The value of Bitcoin may be looking slightly shaky at the moment, but it’s still worth well over 500% more than it was a year ago. And, according to a cybersecurity expert, it’s time we dispelled with a myth about the digital currency. We re-evaluate why the world’s best known cryptocurrency may be so prone to fluctuations like the unexpected Bitcoin price surge witnessed this week.
One of the criticisms that has been repeated time and time again over recent months is that Bitcoin’s price is being propped up by criminals. Or that, as is currently the case with Bitcoin suddenly surging from $7000 to over $8000, that crime is somehow behind its price fluctuations.
If it wasn’t for the fact it enables people to buy drugs, weapons and all sorts of other illegal goodies anonymously on the Dark Web, the argument goes, Bitcoin wouldn’t be worth anywhere near as much as it is right now. Nor would it be so volatile.
But Raj Samani, Chief Scientist at McAfee, disagrees.
“The reality is that Bitcoin is being less and less used as currency for criminals underground,” he said, speaking at McAfee’s 2018 Consumer Labs Day Paris, which Trusted Reviews attended.
Instead, criminals favour more privacy-focused cryptocurrencies, such as Dash, he told us.
What’s more, Samani argues, we can’t blame cryptocurrencies for fuelling cybercrime. Several high-profile ransomware attacks, in which the hackers asked for payment in Bitcoin, have helped give cryptocurrencies a bad name, but this should be seen as a natural step rather than a danger sign.
“Blaming cryptocurrencies as a vehicle for the evolution of crime is like blaming cars for bank robberies,” Samani says. “It’s crazy. Yes, cars are used for bank crimes but they’re used for a lot of good as well. Where there’s money, there’ll be crime. As we move digital, so will criminals.”
Something he doesn’t have time for, however, is cryptojacking. According to Samani, cryptojacking incidents – in which cryptocurrency miners try to make money by sapping website visitors’ computer processing power – are becoming more and more of a nuisance.
“This for me is one of the biggest growth areas, certainly over the last six to 12 months,” he says. “As the price of Monero goes up, you see the number of miners increase. As the price of Monero goes down, the number of new miners goes down. It literally is like that, and there’s only about a week of lag between the two. So when the price goes up, a week later the miners go up.”
He’s also unconvinced by the argument that cryptojacking is a legitimate alternative to advertising.
“It all comes down to consent,” he continues. “If I can use your computer to mine cryptocurrency, is that OK? I think that’s the differentiation. If you say yes, that fine, but if you say no, then that’s criminal.”
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Instead, we can more likely attribute the sudden surge in Bitcoin’s price in America’s impending Tax Day 2018 (Tuesday April 17). Rather than blaming everything on criminals, wouldn’t it make just as much sense that many Bitcoin-savvy Americans have now filed their taxes, and therefore have the peace of mind to invest again?
Perhaps. Another popular theory links this week’s Bitcoin price boom to geopolitical machinations. This line of thought holds that US tariffs on China and the threat of American military action against Russia (by way of Syria) saw the Russians and Chinese flocking to secure their assets in Bitcoin.
Both are possibilities, and both are reasonably tenuous.
We’ll probably never know for sure just why Bitcoin is so volatile, but thing does seem certain. When it comes to Bitcoin’s wild price movements, it’s not just criminals to blame.
The world’s still-dominant superpower, America, still carries a bit of weight as well.
Do you think the so-called ‘Bitcoin bubble’ has burst? Share your thoughts @TrustedReviews.