HBO’s hack­ers want to be paid in bit­coin; here’s why

Anonymity of dig­i­tal cur­rency makes it ideal for crim­i­nal ac­tiv­ity.

Austin American-Statesman - - BUSINESS - By Tali Ar­bel

The dig­i­tal cur­rency Bit­coin is the pay­ment of choice for HBO’s cy­ber­at­tack­ers. The hack­ers de­mand what they say is their “6-month salary” in bit­coin, sug­gest­ing it’s at least $6 mil­lion.

Bit­coin al­lows peo­ple to buy goods and ser­vices and ex­change money with­out in­volv­ing banks, credit card is­suers or other third par­ties. Although bit­coin isn’t widely used, it has strong ap­peal in some cir­cles be­cause trans­ac­tions can be made anony­mously. The cur­rency is pop­u­lar with lib­er­tar­i­ans, tech en­thu­si­asts, spec­u­la­tors — and crim­i­nals.

How bit­coins work

Un­like most cur­ren­cies, bit­coin isn’t tied to any bank or gov­ern­ment. Rather, the coins are cre­ated by users who “mine” them by lend­ing com­put­ing power to ver­ify other users’ trans­ac­tions. They re­ceive bit­coins in ex­change. The coins also can be bought and sold on ex­changes with U.S. dol­lars and other cur­ren­cies.

How much is it worth?

One bit­coin re­cently traded for $3,385, ac­cord­ing to Coin­base, a com­pany that helps users ex­change bit­coins. That makes it far more valu­able than an ounce of gold, which trades at about $1,265. The value of bit­coins can swing sharply, though. It’s up 33 per­cent in the past month. A bit­coin’s value plunged by 23 per­cent against the dol­lar in just a week in January.

Is it re­ally anony­mous?

Yes, to a point. Trans­ac­tions and ac­counts can be traced, but the ac­count own­ers aren’t nec­es­sar­ily known. That’s why it’s a pay­ment of choice among crim­i­nals, in­clud­ing the “ran­somware” hack­ers who crip­pled com­puter net­works around the world in May and June. The shut­tered un­der­ground e-com­merce site Al­phaBay re­quired trans­ac­tions to be done in bit­coin and sim­i­lar dig­i­tal cur­ren­cies.

Keep­ing bit­coins se­cure

The bit­coin net­work works by har­ness­ing in­di­vid­u­als’ greed for the col­lec­tive good. A net­work of tech-savvy users called min­ers keep the sys­tem hon­est by pour­ing their com­put­ing power into a

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