Why the recent increase in Bitcoin value could mean bad news for Bitcoin investors
Since January 2016 Bitcoin has increased its value from just below US$400 to more than US$1000. At the time of writing of this post Bitcoin price is just over US$916.
Although it seems that recent increase of Bitcoin value is great news for the Bitcoin investors the true reason for the sudden increase in Bitcoin value demand should be examined.
There is a growing debate over the true value of Bitcoin. The oracle from Omaha, Warren Buffett, warned investors to , calling it "a mirage," saying that, while it may be a better way of transmitting money, the "idea that it has some huge intrinsic value is just a joke”. On the other end Marc Andreessen founder of the American VC Andreessen Horowitz has been a big supporter of Bitcoin and invested some of its portfolio in Bitcoin related projects.
Without entering into this titan discussion I would like to offer my humble explanation to the recent increase of bitcoin value.
Recently I have been hearing from clients and friend that they themselves or someone they know have been attacked by ransomware and are required to pay their attacker in Bitcoin.
Frequent question by ransomware victim is “where do I buy Bitcoin”? The fact that victims of ransomware hurry to pay their attackers is not surprising. According to seventy percent of businesses hit by ransomware paid the hackers to regain access to systems and data. Of those attacked, 20 percent paid over $40,000 to retrieve data, while more than half paid more than $10,000. Recent reports show that cyber criminals are expected to earn more than $1 billion from ransomware campaigns in the coming year.
Since Bitcoin is the preferred method of payment by ransomware attacker, the recent increase in ransomware attacks might explain the increase demand to Bitcoin and its increasing value.
Bitcoin is a very effective way of transmitting money anonymously . However, if Bitcoin will be labeled as the official “extortion currency” then its days are numbered before regulation 'puts it to sleep'.
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