Launched in 2014, the cryptocurrency Monero (XMR) aims to improve on the existing digital currency design by obscuring transaction details such as , amount and sender/recipient details.
In simple terms, this cryptocurrency is all about anonymity. Hidden details are however not the only attraction it may have, Monero(XMR) is also made attractive by an egalitarian approach to cryptocurrency mining. In recent times, influenced partly by market volatility, the two strong points have started to become somewhat of a sore point of the currency. An increased interest from cybercriminals following the cryptocurrency price increase in the last quarter of 2017, resulted in a spike in crypto highjacking.
The bad actors, however , were also faced with some problems. The volatility of the Bitcoin market made things stickier for those using ransomware. The ransom costs could be hard to predict at the time of infection and the transaction costs could be high. For those involved in mining, the process became exceptionally difficult. This resulted in the aforementioned increase in transaction costs and this was especially true of Bitcoin (due to the high hash rate it boasts).
In most, if not all instances, persons participating in cybercrime are looking to get the highest returns for the least risk, in the shortest time. All the difficulties mentioned above made Monero a very appealing choice over the more popular Bitcoin. One could even assume that Bitcoin’s popularity alone could deter some wrongdoers. I mean…..people who couldn’t care less about cryptocurrencies or blockchain technology for that matter, have come across the name Bitcoin by now.
The roadmap to Monero, this is how we got to where we are now. As we all know, cybercrime did not start as a result of cryptocurrency. It has been with us since the beginning of the internet age, criminals have simply adapted to suit the changing times. In the “good old days”, back in 1996 to be precise, E-gold came on to the scene. It quickly gained popularity among web criminal circles, especially carded groups(criminal operations dealing in stolen credit card information). This was due to nonexistent verification of accounts.
E-gold’s popularity would, however, lead to its demise. About a decade after its creation, the FBI shut down the operation, but the show must go on. Sometime around 2005, criminals in search of an alternative started drifting towards Webmoney. Unfortunately for them, Webmoney modified business practices to prevent criminal activity and it was, for the most part, a success.
This was soon followed by a shift in villainous attention to Liberty Reserve. This too did not last long as the institution’s founders were almost immediately arrested and a total of $6 billion (USD) in criminal money was lost when the company’s assets were seized in 2013. With all that had happened, the cyber-underground was desperate. Then in 2009, along came Bitcoin, a decentralized saviour of sorts. The pseudo-anonymous nature of the payment system and the lack of a centralized power within the blockchain network made cryptocurrency a viable option for hackers.
But it was only in 2013 that criminal interest in cryptocurrencies reached a clear fever pitch. Late in that year, a major ransomware operation called Cryptolocker added an option for victims to pay in Bitcoin. Naturally, this got the copycats to start really meowing in a frenzy. As time went by, criminals evolved their methods in search of new ways of getting their grubby claws on crypto-coins. This led to a rise in the use of malicious mining software, which is discretely planted onto victims devices, via infected adverts and dodgy links.
Fast forward to 2018 and most of that malicious software is designed to mine Monero. When it comes to Bitcoin, secrecy was never really the main focus. Following the popularity among bad eggs, it was only a matter of time before the feds came knocking on crypto’s door. That makes a currency like Monero attractive to criminals. Earlier this year it was reported that hackers used Jenkins CI, a java based open source automation server to deploy malicious mining software that is said to have netted them (USD)$3 million(approximately ZAR 36 million).
As far as malicious mining software is concerned, a hashing algorithm like that of Monero is very appealing as it is ASIC(Application Specific Integrated Circuit) resistant. ASIC mining, in the eyes of more than a few, may add an element of centralization to blockchain technology. The anonymity-focused Monero hard forked on the 6th of April this year, with Riccardo Spagni(Monero’s creator) saying on Twitter,”Monero did the thing with the thing”. Considering that the hard work was a direct shot at Bitmains Antminer X3, Spagni and friends might have unwittingly done “the thing with the thing” in favour of criminality.
In a nutshell, Monero’s focus on privacy and the ASIC resistant nature of the algorithm have made it very attractive to malicious players.