The Dark Side of Bitcoin
Oct 28, 2017 Posted / 6100 Views
In mid-May, an attack dubbed WannaCry in which a malware program attacked a countless number of people all over the world, resulting in computer lock and call for money for its unlock. The attackers in turn received thousands of dollars in the form of Bitcoin.
Because, bitcoin is anonymous and easy, it’s favourite among criminals.
Now, how criminals use Bitcoin, how to prevent yourself from Bitcoin scammers, and should Bitcoin face higher regulation in order to prevent criminals from being able to use the cryptocurrency?
This article from applancer shall explore the dark side of Bitcoin, and highlight the negative aspects that present themselves.
The WannaCry attack imitated in Europe on May 12. Using a malware software, it exploited flaws in Windows security when leaked down from the NSA and the malware spread like wildfire, Soon, the huge spread on the 15th, a web researcher was able to slow the attacks, discovering a kill switch. The malware affected users by locking out their computer and demanded money for resolution in the form of Bitcoin. Despite their speed in resolving, the attackers earned thousands of dollars in the form of Bitcoin from users.
The highlighted attack renewed the interest of media in Bitcoin, giving a massive rise in its price. At the same time, it produces many questions in the mind - whether Bitcoin can be used easily by criminals to collect their ill-gotten gains.
A strongly worded letter in Financial Times is an accurate example of it. The author claimed that states work hard to minimize illegal activity occurs with state-backed money, such as the EU outlawing 500 Euro bills, but nothing to stop Bitcoin. Also, she argued that the growth of criminals are due to Bitcoin and other cryptocurrencies and have produced nothing else productive.
Of course, it is unwise. Bitcoin should not be considered illegal by countries just because of the reason criminals are using it. As cars or dollar bills aren't made illegal, even though they are used by criminals. However, a point can be made that the anonymity of Bitcoin makes it a favourite among criminals.
This is due to the reason - the attackers haven’t figured out how to launder the Bitcoin. However, if the Bitcoin was moved or turned into another currency, there would be an easier time for law enforcement to track down the perpetrators.
One of the negatives of Bitcoin - shown on a large scale by a WannaCry attack. Its ability to be used by criminals in order to keep anonymity in their illegal activities. The cryptocurrency is not completely at the mercy of criminals, as the Bitcoin still allows the movement of funds to be viewed publicly. Similar to other currencies of states, Bitcoin should be viewed and there should have attempted to limit illegal uses but not at the detriment of the legal users.
To theft, scams, and frauds also bitcoin users are open, because of Bitcoin’s structure and lack of regulation. The general nature of Bitcoin makes its hard to prevent fraud - the biggest difficulty is - stolen or conned Bitcoin cannot be retrieved anyway and no even the transaction can be reverted. A sad story associated with this - A retired Maryland man was scammed of thousands of dollars, putting a false car advertisement online by a scammer, and asked the prospective buyer to send money - using a Bitcoin ATM. No alternate was there reverse the transaction as soon as they realize it a scam, and the Bitcoin were lost forever.
As mentioned above, Bitcoin is not an easy way for scammers to get money and run. Even though the money is transferred, alternatives are there - as mentioned by this group of computer scientists. They made an argument one minor regulation of Bitcoin, however going against the idea of decentralization that can avoid scams. Also, there is a problem of no insurance in fraudulent activities. If fraudulent made purchases through credit card, there will be a cancellation of a transaction and the bank often supports you and insure you.
With bitcoin, there is no way to cancel the transaction, and no central agency to insure against scams. Therefore, it’s important to remain vigilant during transactions.
One such concern is the Bancor project, using Ethereum. Cryptocurrency users raise some concerns that Bancor seems suspicious, and could be used by scammers. However, the concern never indicated that Bancor is a scam, but brings them under scrutiny.It’s challenging to say now which ICO is a scam or not. Though, common sense can play a role i.e. avoid investing in something - you don’t trust. For sure, some good ICOs out there that are worth on investment while yielding a good return. For more, you can read the article that looks deeper at ICOs and how to prevent from getting scammed.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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