communicate, exchange information, and use digital money without depending entirely on governments or large companies.
And that’s why I keep saying that decentralization is a means, not an end. Blockchain is also a means, not an end.
The goal is freedom, privacy, and giving individuals more control over their own digital lives.
Every generation builds on the work of the people who came before it. The cypherpunks developed ideas and technologies that helped make Bitcoin possible. Later generations built cryptocurrencies, wallets, exchanges, and other applications.
And now AI might help bring those ideas to many more people.
I think that’s a very interesting future.
Hackers Might Return to the Old PC Era
There’s another part of this future that I find interesting: security.
Today, large centralized exchanges are attractive targets because they control enormous amounts of cryptocurrency. Hackers may spend months planning an attack because a successful operation could bring them billions of dollars.
But if more people start managing their own cryptocurrency through personal AI agents and local wallets, the money will become more widely distributed.
A single personal wallet might contain much less money than a large exchange, so the incentive for expensive, highly targeted attacks could decrease.
Hackers won’t simply disappear. They’ll probably change their methods.
Instead of attacking one company that controls billions of dollars, hackers might try to compromise software used by millions of people. They could attack popular wallet applications, distribute malicious Agent Skills, or find vulnerabilities in software that many personal AI agents depend on.
One successful attack could affect a huge number of users.
Doesn’t that sound familiar?
It reminds me of the old PC era, when computer viruses spread through personal computers, malicious downloads, and software vulnerabilities.
In the future, hackers might once again focus on attacking large numbers of individual computers and devices, except this time those devices could contain AI agents that manage money.
Of course, there would also be some important differences. If people use different wallets, different software, and separate private keys, a hacker who compromises one system might not be able to steal everything.
That diversity could make certain attacks much harder. But widely used software could also become a new target.
So the battle between hackers and security engineers would continue, just in a different form.
And that’s what I find so interesting about the whole story.
The cypherpunks wanted to give individuals more control over their digital lives. Then centralized cryptocurrency exchanges became huge because they made cryptocurrency easier to use. Now AI agents might make it easier for individuals to manage their own cryptocurrency again.
At the same time, hackers might move from attacking huge centralized financial systems to attacking software running on personal computers, just as they did decades ago.
In one sense, we’re moving into a completely new future. In another, we’re returning to problems we’ve already faced before.
That’s how human history often feels to me. In one sense, we’re moving forward into the future; in another, we’re moving backward.
P.S. The New Cold War
There’s also something from my university days that came back to me while reading about cryptography and Cold War.
I once developed a game that needed random numbers, But I was never satisfied with the random number generators I was using. I asked some people for advice and learned about techniques for generating randomness that had been studied in cryptography, including during the Cold War.
Eventually, I tried something unusual: dropping a needle onto different surfaces, recording the sounds it made, and using those recordings as a source of randomness.
I didn’t know much about cypherpunks at the time. Looking back, I find it interesting that I had already encountered one of the technical problems cryptographers had been thinking about for decades.
And Now, We are in a New Cold war
