Like taxes, the forced use of bitcoin by victims of ransomware creates a need for at least some bitcoin. Ransom payers have to buy it from someone else, who either is in the energy-intensive business of mining it or speculates on its future value. So far, it hasn’t provided the foundation for broader adoption, not least because the dollar is far better for most people as a means of exchange and unit of account. But the ransomware provides a base level of demand, and plays the same role that taxes do in the traditional system.
Unfortunately for bitcoin, the hack of Colonial Pipeline’s systems went too far. Governments have realized that they need to get serious about tackling ransomware threats, while the Federal Bureau of Investigation’s recovery of roughly half the Colonial payment appears to have pushed hackers to other, more secretive, cryptocurrencies.
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