Ransomware, Bitcoin, and Cyber Crime have merged into a perfect virus. Modern day cyber criminals employ a new twist on a centuries-old crime. Rather than kidnapping and holding an individual for a ransom, hackers used a bitcoin ransomware attack to hold computer systems hostage and demanding payment in cryptocurrency.
WannaCry, the world’s first ransom worm, seems to be the most vicious and pervasive cyber attack to date. WannaCry’s ransomware has attacked businesses, governments, and healthcare systems in at least 150 countries so far. This global threat is introduced into system servers through at least three avenues: The Remote Desktop Protocol, a Microsoft Windows vulnerability, or a phishing email. Once in, the virus holds data files hostage until the victim pays a $300 to $600 ransom. Even the method of payment has been modernized; Bitcoin is the currency of choice.
But Why Bitcoin?
Bitcoin is a digital currency conceptualized by the software developer Satoshi Nakamoto (a pseudonym). A network of computer users create bitcoins which are open to anyone. The software employs a complicated mathematical formula to generate Bitcoins. This network allows users to compete against each other to create Bitcoins currency, making generation challenging and thus keeping the value up. The Bitcoins then reside within this distributed system. In this ideal platform, Bitcoins provide significant advantages to the cyber thief — it is fast and anonymous.
All transactions are recorded and stored in the network. Even though the transactions are transparent to anyone, the individuals making those transactions are completely anonymous. This anonymity is what makes bitcoin the most favored currency for cyber criminals.
How Does Bitcoin Play Into Ransomware and Cyber Crime?
According to economists, seven common aspects characterize real money. These aspects include durability, portability, acceptability, limited supply, divisibility, uniformity, and fungibility. The rules and methods governing the creation and documentation of Bitcoin accomplish at least four of these seven characteristics.
Bitcoins provide significant advantages to the cyber thief —it is fast and anonymous.
Governing rules allow only 21 million bitcoins to ever be mined. The finite number of Bitcoins and difficulty in mining accomplishes the characteristic of limited supply. Portability is then satisfied through the digital transactions, which are completely transparent.
Bitcoin Acceptability & Durability
Durability means that whatever form the money takes, whether physical or digital, the currency is easily replaceable should it become damaged. However, durability is a moot point if the internet remains viable. Perhaps a more important question of the viability of Bitcoins as an exchange medium lies in its acceptability. Acceptability means just that—the monetary form in question is commonly accepted as a medium of value exchange. To be acceptable, users must trust that the medium will hold its value and continue to be accepted by other users.
Bitcoin is becoming increasingly acceptable. Microsoft, Dish Network, and Expedia are among the growing list of companies accepting Bitcoin as a means of payment. Bitcoin value recently reached record highs with a $32 billion market cap, as Japan joined the list of countries allowing retailers to accept Bitcoin as a legal currency. Acceptability also contributes to fungibility (interchangeability). Bitcoins can be purchased with and exchanged for other official currency, including the U.S. dollar and the Yen. Acceptable form of currency or not, the uncertainty of the ability to protect critical data is leading many businesses to stockpile Bitcoin in anticipation of ransomware attacks.