bitcoin is not the root cause of ransomware...a bitcoin transaction message 51 to send someone a...

Bitcoin is not the Root Cause of Ransomware

Peter Van Valkenburgh, Director of Research at Coin Center

coincenter.org

Breach Encryption Payment

Breach Ransomware software gains root access to computer. Usually because somebody opened an email attachment they shouldn’t have.

Encryption

Software searches all connected drives and encrypts non-system files. Files on that computer and any connected drive with read/write access are now inaccessible. Decryption key is retained by hackers on a remote server they control.

Payment Upon boot, infected computer displays an explanation of why files can no longer be opened and a demand for payment in exchange for decryption key.

Breach Encryption Payment

Criminals building ransomware don’t

use Bitcoin because it is “anonymous” ...

they use it because it “ just works.”

Not anonymous?

What is a Blockchain?

Quick Review: Before Bitcoin

(online) BANKING

Analog

Bank of America Users World Population

Commerzbank:$? Bank of America:$?

Peter: $200 Antonie: $200

Bank of America:$200

Commerzbank:$200

ING:$200 ING:$200

Peter: $190 Antonie: $200

Bank of America:$200

Commerzbank:$200

ING:$210 ING:$200

Peter: $190 Antonie: $200

Bank of America:$190

Commerzbank:$210

ING:$210 ING:$200

Peter: $190 Antonie: $210

Bank of America:$190

Commerzbank:$210

ING:$210 ING:$190

Takes about three business days.

Takes about three seconds.

Analog

Peer to Peer Blockchain

Recipe for Digital Money

Bitcoin Protocol

Permissionless

Only need: Free sof t w are.

Int ernet connect ion.

Peer to Peer Electronic Cash

ten_dollars.mny

ten_dollars.mny

ten_dollars.mny

ten_dollars.mny

ten_dollars.mny

ten_dollars.mny

ten_dollars.mny

ten_dollars.mny

X X

X

Blockchain transaction transaction transaction transaction transaction transaction etc.

Many ledgers becomes one super ledger, the blockchain!

X X X

Blockchain transaction transaction transaction transaction transaction transaction etc.

Many ledgers becomes one super ledger, the blockchain

Identical Copies of that ledger are held by every peer in the network.

Blockchain transaction transac

Blockchain transaction transac

Blockchain transaction transac

Blockchain transaction transac

Blockchain transaction transac

Blockchain transaction transaction transaction transaction transaction transaction

transaction transaction transaction transaction transaction transaction

transaction transaction transaction transaction transaction transaction

transaction transaction transaction transaction transaction transaction

transaction transaction transaction ADD THIS NEW TRANSACTION? Y/N

Yes!

Yes!

Yes!

Yes!

Yes!

The network of peers agrees (reaches consensus) on the state of that ledger.

Blockchain transaction transac

Blockchain transaction transac

Blockchain transaction transac

Blockchain transaction transac

Blockchain transaction transac

Publ ic Address: 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy Publ ic Key: 0488ff723a55ae8f46d9decf66c10a249adb59ac91195adee879ecb5944ea7f5098dd9e193c2172047e6eacb6ddd524c77ee5669b2f69bbfb27fc03d717d657195 Pr ivate Key: e6edcf30220499bd034a7f4ebbadd4d62c89995c01157067983b4f1f26b58111

A Bitcoin Address The address where you can receive bitcoins.

The key that you must have in order to send bitcoins from your address.

Keys are linked because of a cryptographic function called ECDSA. This function generates two verifiably matched keys. It’s the same mathematics used to secure communications on the Internet.

50

A Bitcoin Transaction Message 51

To send someone a bitcoin, you must create a transaction message. The message has four essential parts:

1. The public address(es) of the recipient(s). 2. The amount(s) being sent to the recipient(s). 3. A list of previous transactions that were sent to the

sender, and that will be used to fund the new transaction. 4. The digital signature of the sender to prove that they were

the recipient of those previous transactions.

1. Destination 2. Amount 3. Source of Funds 4. Proof of Possession

Criminals building ransomware don’t

use Bitcoin because it is “anonymous” ...

they use it because it “ just works.”

Questions? Please visit coincenter.org to learn more.