The popularity of bitcoin as a digital currency which relies on the person to person transfer, and does not rely on a central intermediary body like a bank, or some financial authority. Though this decentralized option makes bitcoin a revolutionary currency for the economy in the future, it also exposes it to hackers and other threats on the internet. As it is not secured by any government authority, hackers like to use bitcoin for the sake of anonymity it provides.
Usually, converting your fiat currency to bitcoin, selling it to someone, or receiving it does not need the involvement of a legal name or address. Hence, it is a criminal’s dream come true, from the point of view that you cannot trace these funds. As bitcoin lies outside the control of law-enforcement agencies in every country or government purview, the chances to launder money with bitcoin is enormous.
Bitcoins are worth $13,000 each at present, with smaller denominations available. They are stored in virtual wallets, using only a number. A recent Cambridge University study said around 6 million people on the globe have such bitcoin wallets, which they use to buy movie tickets or beer. Besides, they also use bitcoin to pay for illicit goods on the black market, like weapons and drugs. Using bitcoin as a currency is extremely easy as well.
Hence, for hackers to launch ransomware attacks is extremely convenient. Once, a criminal has distributed an automated ransomware toolkit, they can go on the darknet and wash these bitcoins and convert them into cash. The chances of these hackers being caught are nearly impossible. Ransomware profits are collected by hackers in bitcoins to protect their identities as well as their locations.
Normal people are shifting towards bitcoin for it is an unregulated market, has no fees or costs involved. Especially due to systems like Bitcoin Aussie System, who know how to use bitcoins properly, are able to take most out of this amazing digital currency.
In the absence of transaction costs, and taxes on the amount, it seems like a great opportunity for one and all. Though it seems very good on paper, it has its downsides. In absence of no protections or insurances like FDIC insurance, you lose a lot of money if your money gets ripped off or there’s an explosion in the bitcoin market. A bitcoin’s worth fluctuates on the basis of the market demand and supply.
The rapid rise in bitcoin’s value has given way to speculations, where many think it’s a bubble, as it might collapse in the imminent future. These speculations are made on the basis that several cryptocurrencies before this have appeared and disappeared. However, bitcoin is going strong since its inception in 2009.
Some ransomware attacks by hackers present to you as a simple message, and demand for money in digital currency. In such a case, it becomes very difficult for hackers to be traced. The WannaCry Ransomware attack that happened recently sent shock waves throughout the globe, as it attacked users from almost 150 countries. The concept of the attack was extremely simple. The files on your computer get encrypted via a virus, and it unlocks only when you pay a ransom.
The users were asked to pay a ransom of $300 in bitcoins. The ransom note also came with an additional warning that the ransom amount would double itself if it hasn’t been paid within the next three days. If the payment is not made even within the seventh day of the message, all the encrypted files would be automatically deleted. Besides, security experts say there’s no guarantee that you’ll get access on your files once you’ve paid your hacker. They might demand more money from you constantly.
Coming back to why bitcoin is a favorite for hackers, it is important to understand how bitcoin payments happen. When customers or users trade using bitcoin, a private key that is associated with their bitcoin wallet is utilized to generate a code. That code is publicly connected with the customer transaction. However, the point hackers exploit is the absence of any personal identifying information with the transaction. Though every transaction is written, recorded and securely signed on an open ledger, accessible to all, it protects identity.
Earlier, hackers used to ask for ransomware payments via PayPal. At present, due to the stringent Know Your Details (KYC) policy implemented in PayPal, hackers are shifting to bitcoin for their illicit activities. Following the WannaCry ransomware attack, the sentiment regarding Bitcoin had changed globally, which led to a drop in the Bitcoin value, further adding to losses for Bitcoin users.
The thing about WannaCry Ransomware was it had existed in systems of users for a very long time, without being detected. It also managed to create digital cash in the background. Whenever someone traded using bitcoin, a share of the portions was taken to the hacker without the knowledge of the bitcoin user.
Prioritize your safety, and be very specific about the bitcoin exchange platforms you use. Prevention is better than cure!