Ransomware is an unfortunate inevitability of an increasingly digital society, and it will only become more prevalent as more assets are stored in 1s and 0s. The price of Ethereum and others have so far been resilient in the face of this new form of digital theft – hardly shifting following WannaCry and now Petya (although the latter may have had a slightly different agenda). And as cryptocurrencies implement features which allow for greater anonymity (Ethereum intends to do just this following the release of Metropolis), the incentive to conduct further ransomware attacks will only strengthen. Despite the relatively tiny amounts stolen by these ransomware attacks (tens of thousands, as opposed to millions), the mere existence of such a sinister term goes a long way to supporting a mainstream narrative that “cryptocurrencies enable criminals”.
There are two major risks that Ethereum and the price of Ether faces today, many of which – if realized at a large scale – could be catastrophic for investors. These are:
- Platform risk – exploitable software bugs or major unforeseen roadblocks for scaling/development
- Regulatory risk – government interference and overreach
Of these two major risks, the latter seems to be most likely – at least in the short term – and one that ransomware plays into the hands of.
There will be calls to ban encryption
UK prime minister Theresa May notoriously called for a ban on “end-to-end encryption” following a spate of extremist violence. While there was no plan for exactly how to achieve such a ban, it somewhat cemented the idea that there would be government push back in the fight for individual sovereignty/privacy. Unfortunately for May’s supporters, encryption is based on mathematical truths which follow the fundamental laws of the universe. Anyone can anonymously encrypt a message or a digital asset if they are provided the right tools.
One day, it is likely that crypoassets like Ether will replace the US Dollar as the currency of choice for terrorists and criminals. As that day nears, a governmental attack on encryption may well begin brewing, justified by a mainstream misunderstanding of the value of digitized, fungible and private cash. Whilst it seems unlikely that such a ban would ever see the light of day, it is not impossible to imagine a short period in our history where which cryptocurrencies are pushed underground, generating further problems and justifying even heavier handed policies.
An alternative outlook on ransomware
Despite the emotive and destructive nature of ransomware, there is a positive outcome from its use. For many individuals and organisations, there is an irrational bias towards physical security over that of their digital assets. If a door to an office is left open, or valuable items are left on the backseat of a car, then “clearly” there’s a risk of theft. However, running a 15 year old operating system or using 8 lowercase characters as the password to your email is – to some – not clearly a risk at all. Ransomware is the “bug bounty” of hacking. Individuals are unwittingly rewarding those who discover holes in their digital security. It is ransomware that will force users to look at digital security in a new light, pushing forward what is a natural and necessary evolution of a digital society.