Bitcoin may be garnering a lot of interest from all sorts of investors, but it’s losing its luster for criminals, as they move on to a different cryptocurrency.
According to a report in Bloomberg, during the course of the past two months, so-called privacy coins — which were created to avoid tracking — have jumped as law enforcement has begun using software to monitor the use of bitcoin.
Roughly three months ago, the European Union’s Europol law enforcement arm raised concerns about other cryptocurrencies — including privacy coins like Monero, Ethereum and Zcash — are becoming more popular with the bad guys. Europol said ransomware hackers are requiring payments with these alternative currencies instead of bitcoin. In fact, Monero has become a favorite among hackers who are launching ransomware attacks, noted Matt Suiche, founder of Dubai-based cybersecurity firm Comae Technologies.
During the last two months of 2017, CoinMarketCap.com reported that Monero’s valued quadrupled to $349, making it one of the most valuable digital currencies. Bitcoin doubled in the same time frame, noted Bloomberg.
Monero is attractive to criminals because it offers more anonymity and privacy than bitcoin, which works on blockchain technology. With bitcoin, the digital ledger keeps records of all transactions, and that data is then used by research firms to catch wrongdoers, noted Bloomberg. Monero, which was created in 2014, uses encryption to mask the recipient’s address and the transaction amount.
Monero isn’t the only privacy token getting attention. Zcash, its main rival, encrypts the true addresses of the senders, which makes it impossible to figure out the sender by poring over transaction data. That, noted Bloomberg, is a vulnerability for Monero.
The developers behind Monero told Bloomberg that the goal of the cryptocurrency is to create a digital token that protects privacy. Riccardo Spagni, core developer at Monero, told Bloomberg that most people use it for legitimate purposes, not wanting others to know what they are purchasing.
“As a community, we certainly don’t advocate for Monero’s use by criminals,” Spagni said. “At the same time, if you have a decentralized currency, it’s not like you can prevent someone from using it. I imagine that Monero provides massive advantages for criminals over bitcoin, so they would use Monero.”