In case you haven’t heard about the term “cryptocurrency” yet, I would like to tell you about this “internet of money,” or IoM. Cryptocurrency is an encrypted decentralized digital currency exchanged through blockchain with a process called mining. Bitcoin, for instance, is the first successful cryptocurrency. Digital currency is ideal for traders who don’t want to rely on central authority.
If someone owns some bitcoins, he can make transactions with them by broadcasting a signed receipt to where the coins are being sent. The transaction is later added to a pool of unchecked transactions. Miners will validate the transactions on blockchain with constant hashing — this requires a lot of computational power.
While an individual can mine the currency, it is not profitable due to less efficient hardware. Cybercriminals circumvent these costs by using hacked devices and computers for mining. This job cannot be completed with single computer as it requires lot of processing power. Therefore, the cybercriminals cluster computers together and form a botnet. Botmasters, those who run botnets, can target IoT with their malware.
Different varieties of cryptocurrencies have unique ways of being obtained. Take an instance of bitcoins, for example. You can obtain them in two ways:
- Buying bitcoins online via vendors, or
- Getting bitcoins through mining.
Buying from vendors is the simple, straightforward method. Once you pay the seller, the coins will be transferred to a personal wallet.
Mining involves a blockchain, a shared public ledger that includes all the information about past transactions. A computer can be used to locate the next block on the chain; this process requires hashing. Whenever a new block is located, a few bitcoins are generated and added to the finders’ wallet along with the transaction fees made by other users.
Components that complete the cryptocurrency
Coins — There are different coins in cryptocurrency that use some modified names. For example, Bitcoin uses bitcoins, Ethereum uses Ethers and Ripple uses XRP.
Wallet — Every cryptocurrency applies some type of a wallet where coins are stored. These wallets have a public address and a private key. The purpose of the public address is to provide someone coins, while the private key is used to verify transactions being done through an address with asymmetric encryption.
Blockchain — Blockchain is the technology or mechanism most cryptocurrencies depend on. It is a public ledger that has the record of all past transaction data. To find the next block of the blockchain, lots of luck and hashing power is needed.
Complexity — The Litecoin and Bitcoin blockchains change the complexity of locating the next block. The complexity is set in such manner that it takes nearly 10 minutes to get the next block. A transaction remains uncounted until several new blocks added on the chain. This slows down the trading of bitcoin.
Hashing — Hashing is a method to find the next block of a blockchain and varies per currency; every digital currency applies some sort of hashing algorithm to locate the next block on the blockchain. Bitcoins apply SHA-256 algorithm of hashing while Litecoin uses scrypt. Mining these cryptocurrencies requires a certain and different amounts of processing power with IoT and big data, along with different hardware.
How IoT botnets influence the cryptocurrency
Hashing power is needed to mine cryptocurrencies. The user with more hashing power can enjoy more processing power. In other words, having a stronger computer and good hardware will hash more than a weaker or older one. However, more computers will impact the amount of hashes done per time unit. This is why user needs to check that botnets composed of personal computers should use their processing power for mining.
The price of cryptocurrencies will be boosted if more coins are being mined. However, older cryptocurrencies, like Bitcoin, hardly get any affect from IoT botnets as they already require a huge amount of processing power. Younger coins, however, have higher chances of getting affected by botnets.
Botmasters can program their IoT botnet to perform distributed denial-of-service (DDoS) attacks, send spam email and steal personal data. All these things can create good income for the botmaster; however, they are not necessarily all good methods:
- DDoS — IoT botnets are empowered to execute DDoS attacks. Since they have a greater number of different devices and are located across legitimate devices, it is difficult to deal with them. These attacks require minimum processing power as they are used to send data over the internet.
- Spam — The amount of spam email today is continuously declining due to spam protection. This is why botmasters find spam email less attractive than other attack tools.
- Stealing personal data — Regular botnets are expert in stealing data and credentials. However, IoT botnets are not among them as they are not connected to users’ hard drives.
So what do IoT botnets mean for cryptocurrencies? In the end, we can all have valid points that explain why botmasters will rarely apply their IoT botnets to mining cryptocurrencies.
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