Bitcoin helps the ransomware business
They have all been hit by ransomware attacks over the past year.
Boaz Sobrado is a London-based data analyst and cryptocurrency enthusiast.
Ransomware attacks occur when hackers gain access to the victim's computer systems and threaten to expose them or render them unusable unless the victim pays a ransom. The attacks are becoming more and more professional. The victims are directed to a user support website where they can chat with the ransomware operators. Sometimes they see a clock ticking: if the ransom is not paid within 24 hours, the ransom amount will double.
The COVID-19 pandemic forced even reluctant companies to work remotely, which has been a boon for ransomware operators. The average ransom payment in Q2 2020 was over $ 178,000, up 60% from Q1 2020. The ransomware operators have also improved their methods. While attacks were largely spray-and-pray a few years ago, hackers now deliberately choose their targets and adjust the ransom amounts based on what they think those targets can pay. The ransom is often only part of the cost.
The emergence of Bitcoin facilitated a crime that was previously impossible. However, there is no reason why using bitcoin as a ransom should only be considered for online crime. When an American businessman was kidnapped in Costa Rica in 2018, his kidnappers asked for (and received) a ransom in Bitcoin. Known cases of Bitcoin hijacking are rare right now, but it is only a matter of time before the hijackers understand the fit of the product market. In fact, Bitcoin adoption is growing fastest in countries like Nigeria, where kidnappings have been labeled a “growth industry”.
Bitcoin ransom payments can enable new forms of real crime. In the past, Somali pirates risked their lives for a ransom payment that had to be dropped from a helicopter. In the future, pirates will simply be able to steer a remote-controlled ship loaded with explosives next to an oil tanker and tweet a picture with a Bitcoin address at the shipping company. Private jets flying from Davos may be served by autonomous aircraft that threaten to take a turn if the requirements are not met.
Bitcoin is highly liquid, censorship-resistant digital money. These properties make it attractive to criminals, but also to pro-democracy activists. The Human Rights Foundation advocated Bitcoin for its vital role in supporting protesters in Belarus, Hong Kong and Nigeria. Bitcoin is also accepted as an effective hedge against inflation and government seizure on Wall Street.
While people like US Representative Rashida Tlaib, JPMorgan's Jamie Dimon and outgoing President Donald Trump continue to criticize digital currencies, the pig is out of the bag. We live in a world where the effects of permissionless second order money are evident and there is no going back. Just ask the CEOs of Garmin, Travelex, Campari or Foxconn.