It is no secret that Bitcoin and other cryptocurrencies have played a huge role in cybercrime. We also believe that the opposite could also be true: cybercrime, including ransomware, has helped in boosting the cryptocurrency economy and increasing the value of Bitcoins.
Ransomware attacks have always been a problem beyond the shutdown of local services and state services. Emisoft, a cybersecurity company, also estimates that the value of bitcoin – used in 98% of all ransomware payments in the first quarter of 2019 – is reinforced by such attacks.
What is Ransomware?
Ransomware is a type of malware that encrypts a victim’s files. To regain access to the files, the victim must pay a ransom that can range from a few hundred dollars for home users to hundreds of thousands of dollars for large corporations and public entities.
The ransom is usually paid in cryptocurrency, and this cryptocurrency is usually bitcoin.
Bitcoin has become the preferred method of ransomware transaction for several reasons:
- Accessibility: You can easily buy bitcoins through an exchange with a debit card, credit card, or a bank transfer. The ease of use increases the risk of victims paying a ransom.
- Verifiable: All bitcoin transactions are documented openly on the blockchain, allowing cybercriminals to verify that a payment has been made.
- Anonymity: Bitcoin is not the most private cryptocurrency, but tumbler and mixer services allow criminals to launder ransom payments, thus, hiding their identities.
More the demand, more the value
Security experts and law enforcement officials generally advise against paying a ransom. Not only is there no guarantee that an organization will be able to recover its files after paying, but it will also perpetuate the ransomware cycle. The payment of the ransom proves to cybercriminals that ransomware attacks are profitable, which could increase the number in the future.
Despite these recommendations, no less than 45% of the organizations victimized by ransomware software have chosen to pay the ransom. To pay the ransom, companies must acquire Bitcoin, which increases the demand significantly. And, in accordance with the guiding principles of the basic economy, the greater the market demand for Bitcoin, the higher its value.
Alan Woodward, a cybersecurity professor, believes that ransomware may have played a role, but the price of bitcoin is so volatile that several factors can be combined. One of these factors could be that companies expecting a ransomware attack would have bought bitcoin in preparation.
A considerable number of companies accumulate bitcoins in case they are victims of ransomware and need to pay a request. It would seem logical that the higher the demands and the more high-profile cases, the more companies will start buying. We think this explains the rise in prices, rather than the ransom demands themselves.
According to reports, the United States currently holds the lion’s share of the attacks with 53%, and now that cybercriminals are turning to higher calibre targets, more and more companies could start buying bitcoins, will, of course, affect their price.
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