In the past few weeks,a widespread and coordinated international cyberattack seized control of hundreds of thousands of computers in 150 countries. Those affected by the cyberattack would see a window pop up on their screen telling them that their files were inaccessible, then demanding victims pay a ransom lest their files get deleted. But the ransomers in this attack werent demanding gold bars, a parachute or sacks of unmarked bills delivered to a secure location. They wanted Bitcoin.

Bitcoin is what is known as a cryptocurrency, a digital currencythat is distributed without any kind of centralized bank. The mechanism of distribution is complicated you can read a full rundown here but basically, Bitcoin relies on its users distributed computing power to ensure the viability of transactions.Running the software to keep track of transactions takes resources, and users who do so are motivated by the possibility of earning Bitcoinsfor their computers assistance in keeping track of the Bitcoin ledger.

Its boosters see Bitcoin as having many strengths compared to regular, fiat money: Cryptocurrencies have no central bank managing and issuing them, and are mostly anonymous when transactions occur. (This latter point is arguable, as Ill discuss momentarily.) And unlike fiat money, which usually moves across the world via banks or financial agencies, cryptocurrencies can move around through digital wires unhindered by processing fees or taxes.

The perceived strengths of Bitcoin as an alternative to fiat money that it moves around pseudonymously, and thus is much harder for feds to track or seize accounts are also its weaknesses. Indeed, these characteristics have made Bitcoin the currency of choice for ransomware hackers as well as illicit online marketplaces like the now-shuttered Silk Road or AlphaBay, which allow buyers and sellers to trade black-market goods like drugs and credit card numbers alongside quotidian, traditional online marketplace goods like clothes and books. Yet the ethereal aspects of Bitcoin you dont need to store it in a bank, and it doesnt exist on paper, but is merely a string of numbers means that its the ideal tool for a digital ransom.

I think [Bitcoins] association with malware and ransomware signals that it has a problem, because Bitcoin investors and developers and pardon this terrible term bitvangelists dont want that,Julian Gottlieb, an associate professor of politics at the University of Oregon who studies cryptocurrencies, told Salon.

Institutional investment gives cryptocurrencies like Bitcoin a patina of legitimacy, Gottlieb explained. In Japan right now, because of some economic stagnation, theres been an effort for investors to diversify their portfolios, and theyve been encouraging people to diversity portfolios and invest in Bitcoin, he said.

Bitcoins value, currently around $1700 USD per coin, rises and falls depending on how many people invest in it meaning, how many buy Bitcoin in exchange forreal money (or fiat money, if you prefer arguably, all currencys value is virtual and imagined).

So, is Bitcoin to blame for enabling these digital ransomers? Many Bitcoin enthusiasts scoff at this idea. Becky Metivier, in a blog for Sage Data Security, argued that Bitcoin is not to blame for ransomware. Metivier points out that poor security policies and practices are just as much to blame for ransomware as encryption and bitcoin.

Because of its association with ransomware, Bitcoins benefits have been obscured by a cloud of misconception, Metivier writes.

Part of that misconception is the notion that Bitcoin is really anonymous. Because all transactions are recorded in the blockchain basically an ever-growing ledger Bitcoin offers some ability to track transactions.Bitcoin is pseudonymous, not anonymous, saysCharles Bovaird, Lead Markets Writer for CoinDesk, a cryptocurrency news site. The cryptocurrencys transactions involve transfers betweenbitcoin addresses, which arestrings of letters and numbers.Every time a bitcoin transaction takes place, it gets recorded on the blockchain, where it is linkedto the addresses involved.

Over time, a bitcoin address can develop user history. If one of these addresses is associated with several transactions,it makes it easier to track the user of that address, he added.

Outside of enthusiasts, who share information about cryptocurrencies in many different online forums and news site, the average person might only hear about Bitcoin when its in the news for something like a cyberattack or ransomware story. Bitcoin has shown its promise for a lot of illicit activities, like hacking for pay, large scale heists online. . . the semi-anonymity of the technology does lend itself to that, said Gottlieb.

Gottlieb sees a problem in the way that the news cycle works around Bitcoin:Since it is decentralized, there is no central voice to defend the currency when a news story portrays it in a negative light.

If Chase Bank were hacked, they would have a PR community, Gottlieb said. But [Bitcoin] is a fractionalized community theres no way to respond to something like this en masse.

One might draw a similarity to Occupy Wall Street: Because of its inherently decentralized nature, one bad apple say, a man climbing a public art structure and refusing to come down reflects poorlyon the entire organization, with no point person in the PR department to run damage control.

For his part, Gottlieb sees Bitcoin as having more populist possibilities that go far beyond its potential as a tool for cybercriminals. The same thing that makes it possible for hackers to hold digital assets hostage and extract wealth from people with Bitcoin also allows it to be a potential source of power for activists in authoritarian regimes, he said. It can keep people anonymous, protect their identity.

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Recent ransomware attacks raise the question: Is Bitcoin only for cybercriminals? - Salon

SAN FRANCISCO When hackers behind a worldwide ransomware scheme insisted on bitcoin as payment, they showedthis high-flying digital currencyjust can't shake its connections with the digital underworld.

Perpetrators of the WannaCrycyberattackthat swept the globe and more than 200,000 victims in 150 countries over the weekend demanded $300 per user to unlock the frozen devices. They wantedransom inbitcoin, reinforcingthe notion among some that the digital currency is synonymous with shady corners of the Dark Web.

"Any time there is a ransomware attack for the next year, bitcoin will be blamed fairly or not because of this," says Melanie Shapiro, CEO of Case, a bitcoin hardware wallet.

Those links have held back some of the commercial endeavors of bitcoin's advocates, who are trying to bring this currency into the mainstream. But reflective of a global boom in demand for the alternative currency, the criminal connections have done little to slow a recent rally in prices.

"This won't help, but whether it will taintthe (record value of bitcoin) ishard to say," says Bram Cohen, the inventor of BitTorrent, a communications protocol of peer-to-peer file sharing used to distribute data and electronic files over the Internet. "This example was crude and the transaction path is very traceable."

Criminals are thought to favor bitcoin as a preferred form of money transfer because it is harder to track than conventional payments and easily transferable between countries because it bypassesbanking systems.

Instead of using cash or check they are want to be paid in bitcoin because they believe its anonymous and its quick, says Luke Wilson, vice president for business development and investigations at Elliptic Enterprises, a consulting firm that works with law enforcement to assist in tracking of bitcoin.

Cryptocurrency experts doubt the episode will badly tarnish bitcoin's reputation. According to CoinDesk, prices fell 6% Monday to $1,666.44. But these prices have been on a tear a year ago,they were worth less than $500.

The currency, the digital equivalent of gold for some speculators, has been boosted by interest in alternative currencies, changes in Japanese payment regulations and a recent boom market in Korea.

"We're in a strong bull cryptomarket," says Brock Pierce, managing partner at Blockchain Capital and chairman of the Bitcoin Foundation, a nonprofit aiming to standardize use of bitcoin."I wouldn't be surprised if we see a run-up to $3,000."

Links to criminal activity have hammered prices in the past. For example, the hacking of Mt. Gox, the largest bitcoin exchange in the world, in 2014 and the related theft of consumers' bitcoindrove down the currency's value by more than 80%.

Meanwhile, Bitcoin's stigma as a favoredcurrency of cybercriminalshas undermined the ability of its advocates to introduce it to more established markets. In March, the Securities and Exchange Commission rejected a proposal for the first exchange-traded fund that would track bitcoin'sprice. The SEC noted significant markets were unregulated and said it was worried the proposed ETF's exchange operator would not be able to address concerns "about the potential for fraudulent or manipulative acts and practices."

Federal regulator rejects Winklevoss bid for first bitcoin exchange fund

Unlike after the Mt. Gox crash, bitcoin prices have proved largely resilient to its links with criminal acts.

"Bitcoin makes some nefarious things easier, but it ultimately makes a lot of positive things possible," through micro-transactions to those in need in oppressed regimes such as Venezuela and North Korea or getting funds to people without bank accounts, saysKathleen Breitman, co-creator of Tezos blockchain platform, a form of cryptocurrency.

MORE:

'WannaCry' ransomware attack: What we know

Microsoft on massive ransomware attack: nations must not hoard cyberweapons

Ransomware 'WannaCry' attack: Asia reports thousands of new cases

Contributing: Elizabeth Weise and Mike Snider.

Follow USA TODAY's San Francisco Bureau Chief Jon Swartz @jswartz on Twitter.

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Bitcoin ransomware demand shows criminal links are hard to shake - USA TODAY

WCry, the National Security Agency exploit-powered ransomware worm that began spreading worldwide on Friday, had reportedly affected hundreds of thousands of computers before the weekend, but the malware had only brought in about $20,000 in ransom payments. However, as the world returned to the office on Monday, those payments have been rapidly mounting, based on tracking data for the three Bitcoin wallets tied by researchers to the malware. As of noon Eastern Time on Monday, payments had reached an estimated $71,000 since May 12. So far, 263 payments have been made to the three wallets linked to the code in the malware.

The payment history for each wallet shows individual transactions ranging mostly between 0.16 and 0.34 Bitcoin (approximately $300 and $600, respectively), with the number of larger payments increasing over time. Different ransom amounts have been presented to victims, and the price of Bitcoin has climbed dramatically over the past week, causing some variation in the payment sizes.

According to researchers at Symantec Security Response, tracking ransom transactions would have been much more difficult if not for a bug in code that was supposed to create an individual bitcoin wallet for each victim:

Because the code failed, it defaulted over the three preset wallets. This, along with the "killswitch" code that was left in the initial wave of WCry malware, may be an indication that the malware wasn't yet fully tested when it was launched.

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WCry ransomware worm's Bitcoin take tops $70k as its spread continues - Ars Technica

Bitcoin is in the news again after Friday's worldwide ransomware attack. The malicious software locks down victims' computers and refuses to grant themaccess to their files unless they agree to pay at least $300 in bitcoin. Which may have you wondering: What is bitcoin? And why do the attackers want payment in that currency?

Here's a refresher on bitcoin and how it's connected to the ransomware threat.

What is bitcoin?

Bitcoin is a kind of digital currency. You can buy it with dollars or euros, just like you can trade any other currency. You store it in an online wallet. And with that wallet, you can spend bitcoin online and in the physical world for goods and services. Even PayPal supports bitcoin.

And, of course, bitcoin has a valuation, which you may have heard aboutbecause bitcoin's price has fluctuated up and down.

[How to protect yourself from the global ransomware attack]

What's different about bitcoin?

Usually, if you pay for something on the Internet, you use a credit or debit card. That card is connected to information about you, such as your name and billing address.

You can use bitcoin the same way, but unlike with a credit card, the transactions you make with the currency are completely anonymous. They can't be used to identify you personally. Instead, whenever you trade in bitcoin, you use a "private key" associated with your wallet to generate a bit of code called an address that is then publicly associated with your transaction but with no personal identifying information. In that way, every transactionis recorded and securely signed in an open ledger that anyone can read and double-check.

So you can use bitcoin to protect your privacy. Is that why the WannaCry attackers picked it as a form of payment?

Possibly. Bitcoin has certainly gained prominence in the news mediaas a technology that can facilitate crime. But even though the identities of people in a bitcoin transaction may be hidden, the public ledgerhas increasingly helped law enforcement trace the movement of bitcoins from place to place.

The Justice Department has successfully prosecuted online criminal operations that used bitcoin.In 2013, the government arrested Ross Ulbricht, the founder of a major underground drug market, and seized more than $3.5 million worth of bitcoin. Two undercover FBI agents associated with the investigation werelater accused of stealing some of thatcurrency.

Could law enforcement wind up doing something similar with WannaCry?

The government is already investigating. On Monday, White House homeland security adviser Tom Bossert told reporters that attribution the process of figuring out who was responsible for the crime is generally pretty tough incomputer attacks. Often, the attackers are located beyond the reach of U.S. law enforcement or have shrouded their activities behind multiple layers of security. But, Bossert said, I don't want to say that we have no clues.

How much money have the attackers collected?

So far, it looks to be about $55,000, according to a bot designed by the news site Quartz that is tracking the amount of money in the attackers' wallets.

Considering that Europol, the European Union law enforcement agency,has said that more than 200,000 computers have been infected with the malware, that doesn't seem like a lot of money.Still, the value of a single bitcoin has risen steadily in recent years. Hours before WannaCry began spreading last week, the price of one bitcoin hit an all-time high of $1,830. Some analysts predictthat it could break $3,000 by year's end although the price fell by $200 after the attack was revealed.

In light of how cheaply and easily hackers can push out ransomware, winning even a handful of bitcoins and holding onto them for a while could make the cyber-thieves a large sum of money.

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What you need to know about bitcoin after the WannaCry ransomware attack - Washington Post

The currency has risen by 55 per cent this month and pushed it past the $1,900 mark on the Bitfinex exchange on Friday.

Gold is currently trading at $1,232.90, with the highest price of gold in the last 10 years hitting $1,905.10 on September 5, 2011.

The rise of bitcoin in recent weeks is helping the overall soar in so called alt-coins which has been fuelled by frenzied speculation with some values rising by a staggering 500 per cent in the past week alone.

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There are more than 830 alt-coins ranging from Litecoin, a rival to bitcoin, to MiketheMug, a coin that promises to make weekly payouts to holders.

Bitcoins are discovered in a process of mining, rather than being printed, in a process where transactions are verified and listed in a public ledger, known as the block chain.

People send bitcoins to each other over the bitcoin network all the time, but unless someone keeps a record of all these transactions, no-one would be able to keep track of who had paid what.

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Five pound notes with low serial numbers, especially those beginning with AA01, can be worth 200

The bitcoin network deals with this by collecting all of the transactions made during a set period into a list, called a block.

Its the miners job to confirm those transactions, and write them into a general ledger.

The process is largely unregulated with anyone with access to the internet and the right hardware can participate in mining.

Speculation in the market is said to have benefitted anonymous payment systems, which are believed to be used by cyber criminals who are executing attacks such as the ransomware hack that spread across the globe on Friday, hitting more than 200,000 victims such as the NHS.

Reuters

The rise in these initial coin offerings (ICOs) - unregulated issuances of cryptocurrencies where investors can raise money - has drawn the attention of both lawyers and financial analysts.

Some believe the issuing of ICOs could be being used as a way of raising cash for businesses while circumnavigating existing securities laws and regulations.

Ajit Tripathi, a director in fintech at PwC, said: An ICO issues crypto tokens rather than stocks and bonds, but thats irrelevant to the substance of the activity, which is raising capital from the general public.

Capital raising activities need to be regulated to protect investors.The question is, how sophisticated are these investors?

Regulators have been slow to react to the rise of cryptocurrency trading, with Japan only moving to tighten regulation of trading last month.

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Observers say individuals are trading in alt-coins from corporate IT departments, mainly in the financial sector, but have fallen under the radar of senior executives.

Brian Lord, former deputy director for intelligence and cyber operations at GCHQ, the UKs electronic surveillance agency, said: Systems are being used here by employees to increase their own individual wealth. In the process, corporate systems are coming into contact with the fringes of the criminal world.

ICOs are also beginning to gain attention from venture capitalists such as billionaire and early bitcoin supporter Tim Draper, who announced plans to invest in the highly anticipated launch of Tezos this month.

The token is expected to pick up widespread support from the sectors many unregulated exchanges, many who have the capacity to make or break a new coin.

Bitmex trader Arthur Hayes, said: We are just looking at whether they are going to be popular, they are selling you a dream.

"The dream is either going to happen or not and thats why they are exciting for people. That tension is great for an exchange.

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Bitcoin bubble fears as online currency now more valuable than GOLD - Express.co.uk