One of the economic drivers that powers cybercrime and cybercriminal activities is cryptocurrency. We hear a lot of hype about the blockchain and about Bitcoin, Ethereum, Litecoin, the list goes on, but the fact that cryptocurrency can be acquired and traded pseudo-anonymously, if not entirely anonymously, has put it at the center of cybercriminal activities. TechRepublic met with Malwarebytes CEO Marcin Kleczynski to explain the relationship between cryptocurrency and cybercrime. Below is a transcript of their interview.
Kleczynski: First and foremost, I'm a big fan of cryptocurrency. I think, you know, this wonderful technology, public ledger, gets us unhooked from all the banks. It is a wonderful technology, but it is the primary reason crimes like ransom have proliferated over the last couple of years. I think there's pros and the cons of this cryptocurrency, and I think we've just scratched the surface of what is actually possible. A lot of these new crimes are enabled by this type of, you know, being anonymous on the internet as we've seen in the past and now for financial gain. So, I think we're just scratching the surface of what is possible with cryptocurrency and cybercrime.
If you look at the old mafia verses the new mafia, the results are so close in terms of the old mafia, you know, laundering money, drugs. The new mafia, ransomware and being able to actually use cryptocurrency to do that. I mean, it's just a very interesting environment.
Patterson: So, lets talk about the anonymity behind cryptocurrency. Some is more than others. Not all crypto is built the same. Help me understand. Help us understand the differences between say Bitcoin and a more anonymous form of currency. Are these really anonymous and what are the dangers of getting caught if you're thinking about executing a cybercrime and using Bitcoin?
Kleczynski: I think the difference between many of these cryptocurrencies is simply implementation detail, how the network is architected, how the transactions and ledgers is architected. There is a good degree of being anonymous using these cryptocurrencies. That being said, if you buy Bitcoin through an ATM that's in a public space, I mean, there are cameras around and that makes you less anonymous. So, many of these criminals use online services to acquire and trade these cryptocurrencies, which is why they're able to remain anonymous on the internet. But I think it's a matter of time before government intervention gets it to be a little less anonymous than it is today, or has been in the past.
Patterson: I'm a big fan of Public Enemy and a wise man once said, "Don't believe the hype." Where are we with cryptocurrency? Do we believe the hype or should we remain skeptical?
Kleczynski: I think we're at the peak of the hype and I'm a big fan, as a I said, and I'm an investor in a couple of, you know, coins and very minimal investor. But I do think we're at the peak of the hype for now. We will see, I mean Bitcoin has become less of a currency and more of a, as people say, the value asset, you hold it. You don't really use it. Some of the transaction costs, to buy a cup of coffee with Bitcoin are through the roof. Almost financially reckless, if you were to buy a cup of coffee with Bitcoin. So, we're at the cusp of seeing, you know, what will happen with certain coins, certain currencies. There's already been evolutions of Bitcoin into more stable currencies and I think we're at the peak in some of these hype cycles. So, we'll see what happens. But I do think there will be a drop before there's an increase.
- Bitcoin: A cheat sheet for professionals (TechRepublic)
- The difference between Bitcoin and Ethereum explained (TechRepublic)
- Is blockchain overhyped? (TechRepublic)
- Bitcoin thieves use Google AdWords to target victims (ZDNet)
- Ransomware: Why the crooks are ditching bitcoin and where they are going next (ZDNet)
Dan Patterson has nothing to disclose. He does not hold investments in the technology companies he covers.
Dan is a Senior Writer for TechRepublic. He covers cybersecurity and the intersection of technology, politics and government.