Bitcoin has become the currency of choice in the cyber-crime industry. It seems that cryptocurrencies are fuelling the ransomware pandemic. In 2020, companies paid more than $400m worth of Bitcoin in ransom to recover access to their data.
But what makes Bitcoin so attractive to criminals?
Summary:
- First, look at “real money”, the value of goods, and supply and demand. The value of an object in our real world is determined by its ascribed worth to a potential buyer. The author writes: “A Rembrandt portrait would be only so much firewood but for the greatly esteemed skills of the artist.”
- We rely on national currencies to pay for these objects, often called “fiat currencies”. These banknotes and coins have marginal inherent value (they are essentially worthless pieces of paper), but we believe they have value because governments issue them.
- Unlike fiat currencies, Bitcoin isn’t linked to a national economy because it does not rely on a centralised command and control structure. Bitcoins fluctuate heavily because their value is based exclusively on supply and demand.
- But what makes Bitcoin so attractive to cybercriminals?
- First, they allow near-untraceable financial transactions because they evade regulation and anti-money-laundry principles. Attackers can demand ransoms in Bitcoin without having to fear being detected and arrested based on monetary flows.
- Second, concealing monetary flows is staggeringly easy with the use of cryptocurrencies compared to traditional bank transfers.
Why does this matter for cybersecurity and businesses?
- In theory, all of this should not matter for businesses because they shouldn’t be able to transfer Bitcoin to get their data back. But it does matter because more and more businesses have to deal with ransom demands.
- Ideally, instead of figuring out how to pay a ransom in the case of an attack, organisations should proactively adopt strategies that prevent ransomware attacks or accelerate recovery when they do occur – without needing to make a payment.
