Jul 21 2014

Inside the $1 million Bitcoin ransomware scams

Encrypting your files is a good security practice—except when someone else is doing it for you, with no good intentions at all.

Such is the case with ransomware, a type of fraudulent malware that locks the users out of their precious computer files, and demands a ransom to decrypt them again. The use of this scam is on the rise, as digital hostage-takers rake in fortunes.

To estimate the profits of this kind of market is not an easy task because most of ransoms are paid in Bitcoin, the peer-to-peer decentralized electronic currency system. One of the main characteristics of Bitcoin is the ability to obscure users’ identities. Anyone can send and receive bitcoins without giving any personally identifying information. Instead of names or email addresses, a so-called wallet addresses—a string of arbitrary numbers—is used to move funds.

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