Why cyber-attackers are using Bitcoin

The Bitcoin network is responsible for up to 300,000 daily transactions and 16 million bitcoins valued at roughly $17B. A recent wave of high-profile cyber-attacks has swept the globe and with it attention to the security of Bitcoin. Is the cryptocurrency the new target for hackers?

Last week, the Bitcoin cryptocurrency exchange Bithumb, one of the top five in the world, reported a major cyber-attack affecting 30,000 customer accounts. The hackers used a phishing email to steal the customers’ data and money. This happened only a week after the massive ransomware attack Petya rapidly spread through networks around the world, demanding a Bitcoin ransomware of 300$ per user to retrieve the files that had been previously encrypted.

While ransomware attacks were already happening before the invention of the Bitcoin cryptocurrency in 2009, these recent attacks have raised the question of how secure is the Bitcoin currency, and whether it has become the new target for cyber-attackers.

Bitcoin offers two major advantages for hackers: it is has a high level of protection of the identity of the user, and it can be used easily on a global scale. Usually, when you pay for something on the Internet, you use a credit or debit card. That card contains information about you, such as your name and billing address. Unlike with a credit card, the transactions you make with Bitcoin have a high-level protection of the identity of the user. Instead, whenever you trade in bitcoin, you use a "private key" associated with your wallet to generate an address that is then publicly associated with your transaction, but with no personal identifying information.

Bitcoin

However, the potential for Bitcoin to enable ever bigger cybercrime is hard to assess, especially if we look at the recent massive cyber-attacks Petya and WannaCry. In the case of the latter, despite affecting more than 400,000 computers around the world, the ransom payments showed a total of only $50,000.

Moreover, the Bitcoin network is not anonymous. It is possible to see the movement of the ransom payments thanks to the public nature of the bitcoin currency. All transfers are recorded on the public blockchain and can be viewed by anyone. That makes spending the bitcoins or cashing out of them into another currency without getting caught a tricky task, especially when you've already attracted widespread global attention, as it was the case with Petya and WannaCry.

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