How does Bitcoin work? | Charlotte Observer

The ransom demand for $23,000 to unlock Mecklenburg County’s computer data illustrates two newish concepts you might only vaguely understand.

Ransomware is the term for malicious worms such as the one an unsuspecting county employee unleashed by opening an email attachment. Such tactics have targeted a growing number of businesses and institutions. In May, the WannaCry cyber-attack infected more than 200,000 computers in 150 countries.

Bitcoin transactions are private, so they are the favored payment method of cyber criminals, including those that targeted the county.

Here’s how Bitcoin works:

▪ Bitcoin is described as a “new kind of money” that works without banks or central authority – it’s essentially a digital cash network. Bitcoins, which can be used to pay for goods and services, can be purchased through exchanges, all without revealing personal information.

▪ Mobile apps or computer programs provide users a “wallet” with which to send or receive Bitcoins with other users. A public ledger called a “block chain” records all transactions, which by April were worth $20 billion.

▪ Bitcoin payments can be sent directly to a recipient’s wallet, which can belong to legitimate users as well as hackers.

“Some concerns have been raised that private transactions could be used for illegal purposes with Bitcoin,” Bitcoin.com says. “However, it is worth noting that Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems.”

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