When people say that criminals make money the easy way, most of the time it is not true. Yeah, if you are talking about a robber going to a corner store to steal $300 then you might be right. But even then they still have to worry about getting caught. For most criminals, if the crime is complicated and it involves a lot money, then there is a good chance that they have to worry about a numerous amount of variables. So much so that it might have been easier just to get a normal 9 to 5 job.
One of these variables that criminals have to worry about is how are they going to get paid for their criminal services. While sometimes they are able to get away with using legal means to transfer money back and forth, most of the time when they do that they leave a paper trail and that allows law enforcement to be able to follow the money until it reaches them. So if they want to be able to stop that from happening they have to find an alternative means to transfer the money back and forth. In the past couple of years, criminal black hat hackers have found an alternative to be able to do this. They started to use a technology that is called Bitcoin.
What is a Bitcoin?
So before I go any further with talk about how criminals use this technology I should probably talk about what the technology is for people who have never heard of it. Even though the term Bitcoin has been around for at least the past two years, even to this day most people still do not know what it is. Bitcoin is a technology that acts like the internet version of currency. Usually when you pay for something on the internet it is backed by real dollars that is in your bank. You do this by use of a credit card or a debit card. A couple of years ago some people had the idea that they would create their own virtual currency. It would be one that was not controlled by any one entity. Instead the system would validate a purchase and the trading of the currency through the use of peer to peer technology. And so far it seems to be working.
Most of the time when people talk about this technology you will hear that it is supposed to keep you anonymous. While that is true for the most part, it only works that way until a certain point. You are not completely anonymous and if someone with the right technical skills is really looking for you then they will find you. But the promise of the anonymity of the technology really has caught on with some of the criminals of the web. They like the idea that the transactions that they made, if not totally anonymous, are at the very least hard to track. So a lot of them have started to use the technology amongst themselves and they are able to cash out back to their home country currency at a later date.
Now most people would call this a form of money laundering. And possiblty it is. But right now Bitcoin is not a big enough technology that any government officials have come looking (that I’m aware of).
How do they cash out?
While you can easily see how the Bitcoin technology can be used to transfer money back and forth from one person to another, it might be hard to see how anyone uses the technology to actually purchase an item. Most stores and companies do not accept Bitcoin as a payment alternative so how can you use it to purchase anything. Most people do this by the use of online Bitcoin exchanges. Bitcoin exchanges allow you to both buy and sell Bitcoins with USD (United States) backed currency. The price is created by market demand and is always changing all of the time. So now the online criminals have a way to get their money out of the system.
You have to remember, even though there might be more of a criminal presence on the Bitcoin technology now than when it first began, it does not mean that the technology itself is bad. For the most part, far more people use the technology for good then they do for bad. And that is by a wide margin. It is just lately some people are starting to notice that there are more bad guys on the system than there ever has been before. Bitcoin is a very innovative technology and somehow criminals always find their way onto the newest technology. I for one hope Bitcoin finds a way to deal with this issue and continues for many years to come.
Further related(ish) reading
As I was writing this yesterday I came across a post from PCMAG about how F-Secure had discovered a Bitcoin miner on Twitter.