On Friday 12th May an unprecedented malware attack swept across over 200,000 computer systems in 150 countries. Organisations such as the NHS, FEDEX, MegaFon and Telefonica were severely impacted. Once the WannaCry worm accessed systems, data became encrypted and a message was displayed demanding payment of USD 300 within in 3 days or USD 600 within 7 days for an encryption key.
Luckily this has not impacted me so far (other than the slight inconvenience of having to run to a cash machine to withdraw cash given QPark’s payment systems had been downed by the virus), however the speed and impact of this virus certainly raises some big questions about our vulnerability to such an attack.
The full range of implications are far too voluminous for this short article to address, so I want to focus on an issue that has not been discussed as much, namely WannaCry’s impact on Bitcoin and its reputation.
Lets start out by recapping what a crypto currency is. Blockgeeks state: “If you take away all the noise around cryptocurrencies and reduce it to a simple definition, you find it to be just limited entries in a database no one can change without fulfilling specific conditions” (https://blockgeeks.com/guides/what-is-cryptocurrency/)
Quite simply a crypto currency is a virtual / digital (ie non physical) medium of exchange that encrypts each unit (converts information into an uncrackable code using an algorithm) to regulate the creation of new units and to authenticate each transaction in a public ledger such as Blockchain.
Bitcoin is the largest digital currency in terms of market capitalisation acceptance and volume, noting that the 16th May 2017 marked the first time ever that Bitcoin’s market capitalisation as a percentage of all digital currencies fell below 50%, signalling the emergence of several new digital currencies.
According to bitcoin.org, “Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.” (Bitcoin, 2017)
In summary cryptocurrencies are anonymous, decentralised, not regulated by any authority and also almost impossible to counterfeit given that each coin is encrypted.
This all sounds great, especially the anonymity Bitcoin provides its users. But this makes it an ideal currency for hackers, such as those who wrote the WannaCry virus, to demand payment in!
Given the impact of WannaCry, the reputation of Bitcoin as an alternative currency has certainly taken a hit and hopes of Bitcoin moving into the mainstream will certainly be tainted through its association with crime. That said the UK Digital Association points out that only 1% of bitcoin transactions take place on the Darkweb so evidently Bitcoin is mainly being used for legitimate transactions.
One significant advantage of bitcoin is that it provides transparency of transactions, so much so that you can view the Bitcoin wallets that receive the WannaCry ransom proceeds, as demonstrated by the links below:
Blockchain Luxembourg (2017) Bitcoin Address, available at: https://blockchain.info/address/12t9YDPgwueZ9NyMgw519p7AA8isjr6SMw [Accessed on: 16th May 2017]
Blockchain Luxembourg (2017) Bitcoin Address, available at: https://blockchain.info/address/13AM4VW2dhxYgXeQepoHkHSQuy6NgaEb94 [Accessed on: 16th May 2017]
Blockchain Luxembourg (2017) Bitcoin Address, available at: https://blockchain.info/address/115p7UMMngoj1pMvkpHijcRdfJNXj6LrLn [Accessed on: 16th May 2017]
Given the number of computers that have been infected, the hackers may well be disappointed in their haul (it is certainly not in the same league as the pirate Samuel Bellamy who raked in USD 120m equivalent), also noting that many who have paid the ransom have still not had their files reinstated.
Perhaps as a boost to the Bitcoin price, the Guardian highlighted that many banks are stockpiling Bitcoins so they have the ability to pay off any ransom demands from cyber criminals. (Doward J, 2016)
Will regulators and central banks willingly reduce their control on the circulation of money? I doubt it but market forces are certainly speaking up on the use of Bitcoin. This can be seen through the vast number of companies that now accept Bitcoin as payment for goods and services. One such company is Microsoft, who over the last few days have been the centre of focus given the vulnerability of their old unsupported operating systems that were targeted by the WannaCry virus. Microsoft permit users to pay for games, apps and other content in Bitcoins. (Microsoft, no date)
Despite some of the negative reputational connotations associated with Bitcoin, it is here to stay and it might not be long before I’ll be paying my parking using my bitcoin wallet rather than having to run half a mile to get £10 out of a cash machine! If it is not Bitcoin, the growing number of cryptocurrencies such as Ripple, Ethereum, Litecoin and the hotly anticipated Tezos will step in.
Bitcoin (2017) bitcoin, available at: https://bitcoin.org/en/ [Accessed on: 16th May 2017]
Doward J, 2016, City banks plan to hoard bitcoins to help them pay cyber ransoms, The Guardian, 22nd October, available at: https://www.theguardian.com/technology/2016/oct/22/city-banks-plan-to-hoard-bitcoins-to-help-them-pay-cyber-ransoms [Accessed on: 16th May 2017]
Microsoft (no date) Adding money to your Microsoft account with Bitcoin, available at: https://commerce.microsoft.com/PaymentHub/Help/Right?helppagename=CSV_BitcoinHowTo.htm [Accessed on: 16th May 2017]
Petulla S, (2017) Ransomware Attack: This is the Total Paid and How the Virus Spread, NBC News, 15th May, available at: http://www.nbcnews.com/tech/security/total-paid-malware-ransom-how-exploit-spread-n759531 [Accessed on: 16th May 2017]
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