– Bitcoin is a digital currency that can be traded for real cash
– It is very hard to track and largely anonymous
– The value of Bitcoins fluctuates a lot, but has risen quickly over time
If you’ve been paying any attention to technology news in recent times, you’ve heard about the WannaCry ransomware. The Wanna Cry cyber attacks were one of the biggest attacks of this sort, affecting computers in countries around the world; in India, CERT-in issued a red alert about the cyber attacks, and reports have been pouring in about ransomware attacks in India. In this ransomware attack, the Wanna Cry virus affects you computer, spreads, and then encrypts all of your data, locking you out of your own system. If you pay up quickly, you’ll get your data back, but otherwise, it’s all gone for good. The hackers behind these cyber attacks have reportedly demanded $300 worth of Bitcoin – approximately Rs. 19,000 as per current Bitcoin price – to unlock each system.
So what is Bitcoin, and why do ransomware attackers, hackers, and other malicious users, prefer to receive payments for their ‘work’ in this digital currency? Let’s take a look.
What is Bitcoin?
Bitcoin is a digital currency that’s based on a concept in technology called the blockchain ledger. There’s no central bank that issues these ‘coins’, but they are matched against a public ledger to identify who currently owns a ‘Bitcoin’. You can ‘mine’ Bitcoins, or buy them in the open market, though there’s no official rate of exchange or government oversight. Instead, a Bitcoin is worth whatever the market will accept.
And that’s led to a lot of fluctuation over time – one of the first real world transactions with Bitcoin was to buy a pizza, for 10,000 BTC. Today, that’s worth millions.
On localbitcoins, which is a site that helps you to find sellers nearby, the value for Bitcoins near Bengaluru today puts them at around Rs. 1.2 lakh per Bitcoin. In the US, the price is listed as around $1,750.
Why are Bitcoins popular among hackers?
Bitcoins are not actual physical coins – they’re just lines of code. They’re digitally signed from one owner to the next, but they’re not regulated by any government and are largely anonymous.
For this reason, Bitcoins are quite popular among hackers, and also others who are using them for criminal payments. They’re also fairly easy to use at this point. You need a few basic computer smarts, but beyond that, because of how well established Bitcoin is today, there are loads of tools available that anyone can use, even from their phones – so victims of ransomware attacks don’t need to be very tech-savvy.
So is Bitcoin transfer impossible to trace?
Yes and no. Bitcoin is certainly harder to trace than a credit card payment, but at the same time, the public nature of the Bitcoin ledger means that you can see the payments themselves. Now, you don’t necessarily know who owns the wallet, and people can “wash” the coins to throw off tracking using services called “tumblers”, that basically make a lot of trades back and forth, with Bitcoins from lots of different sources.
This means that it becomes harder to track the movement of the coins, and see where the ransom payments are going after a point. But law enforcement agencies have also gotten better at tracking these movements, and could well be closing in on the hackers using the Bitcoin public ledger.
What we do know, according to news reports, is that despite the huge number of machines affected, across so many different geographies, so far, the amount of ransom paid seems to have been just $50,000 – less than 200 people at the $300 price, against an estimated 200,000 affected. Of course, if the hackers are able to avoid arrest and hold on to their Bitcoins, the value could well go up over time.