It’s been a rocky week for bitcoin — and we don’t just mean in terms of price.
Actually, bitcoin’s price at the time of writing was at a record high, hitting $1859.49 on mid-day Thursday — though the past seven days had seen significant value fluctuations including a week low just under $1620 on Saturday of last week.
While it’s always tough to figure out exactly what leads to what in terms of bitcoin’s value, the culprit of this past weekend’s dip, and subsequent drops later in the week, seems to be the demand for bitcoin payment in the WannaCry malware incident that swept the globe this past weekend.
Though the price of bitcoin has recovered since, it’ll be harder to overcome this hit to the cryptocurrency’s already ailing repute among financial institutions, regulatory bodies and global governments.
It’s increasingly hard to argue that bitcoin is clean. While plenty of users and investors engage with the cryptocurrency in a clean and legal manner, bitcoin has also made it easy for criminals to make a digital leap.What happens next will be interesting to watch. If anything, the regulation conversation will grow, as will calls for direct action.
The time for talk for the sake of talk fast looks to come to an end.
In terms of WannaCry, it doesn’t appear that demanding ransom payment in bitcoin has been particularly profitable for the cybercriminals behind last week’s malware.
For instance, a handful of companies in India hit by the attack are actually concerned that using the digital currency will bring on more trouble for them.
“Fourteen clients have reached out to me in the last three and half days, and none of them are ready to pay up in bitcoins for the ransomware attack,” said Manan Shah, chief executive of cybersecurity provider Avalance Global Solutions, in a report. “They do not feel bitcoin is a legitimate mode of payment.”
Additionally, the 72-hour deadline has been causing problems among victims, since it can take companies and individuals not already dealing in the cryptocurrency longer to actually acquire BTC.
“A large amount of bitcoin is actually somewhat difficult to source quickly,” Alex Sunnarborg, an analyst at CoinDesk, told Bloomberg, noting that to create an account at a bitcoin exchange, connect a bank account and then receive BTC can sometimes take a few days.
Longer if there aren’t exchanges in the user’s country of origin — since that means they first have to exchange their local currency for another.
Data from Elliptic Enterprises, a London-based company that tracks illegal bitcoin use, found that, as of Thursday mid-day, the total amount of ransom paid out to the three bitcoin wallet addresses known to be associated with WannaCry totaled just under $86,000 (about 46.4 BTC).
That’s not very much considering the broad scale of the attack and the average ransom demanded. If everyone paid up right away, rough calculations suggest there would be at least $60 million in it for the fraudsters. Given this rough estimate, the current payout for WannaCry is just over 0.14 percent of what it could have been to date.
Those well-versed in the cryptocurrency space know that bitcoin, while hard to track, is far from completely anonymous. All bitcoin transactions by design are recorded in a permanent public ledger accessible to anyone. Users can be traced through IP addresses as well as by analyzing money flows.
A new report from Reuters suggests that bitcoin's dominance in the dark corners of the web has lasted as long as it has, despite the number of extra steps required to ensure anonymity, mostly because of its size and circulation volume.
“In the initial days of bitcoin, people...didn’t realize they were recording for posterity on the blockchain every financial transaction that ever took place,” Emin Gun Sirer, a computer science professor at Cornell University, told the news wire.
There are a number of digital currencies with actual anonymity built in —including Z-Cash, along with Dash and Monero. But for now, these cryptocurrencies are much more difficult to access, acquire and exchange for fiat than bitcoin.
But as it turns out, experts reported earlier this week that a computer virus, exploiting the same vulnerability as the WannaCry attack, had infected over 200,000 computers. Instead of demanding ransom, this virus used the computers to begin mining Monero — similar to bitcoin-based viruses released in bitcoin's early days.
This is reportedly leading some to believe that, if Monero moves to become as adopted and accessible as bitcoin, cybercriminals would turn to this cryptocurrency for the purpose of cyberextortion.