Bitcoin

The Dark Side of Bitcoin

  • This title would probably be more fitting rephrased as "the dark side of the crypto currency industry" and you will see why shortly.

    Bitcoin in particular and crypto currencies in general have always had a dark side. Bitcoin's Silkroad "adventure" gave us a clear look at this underbelly, but making it easy for criminals to purchase various illegal substances and goods off the darkweb isn't the only way the industry inadvertently facilitates cybercrime. Given the semi-anonymous and decentralized nature of the currency, it is indeed the perfect way for perpetrators of various ransomware viral attacks to pick up their ill-gotten gains.

    The WannaCry fiasco put this sort of vulnerability on full display in May, when - having started out of Asia - the ransomware infected the computers of scores of institutions and major financial organizations world-over. Eventually spreading to 150 countries, WannaCry locked the infected computers, effectively making it impossible for employees to do their jobs. Asking for a ransom of $300 worth of bitcoin to unlock the terminals thus foiled, WannaCry's creators generated a windfall of some $80,000 during the most "productive" week of their run. While everyone was advised not to pay up, and while no evidence ever surfaced that people actually managed to recover their encrypted files by paying the ransom, scores of people went ahead and paid the perpetrators into one of three Bitcoin wallets set up for this purpose.

    For a while there, rumors and speculation even surfaced in regards to the massive price-bump Bitcoin saw in May, with some experts attributing it to the fact that banks were allegedly buying up the currency to pay the WannaCry thieves.

    Their bitcoins collected, can the criminals really cash out their $80,000 at one point? Bitcoin's ability to assign a sort of "dirty" tag to bitcoins acquired as the result of criminal behavior, certainly comes into the picture here. The problem is though that the crypto currency industry as a whole makes the proper laundering of such ill-gotten virtual goods possible. Other blockchain-based payment systems such as Monero, take pride in the full anonymity they offer. By converting their bitcoins to Monero, running them through a few wallets and then re-converting them to BTC, the hackers can theoretically get away with it all and enjoy their payday.

    With that in mind, it is not exactly surprising that WannaCry's "success" inspired other subsequent ransomware attacks of its ilk, such as Petya.

    More limited in scope, Petya bore the markings of a government-sponsored cyber attack, with specifically defined targets, and fewer vulnerabilities of its own. Though it did raise some hell, the problems it caused weren't quite as widespread as WannaCry's effect.

    The bottom line is that despite its built-in security features, Bitcoin is indeed a magnet for cybercrime. Smaller caliber crooks don't shy away from using a number of other - more petty and much less talked-about - scams to rid Bitcoin holders of their virtual vehicles of value.

    There are fake wallet services out there, fake cloud mining, various HYIP schemes, fake exchanges, phishing and donation scams. It truly is a Wild West for now. The key to not being skillfully parted from your digital coins is to stay informed and to develop a common sense-based eye for spotting these scams.

    The take home message from this quick warning: Never send money to a crypto currency service before consulting with a crypto currency blacklist. If you cannot locate a review on the product or service you’re interested in, ask them to provide you with one. The ScamBitcoin crypto currency Watchdog are highly dedicated to their job of scam busting, and will usually be able to provide you with a complete review, or at least a personalized answer, within a matter of hours.