Cryptocurrency is a term that we hear a lot, but for many of us, it remains a bit of a mystery. We’ll take a look at it from a high level to provide some understanding. Why? Well, it isn’t going away, and it only seems to be gaining popularity. And also, because if you are a target of a ransomware attack, it could very likely be how the hacker demands payment. Now, we are not suggesting you pay that ransom demand - in fact, the US Department of the Treasury has issued warnings against paying - but getting familiar with cryptocurrency will help you in understanding how these cybercriminals are able to fly under the radar.
What Is It?
Sometimes referred to as ‘crypto’, cryptocurrency is a digital currency and form of payment that is used online in exchange for goods and services. The companies that use it refer to their own currencies that they have issued as (virtual) tokens. And yes, they are much like a casino chip or arcade token that represent real currency that you’ve used to pay for the chips or tokens.
How Does It Work?
Cryptocurrencies work by using something called blockchain. Blockchain is a decentralized form of technology that allows many computers to manage and record transactions. There are nearly 7000 different cryptocurrencies in circulation, and they raise money through their ICO or initial coin offering. The one that most people are familiar with is Bitcoin. Other popular cryptocurrencies include Ethereum and Dogecoin.
Should I Buy It?
We would never tell you how to spend or invest your money, but some people view crypto as a lucrative investment opportunity. Keep in mind there's a lot of hype involved as well. Warren Buffett compared the crypto Bitcoin to paper checks. He said that “It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money?”
And yes, despite not being something many people are familiar with, using cryptocurrency is legal in the United States. You can purchase it by downloading different apps that act as trading exchanges for your money to be converted into cryptocurrency. Some are specific to this and only this, and others allow you to purchase stocks as well as crypto. Tesla recently announced that you can purchase a car with Bitcoin! If you do decide to venture into this as an investment, do your due diligence and research this as thoroughly as possible. Be sure to comply with all regulations, which will be emerging over the next few years.
Why Is It Popular?
There are a few reasons that cryptocurrencies are so popular. Some people like the blockchain technology that is used because it is decentralized in its processing and recording system and therefore more secure than traditional payment processing options. Other people like removing central banks and the control over currency that they bring to the table.
The ability to transact anonymously unfortunately makes cryptocurrency attractive to criminals. Because the bank isn’t involved, the anonymity that this provides in transactions means that hackers can receive ransomware payment without ever having to give up their identification. Converting cash to crypto doesn’t even require a legal name or address – and neither does sending or receiving it. The only time personal identifying factors come into play are when the cybercriminals steal yours and require you to pay them to get it back.
With so many criminals demanding ransomware payments in cryptocurrency, we'll see the Government taking action against illegal activity: “Cybercriminals have deployed ransomware attacks against our schools, hospitals, and businesses of all sizes,” said Deputy Secretary Justin G. Muzinich. “Treasury will continue to use its powerful tools to counter these malicious cyber actors and their facilitators.”
So yes, it is important to know even a little bit about cryptocurrency, but even more important to know about how to be smart when it comes to your personal and professional cybersecurity so that you never have to send it to strangers.