Similar to all things new, innovative, and possibly world-changing, there will be people out there who will take advantage of it.
Cryptocurrency has step out the shadows for some time now, but there are still a lot of people trying to wrap their heads around the idea of virtual money.
This confusion, combined with the advantages of cryptocurrency offers – flat fees, pseudo-anonymity, and transparency – has led illicit organizations to leverage the new form of technology.
Perhaps the most damaging thing that cryptoccurency is associated with is an online black market called the Silk Road. This website has already been shut down by the FBI, but the intelligence and security service admits the task was a tall order when it first grazed their table.
Founded by Ross William Ulbricht, Silk Road is a website selling multiple illegal substances with vast listings of it. It’s estimated that there are over 13,000 illegal drugs being sold on the site including psychedelics, opioids, ecstasy, and many others.
There were two things that made it difficult for feds and the NSA to track down who’s operating the online black market.
First is a network called Tor, acronym for “The Onion Reuter.” Tor is a network that helps an individual be anonymous on the web to government organizations that are tracking illicit activities on the net.
The Tor Network hides your identity by transferring your traffic across multiple Tor servers, encrypting that traffic so it wouldn’t be linked to you. Those who are trying to trace you would see the traffic coming from random nodes on the Tor network instead from your computer.
Second is the use of cryptocurrency to pay for the products on Silk Road. While it’s to be noted that cryptocurrency doesn’t necessarily provide full anonymity as transactions can still be viewed at its transparent ledger, the combination of both digital currency and the Tor Network is what really complicated the whole thing.
Fortunately, after months of grueling tracking, the FBI was able to shut down the site two years ago, and was able to shut it down again when Silk Road 2.0 appeared on their radar the same year.
There’s also another illegal activity that’s been recently halted, though it is of smaller scale compare to our above example. Ryan Ramminger and Equiliv Investments settled a $50,000 fine with the U.S. Federal Trade and Commission and New Jersey Attorney General for tricking consumers into downloading malware and spyware into their smartphones which came in the form of an app named Prized.
The app was able to mine second-tier crytocurrencies such as Litecoin, QuarkCoin, and Dogecoin. The unsuspecting victim experienced severe downgrade of their device as the app leverage the smartphones computing capabilities.
Batteries drain faster, slow charging, and increasing the victims’ data consumption of their mobile monthly plan subscriptions were among the headache that they’ve experienced.
These illegal activities are painting cryptocurrency with a darker shade. Combine that with people’s suspicious nature and the complexities surrounding digital currency and many will assume that this technology is causing more harm than good.