Bitcoin and Why Hackers Use It As Their Go To

Bitcoin and Why Hackers Use It As Their Go To

Why do most hackers demand bitcoin? Why not cash in their associated currency?

In order to best explain Bitcoin I think it will be easiest to go through a series of hypothetical analogies that if you can understand will explain Bitcoin.

1) Is Bitcoin something physical?

If I agree you have $50, and you agree you have $50, and everyone else agrees you have $50, then you have $50, right? You don't physically need $50 on your person if everyone and their mother knows you to have $50. Let's continue with this hypothetical and say that you go to the store and buy something (because after all, everyone KNOWS you have $50). You buy something for $5, the cashier runs the transaction (because even they know you have $50). The cashier then states you have $45 dollars now and updates that information in their computer so that the rest of the world knows you have $45. With the invention of debit cards isn't this really how our financial system currently operates anyway. Sure you can still use a physical 5 dollar bill to represent the fact that you own $5 but with debit cards isn't it more financial institutions that attest you own $5? Using this hypothetical you can easily start to understand why Bitcoin isn't physical necessarily and why it doesn't really need to be.

2) How does Bitcoin keep me anonymous?

Now that you understand the first hypothetical, imagine that financial institutions didn't have your name on the debit card or on your back account. Anyone with that debit card could make transactions on your behalf. In this manner even the US Dollar could be anonymous if this was the case. If you start to think about prepaid debit cards and imagine them handed out like money, you can start to understand how you could maintain anonymity with your transactions.
Back when using physical money was a thing this was actually pretty simple, you just handed someone money in a back alley for something you didn't want anyone to know you owned, if showing your face was a concern you wore a mask or had someone else buy it for you. In today's information age however, how do you do the equivalent online?
If you bought a prepaid debit card with a prepaid debit card purchased from a friend using a prepaid debit card who bought it from someone in a back alley using a prepaid debit can start to see how tracking this back to someone would get a little messy. Especially if at no point you tied your name, social or other identifying information to any of the purchases. Seems like an awful lot of work though especially when Bitcoin simplifies this process.

3) What is the Blockchain? Who keeps track of the fact that I own Bitcoin?

This is kind of the bread and butter to Bitcoin, and most Cryptocurrencies for that matter (Cryptocurrencies is a fancy term for all digital Bitcoin style currencies). We've already explained why Bitcoin doesn't need to be physical, but if we tie Bitcoin to a central institution for vetting transactions it loses its luster because now we're basically just back to another form of the US Dollar or debit card. Well the solution is easier than you might think, let's just give everyone who uses Bitcoin a copy of every transaction ever made. Then when a new transaction is made, the parties involved announce that they've made the transaction and everyone else updates their transaction logs after confirming with a few other parties that the transaction was even possible (did both parties have the appropriate funds).

That's Bitcoin, there's actually a lot more to Bitcoin but to go much further into it would really just be getting into fun nerdy stuff when in reality the above is a decent enough explanation to dive into why it has been and can be used for less legal transactions. If the transaction can remain anonymous, and tracing it to the appropriate party is extremely difficult and in some scenarios practically impossible it is the perfect currency for: ordering drugs online, requesting an assassination anonymously, online gambling, or holding a computer ransom.