While bitcoin has enabled criminals to move their activities online, notably the ransom payment of choice for last weekend’s WannaCry malware incident, 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, is mostly related to 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 newswire.
A single bitcoin payment is enough to expose user identities and transaction histories. While bitcoin’s lack of total anonymity may not be a major issue for regulators, banks and proponents of its underlying blockchain tech, it could still put a dent in its overall use by cybercriminals who want to keep transactions private.
Especially since there are a number of digital currencies with actual anonymity built in — including Z-Cash, along with Dash and Monero. For now, these cryptocurrencies are much more difficult to access, acquire and exchange for fiat than bitcoin.
But 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.
“This used to happen in bitcoin before it became big — there were loads of botnets that went into computers that used to mine bitcoin, but you now can’t basically mine bitcoin on normal computers because you need specialist hardware,” Chainalysis CEO Jonathan Levin told Reuters. “If Monero does become adopted and is as big and liquid [as bitcoin], that means the crime [will] move from using computers to mine to getting to extortion,” Levin said.