Ransomware "kidnaps" Bitcoin: Hackers also take advantage of its payment advantages

Since Friday night (May 12), a malware that locks computers has been spreading rapidly around the world, and tens of thousands of computers in nearly 100 countries and regions have been attacked. Hackers locked the data files in the computers and demanded a payment of $300 in Bitcoin to unlock the files.

Influenced by this news, Bitcoin ended its rising trend since April 29. According to data from OKCoin International, a Bitcoin-US dollar trading platform, the price of Bitcoin in the United States ended its 14-day rising trend and fell 6.42% on May 12 to close at $1,735, with a peak of $1,854. It rebounded slightly on the 13th, hovering around $1,750. According to OKCoin data, the price of Bitcoin in China fell 3.15% on the 12th, and after the shock on the 13th, the price hovered around 10,500 yuan, still above 10,000 yuan.

As of press time, the ransomware named WannaCry has caused more than 75,000 computers in 99 countries and regions around the world to be attacked by viruses.

However, just as everyone began to question the security of Bitcoin and other virtual currencies and whether the so-called "decentralization" had loopholes, several virtual currency investors and people in the blockchain circle told the First Financial reporter that this ransomware virus had no direct relationship with Bitcoin itself, and that hackers demanded ransom payments in Bitcoin precisely because they saw the advantages of Bitcoin in terms of globalization, decentralization, and anonymity in payment transfers.

"In a sense, this global ransomware attack is more like an 'application scenario' of Bitcoin," a senior virtual currency investor told China Business News.

Why Bitcoin?

In fact, this type of hacker ransomware has existed since 1980. According to Cyence data, hackers often target hospitals, companies and other places with low levels of information technology, and the average ransom payment is between $500 and $1,000. Due to the existence of Bitcoin, global ransomware has become less expensive and less risky than crimes such as credit card fraud.

Several Bitcoin investors told reporters that the reason for the ransomware attack had nothing to do with Bitcoin itself, and the industry was worried that Bitcoin would be "demonized." The reason why hackers demanded ransom in Bitcoin was that it had many advantages in global remittances, making it the chosen means of payment.

Bitcoin investors generally believe that Bitcoin is used for extortion because Bitcoin not only has advantages over other traditional payment tools, but is also the best choice among other virtual currencies. First, Bitcoin has a certain degree of anonymity, which makes it easier for hackers to hide their identities; second, it is not restricted by geographical location and can receive payments worldwide; at the same time, Bitcoin also has the characteristic of "decentralization", which allows hackers to automatically process victims' ransoms through programs. Compared with other digital currencies, Bitcoin currently has the largest market share and the best liquidity, so it has become the choice of hackers. This is similar to the logic behind the fact that criminals in reality like to use US dollars in cash.

However, there are also views that the above advantages of Bitcoin actually have loopholes, and Bitcoin's transaction processing efficiency and anonymity are not ideal. Take anonymity as an example. Although Bitcoin transactions are anonymous, the identity of Bitcoin traders can actually be traced.

"Bitcoin transaction information is actually transparent. Although identity information will not be transmitted during payment, the IP address of the user at the time of payment is traceable. The characteristic of Bitcoin's full network accounting makes it possible for the content of each transaction to be seen in all accounting nodes. We can query specific transaction information such as transaction volume on websites such as blockchain.info. For example, one of the payment addresses announced by the hacker this time had received a total of 23 Bitcoin remittances as of 6 pm on May 13, with each payment being around 0.17 Bitcoins, totaling about 4.26 (worth about $7,455). According to the cases that the FBI has handled, unless the user is good at anti-tracking (such as using Tor), the identity of most users can still be traced." A senior blockchain person told reporters that if the blackmailer does not use or trade the Bitcoin after receiving it, his identity will still be impossible to track.

The picture shows 23 ransom payment transactions displayed on blockchain.info as of 6 p.m. on the 13th.

When checking the above 23 Bitcoin transactions, the above-mentioned blockchain circle personnel also found that there was actually no corresponding relationship between the IP address of the victim's computer and the IP address of the computer from which the Bitcoin was remitted, and the hacker did not require the victim to attach relevant information of the victim's computer when remitting Bitcoin. In other words, the hacker did not actually know which computer had remitted Bitcoin to him. Since there was no corresponding relationship, even if the Bitcoin was paid, the hacker might not be able to automatically restore the computer.

If this is true, this global extortion does not seem like a real extortion, and Bitcoin is merely a tool used by the creators of this "sensation".

In fact, in addition to extortion, some crimes in the dark web, such as money laundering, illegal transactions, and evasion of foreign exchange controls, also take advantage of the anonymity of Bitcoin. For example, in October 2013, Silk Road, an electronic trading platform that used Bitcoin for anonymous illegal transactions, was seized by multiple US law enforcement agencies, and 26,000 Bitcoins were also seized, which were worth about $3.6 million at the time. The founder and operator of the platform, Ross Williams Ulbricht, a 29-year-old young man with no criminal record and who was studying for a degree, was active online as "Dread Pirate Roberts". In just two years, he turned Silk Road into the largest black market in the online world, with nearly 1 million customers and total sales of up to $1.2 billion. On this platform, services include making fake passports and driver's licenses, illegally invading systems and obtaining information, buying and selling drugs, weapons, pornographic services, etc., but all transactions are completed through Bitcoin payments. It is precisely by taking advantage of the anonymity of Bitcoin that criminals "perfectly" avoid the possibility of regulators tracking the origin and destination of each money through bank card transaction records.

In addition, Bitcoin is also used to launder money and illegally transfer assets. Bitcoin can be bought with local currency, sold on foreign trading platforms, and then withdrawn in US dollars. The asset transfer can be completed in a few minutes.

“The more you mine, the less you have” causes the price of Bitcoin to soar

There is also a view that hackers may also want to collect some Bitcoins.

"I'm planning to buy some Bitcoin and Litecoin recently, and I think this is the best time to buy," a virtual currency investor told reporters after seeing the ransom message.

Another investor also said: "Bitcoin fell nearly 10% today. This is a good time to buy. News like this will indeed cause short-term price fluctuations, but basically it will still go higher in the long run."

The ransomware news and price fluctuations have hardly affected investor confidence. On the other hand, the popularity of Bitcoin has also contributed to the outbreak of various problems.

Since Bitcoin came out of the ABC interpretation stage, it has been gaining popularity. Since May, the price of Bitcoin in the United States has exceeded the $1,800 mark, and the price in China has also recently exceeded 10,000 yuan. There are many reasons for the continued rise in Bitcoin prices, but the most fundamental one is its natural scarcity.

"Technically, when Bitcoin was first created, the principles of mathematics and computer software were used to ensure the constancy of the amount of Bitcoin issued. Its total amount has grown very slowly. Currently, the amount of Bitcoin generated every ten minutes in each block structure has been reduced from the original 50 to 12.5, and will eventually reach an upper limit of 21 million. "Bitcoin is essentially a 'deflationary currency'. The original intention of the inventor was to resist the problem of inflation caused by the central bank's excessive issuance of banknotes to a certain extent, so this electronic currency system was invented to try to balance the money market." said the above-mentioned blockchain circle person.

Globally, the number of users who follow or participate in Bitcoin transactions has continued to rise in recent years. As of now, the number of active users has increased from an average of 1.6 million in 2013 to 8.7 million at present. When the output of Bitcoin cannot keep up with the scale of transactions, it will inevitably lead to a shortage of supply. The natural scarcity is the primary reason for the continuous rise in Bitcoin prices.

Figure 2 shows the number of active Bitcoin wallet users.

Huobi.com's special analyst believes that since April, the positive news of international recognition of Bitcoin has continued to stimulate the rise of Bitcoin. After Japan's "Payment Services Amendment Act" supporting Bitcoin payment came into effect on April 1, the legality of Bitcoin and other virtual currency payment methods in Japan was recognized, and 260,000 stores in Japan will accept Bitcoin payments.

In recent days, the sharp rise of Bitcoin is also closely related to the approaching date of the US Securities and Exchange Commission's review of Bitcoin ETF on May 10. If the Bitcoin ETF is approved for listing by the US Securities and Exchange Commission, it means that Bitcoin's global investment status will rise further.

Australia recently announced that it will treat Bitcoin as a currency and abolish the Bitcoin Goods and Services Tax on July 1, 2017. Bitcoin traders and investors will no longer be taxed when buying and selling Bitcoin through regulated exchanges and trading platforms.

Some Bitcoin investors also told the reporter from China Business Network that the popularity of blockchain technology is also one of the reasons. "Digital currency itself is the best tool to understand blockchain. Now many people who are interested in blockchain will choose to buy virtual currency to deepen their understanding. "With the continuous increase in Bitcoin application scenarios, it may further attract investors to buy Bitcoin. In fact, global blackmail is also an application scenario." The above investor laughed. (Reporter Wu Qian of this newspaper also contributed to this article)

Editor: Lin Jiechen