“Botcoin” Mining & the Big Business of Virtual Currencies

Actimize FMC Product Team, Financial Markets Compliance

It was only a matter of time until we started to see a morphing of botnets with Bitcoin … so now that we have, I’d like to formally coin (yes, that pun is entirely intended) the new phrase “Botcoin”. (Actually, I can’t coin it since since Botcoin has been used multiple times before.)

Today, most security vendors and researchers estimate that there are hundreds (if not thousands) of stable, strong, and heavily-utilized botnets in existence – and now they are integral to the Bitcoin realm.

Bitcoin’s heavy reliance on sophisticated mining technology and some companies now even making chips specifically for Bitcoin mining, it shouldn’t shock anyone that a Bitcoin-focused botnet would get constructed.

If you think back to the let’s-combine-lots-of-small-computers-to-do-good-things plain-vanilla botnet category that became so prevalent in the late 1990s, with technology such as running screensavers to conduct academic or medical research, this technology concept then became ubiquitous in the malware-infestation-and-spreading side of things.

Additionally, talk of renting botnets has been around for a long time, and is nothing new, but this application to Bitcoin mining is particularly unique.

Knowing that such botnet renting capabilities exist, it would be interesting to construct a financial model that determines whether or not renting botnets to rapidly mine Bitcoins would be logically viable? My suspicion is that this has already been considered in light of the considerable discussions on the various Bitcoinrelated forums. But, I’d also hazard a guess that the finances don’t stack up and that using a public cloud like AWS also wouldn’t make sense from a Bitcoin mining point of view.

Knowing that Bitcoin mining can be an intensive process requiring a great deal of horsepower to do in any substantial and significant manner, it shouldn’t shock anyone that this sort of thing is being attempted. As various Bitcoin spokespeople (including the Winkelvoss Twins on CNBC in November) have mentioned, most observers believe that Bitcoin mining is no longer truly achievable for the average consumer, but rather has in itself become big business as virtual currencies go mainstream and attract increasing attention from central bankers, U.S. Senate Committee hearings, treasurers, and others. Oh yeah … and as their price fluctuates, the Bitcoin “bubble” has to support the weight  of speculators looking to make a quick “bit” – I mean buck.

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