Backgrounder: What is bitcoin?

Updated 2017-05-18 16:01:12 Xinhua

A large scale ransomware computer virus known as WannaCry broke out on May 12 to take hostage of computer files, affecting some 150 countries globally.

The ransomware has locked up their data with a message to demand a ransom payment of digital currency bitcoin worth from 300 U.S. dollars to 600 dollars. The following is a brief introduction to bitcoin:

Bitcoin is a digital currency invented by Satoshi Nakamoto, the pseudonym of an unknown programmer or a group of programmers.

The digital payment system was released as open-source software in 2009. Thus bitcoins, basically lines of computer code, are not issued by a bank or a government.

The owners of bitcoins can use the digital currency to buy goods or services, or change into real currency, if people and businesses accept bitcoins for payments or exchange.

The value of bitcoins fluctuate swiftly. A year ago, one bitcoin was worth some 457 U.S. dollars, while it recently traded for 1,825 dollars, according to Coinbase, a company that helps users buy and sell bitcoins.

Bitcoin is pseudonymous, which means that funds are not tied to real-world entities but rather bitcoin addresses.

The digital payment system is peer-to-peer and transactions take place between users directly, without an intermediary and can be made anonymously. That's why cyber attackers prefer to choose the cryptocurrency for hacked computer users to pay the ransom.

The transactions are anonymous but traceable, because all the transactions are stored in databases called blockchains and people can monitor bitcoin addresses and see how the "money" moves.

Less than 70,000 U.S. dollars has been paid in the recent ransomware cyberattack, White House Homeland Security adviser Tom Bossert told a daily briefing on Monday.

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