Cryptocurrencies – a Cyber Threat or Panders of Terrorism?

Are cryptocurrencies a real cyber threat of the future or real accomplices for terrorists? On the first glance it definitely seems ridiculous. Any instrument developed by humanity can be used to harm the inventor. Money provides opportunities, but the paths chosen depend on the individual making the first step. 

9 Total views
0 Total shares
Cryptocurrencies – a Cyber Threat or Panders of Terrorism?

Are cryptocurrencies a real cyber threat of the future or real accomplices for terrorists? On the first glance it definitely seems ridiculous. Any instrument developed by humanity can be used to harm the inventor. Money provides opportunities, but the paths chosen depend on the individual making the first step. Crimes should not be stopped by prohibiting money, kitchen knives, simple ropes or other dangerous objects – properly used no damage occurs. Development of corresponding policy, correct investigations, prosecutions, arrests, informing of society contribute to the healing. Unlawful deeds have to be sustainably unprofitable, but virtual moneys are capable to provide unconsciously some benefits to criminals.

Jeremy Jacobson in his SenseCy Blog (Making Sense of Cyber) has pointed out a feature of cryptographic currencies that has not been widely discussed before. He, as many other cyber safety experts, got bothered with the coin as it gained immense popularity during the past year and the tendency is not going to cease. Mr. Jacobson states that while making forecasts on the viability of Bitcoin and similar units, many people forget about

“…the next logical step in the evolution of encrypted P2P currencies: the eventual weaponization of the cyber-coin.”

Bitcoin, being the most popular among its counterparts, has the highest price and level of recognition on and off the market. It is not surprising at all that is already has been involved in some scandals. The loudest story was provided by Silk Road and Ross Ulbricht, the echo is still to be heard as Charlie Shrem was accused within the framework of the same case recently. Although it is proved that the platform offered drugs, criminal activities and other illegal matters, contributed to money laundering, only 3 persons have been arrested. It still is enough to make crimes with virtual currencies look almost risk free.

Robert J. Samuelson of the Washington Post approves that the inflation of the Bitcoin, initially the excessive rise of the price, can be reasoned with growing popularity. 2600 venues accept the coin as payment method; new merchants are going to join the party in 2014. The success of the flagman supports less popular competitors and contributes to creation of new coins. Some ideas are really absurd – Dogecoin based on an Internet meme, Coinye exploiting the image of Kanye West and many others. The research prepared by Carlotte Lyton of the Daily Beast determined 71 types of coins on the web. Most of them are harmless and the biggest risk is to lose the invested funds. Nowadays it is very humble in comparison to other possible threats.

 Just type in any search engine You prefer Allahcoin. The developers call it a peer-to-peer Islamic currency. The creation definitely was rather easy. The Bitcoin protocol is an open source, and it is not a secret that the most coins online were built on it with few or even none alterations. The Litecoin is often called the silver to Bitcoin gold, and has only three main improvements – among them two determining - easier mining and faster transmitting. The main difference of the Allahcoin from other currencies is that for every mined block 10% are donated to the Muslim Brotherhood foundation. Once again – the coin does not carry any harm, but the purpose is an anonymous support of a very doubtful organization. Is official homepage describes the goal of the creation of the coin as following:

“One of the aims of Allahcoin was to provide a mining algorithm that could help financing the Muslim Brotherhood foundation. For each Allacoin unit produced 10% will be donated to the Muslim Brotherhood foundation to preach Islam, teach the illiterate, set up hospitals and promote sharia law worldwide.”

The preset amount of coins is 84 million currency units, the confirmation of transactions needs 2,5 minutes average. Some of the features indicate that the best features of Bitcoin and Litecoin were adopted by the initial developers of the Allahcoin.

The Muslim Brotherhood was founded in 1928 and is considered by the Egyptian and Russian governments as a terroristic group. It has a wide influence of the whole Arabic world, has supporters almost in any Muslim country. The link to more radical terroristic organizations has been proved. The self-description is following: “model of political activism combined with Islamic charity work”. The flow of uncontrolled donations is going to be hardly estimated. The machines and their mining power might provide lots of money to actions defined as terrorism.

   As the bonds of jihadists to the currency itself have to be determined, it already serves as a successful example for other illegal groups. Imagine - syndicates, terroristic organizations, rebels, pirates and prohibited political associations might raise funds with single witness – the Bloch Chain – fully anonymous, uncontrolled and without limits. Consider it as a type of criminal crowdfunding.

Mr. Jacobson describes also an alternative path of the so-called “weaponization of the cryptocurrency network.” His analysis proves that:

“some currencies are designed suspiciously similar to pump-and-dump schemes.”

The two-phase operation seems to be very simple, but rather harmful. The first stage of pumping is a creation of a coin with some purpose – investments, charity, game or anything else that has the potential to attract a wide range of users. The coin mined is already infected by a virus or provides a feature that might release and widespread a virus by pushing a single button. Once the society of enthusiasts of the coin is large enough, the developer might “activate a trigger” – the dump stage. The network of wallets will provide access to identities, accounts and other information. The data can be stolen, harmed, published, changed or simply collected for long-term use. In the most terrible cases it might lead to the harm of the wallets and hardware. Of course, privacy is very important in the modern world. A person definitely is interested in keeping his purchases, browsing history or photos secret, access and duplication is a crime, but harms a narrow range of people. The ability to access the machines of technical contractors, space, police and governmental agencies, huge servers of global institutions to erase, change or steal data. Important and vital network might be destroyed for undetermined terms. Ralph Langer provided Foreign Policy with an example – Stuxnet virus has been transferred to a nuclear facility in Iran. It could have had tragic consequences for the whole world and humanity.   

The chance that P2P currencies might become the medium of viruses and cyber-attacks is just a matter of time. The technology already has reached the necessary level, as similar peer-to-peer clients already contribute to criminal deeds – for example, eMule or Limewire. The question formulated by Mr. Jacobson requires actions, not answers:

  “The question is not if, but when the first attacks will occur, who will be behind them, and how much damage will they cause.” 


Hottest Bitcoin News Daily

For updates and exclusive offers, enter your e-mail below.