The odds are pretty good that you’ve heard of Bitcoin. The odds are also high that you heard about it because of two facts. The first is that it is that ransomware encrypts, or locks, your files and requires that you pay in Bitcoin to unlock them. The second (and related) fact is that the value of Bitcoin is skyrocketing – if you bought $100 of Bitcoin on the first day of 2017, you could sell it for $630 today. What kind of investment yields a 530% return over 10 months? What is Bitcoin?
Bitcoin was created by an anonymous person in 2009 as an alternative to nationally-backed currencies like the Dollar or Euro. There are two things that make it very different from traditional currency.
1. Bitcoin is created, or mined, by solving math problems which become increasingly more complex. The problems themselves aren’t relevant to any actual real-world problems – they only exist to make Bitcoin difficult to create. This means that creating it requires a tremendous amount of computer power (and time and electricity). The difficulty makes Bitcoin scarce, and that scarcity makes it valuable – just like mining diamonds or gold, it takes time and energy to find even a little of it.
2. When Bitcoin is spent, the sender and recipient are anonymous other than a user ID each person has. (This anonymity is why it’s used by ransomware crooks.) However, the fact that one ID sent Bitcoin to another is broadcast publically, meaning that everyone knows every transaction that occurred. You can track each Bitcoin’s history all the way back to the time it was created.
The difficulty to mine a Bitcoin grows as more and more is created – there is currently 16.7 million Bitcoin in circulation, and only 21 million can be mined before creating more becomes impossible. At that point, no new Bitcoin comes into the system – it can only be traded.
One of the reasons that the value is rising so much is that so many people have been hit by ransomware. Anyone hoping to unlock their files by paying the criminal that encrypted them will need to acquire Bitcoin at least long enough to pay the ransom, but there’s only so much of it available. Another reason is that Bitcoin is very difficult for governments to control, so it’s a popular thing to buy in places where the government maintains a tight hold on how money can be used, such as China.
More recently, the biggest reason that it’s becoming so valuable is probably that everyone is looking at a 530% financial return and trying to hop on board before it comes crashing back down. Historically speaking a crash is inevitable – it crashed 71% overnight in 2013, 49% over a single month in 2014, and 36% in July of this year. Much like our own stock market, however, there’s always someone willing to buy the dip, at least so far.
To learn how WingSwept can help you avoid having to buy Bitcoin by keeping your company’s computers ransomware-free, call us at 919-779-0954 or email us at Team_WingSwept@WingSwept.com.