Cryptocurrency poses a societal threat; Blockchain, on the other hand, is poised to help transform outdated business models.
By Raj G. Asava
While it is a well-known concern that the mining process of cryptocurrency, like Bitcoin, will negatively impact our ecosystem by the carbon dioxide it produces, another threat that many are beginning to talk about is the ease with which it enables nefarious activities like blackmailing, human trafficking, terrorism and extortion.
Just this Independence Day weekend, a whole slew of ransomware attacks paralyzed the networks of at least 200 U.S. companies with demands ranging from $50,000 to $5 million in cryptocurrency-based ransom payments.
And not too long ago, we had front-row seats to the Colonial Pipeline hack that brought down the vital artery used to get gas and jet fuel to nearly 45 percent of the East Coast, shooting up gasoline prices for just about everyone across the country.
Darkside, the perpetrator of this hack, boldly demanded and received, $5 million in Bitcoin based on published reports, before Colonial was allowed to come back online. While this was a widely publicized hack, it is believed that Darkside collected $90 million in Bitcoin from 47 different victims in just nine months.
READ: Lure of Bitcoins: Greed blinds even the wise to risks (February 24, 2021)
The founders and promoters of cryptocurrency have all but brainwashed us that government and control are bad, and anonymity and ease of transfer of funds are good. With no intrinsic value behind it and no underwriting by any authority, cryptocurrency has ushered in a very unsettling chapter in the global economy.
The ease of transfer and conversion is appealing. However, the fact that hackers can now create, operate and participate in “ransomware as a service” platform, collect ransom and disburse it across elements that make up its system, and not get traced or caught, is a dangerous direction we are headed in.
The current financial systems are indeed archaic and need an overhaul. But giving in to anonymous voices who want to replace the current system with this very nascent technology would be like jumping out of the frying pan into the fire.
While the threat posed by a parallel uncontrolled currency model is highlighted here, in no way can we downplay the platform it uses, which is Blockchain. The potential of Blockchain is both far reaching and transformational.
READ: Digital assets management poses global challenge of the decade (February 10, 2021)
Every industry that deals with supply chain, validation of digital records and decentralized decision-making can, and will, benefit from the adoption of Blockchain. In fact, we should expect massive reengineering of businesses where Blockchain will be incorporated to empower decision makers across an enterprise with access to the single instance of truth: the right information, to the right person, in the right place, at the right time, and at the right price.
So, while cryptocurrency today still poses a societal threat and has a lot to be figured out, Blockchain is poised to be revolutionary in helping transform outdated business models to truly leverage the potential of technology in today’s distributed and digital age.
It is time for the public and private sectors to urgently work together to establish rules, regulations and infrastructure to transform business activities and processes over to Blockchain-based business models. It is also time to address, head on, the growing ransom threats on innocent businesses and bystanders, which is not just enabled but emboldened by the legitimizing of cryptocurrency.
(Raj G. Asava is an independent strategist and community volunteer.)