BadgeChain Newsletter #6 – Blockchain, Bitcoin and Ransomware

May 18th, 2017 | Carla Casilli

This past week saw a massive and outrageous ransomware attack that hit the UK National Health Service and other organizations around the globe. The hackers behind the WannaCry virus did something somewhat unexpected: they didn’t ask one hostaged organization to pay a ridiculous sum of money. No, they asked many hostaged organizations and individuals to pay relatively small ransom amounts in bitcoin. Why bitcoin? With the current state of cryptocurrency wallets, it’s allegedly untraceable, so the thieves believed that they could get away clean.

Yet, even with the small asks of around $600 in bitcoin, it seems that not many folks paid up. Smart software backup and recovery practices played a role in limiting damages. But the reason for non-payment may have been a good deal simpler: bitcoins are confusing to the uninitiated. It can be difficult and time-consuming to set up a cryptocurrency account and select an exchange, let alone raise large amounts of bitcoin. Consequently, while this ransomware attack wreaked nasty havoc on its victims, it failed pretty hard financially. Future ransom requests may prove more effective, though, as it appears that some companies are now stockpiling bitcoin in preparation against ransom demands.

As the price of bitcoin shoots past $1800 (with some calling for it to hit $3000) the interest in exploitation rises—as does interest in control and governance. Consequently, this type of attack only serves to heighten the possibility of regulatory concerns and governmental oversight. Indeed, a report by the European Parliament provides recommendations for “anticipatory policymaking” regarding several aspects of this protean currency including eliminating the anonymity current wallets afford. Stay tuned!

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Here are the articles that inspired and informed this newsletter. We recommend them to you as interesting data points in your consideration of education and decentralized technologies.


BadgeChain Newsletter #5 – Blockchain: can you trust it?

May 4th, 2017 | Carla Casilli

Trust: one of the primary reasons for the invention of blockchain. Or rather, lack of it. Blockchain’s revolutionary trustlessness, to coin a word, is peer-based. Interactions occur between peers without intervening persons or organizations. But trustlessness is both an awful word and only a rough approximation of the concept. Why? Because blockchain technologies actually reorient existing trust relationships into person-to-person exchanges. Most impressively, they do this at a global scale thanks to basic technical constructs that include decentralization, nodes, distributed ledgers, and immutability.

As previous BadgeChain newsletters have noted, along with financial tech (fintech), healthcare, media, credentialing, and law are fields in the throws of blockchain investigation. Some of this exploration may be driven in part by security concerns related to data breaches. This past year saw an unprecedented number of successful attacks on financial institutions, hospitals, and individuals, among others. Could blockchain be the way to secure data, finances, health records and media? Aspects of its structure can act as a repellent to network breaches: if any one block changes, the entire node structure knows. Data consensus can act a powerfully protective control mechanism.

Somewhat ironically, doubts about blockchain as an entirely trustworthy tool are also manifest. In the fintech world, the Dao disaster intensified fears about hard forks and algorithms that operate without human intervention. Bitfinex, one of the largest cryptocurrency exchanges is under suspicion of a Mt Gox debacle. And although bitcoins, the most prominent blockchain fintech, have reached an astounding $1400+ valuation, observers are unsettled about how much to trust the rules governing allegedly immutable data, particularly when the currencies can be drained unwittingly, traditional financial institutions are developing their own private chains, and ledgers appear to be at the whim of whoever technically “owns” a blockchain. These issues will need to be addressed if blockchain technologies are to continue to have a viable future.

Nevertheless, the evolution of peer-based trust is ongoing. Blockchain technology bolstered by the potentially radical ideas underpinning it are fomenting that change. According to one report, we may now be in the “third trust revolution.” An intriguing thought.

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Here are the articles that inspired and informed this newsletter. We recommend them to you as interesting data points in your consideration of education and decentralized technologies.