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You’re About to Be Held to Online Ransom

The Hollywood celebrity photo-hacking scandal continues to rumble on…

Entertainment news shows are breathlessly reporting the shocking breaches of privacy.

Armies of lawyers have been summoned to deal with whoever is behind these crimes.

The outrage is palpable.

Now, I know what you’re thinking. Heck, I bet almost everyone has thought it…

Why do these celebrities have compromising photos of themselves, anyway? I mean, 99% of the general public doesn’t have nude pictures of themselves.

And what are these celebs thinking in stashing these highly personal images in the “cloud,” not knowing where they are, or who has access to them?

As my colleague, Floyd Brown, recently noted, our dependence on digital data storage leaves us vulnerable to perverted attacks.

However, while everyone focuses on the controversy, they’re missing even worse digital attacks happening right now…

Digi-Man

Hear the name “McAfee,” and you associate it with one of the leading names in computer software protection and anti-virus, malware, and spyware programs.

Unsurprisingly, the man behind it – Andrew McAfee – is a pioneer of digital technology.

His research has helped us better understand the impact of an increasing amount of data in our society.

He’s written several books on the subject, including co-authoring my personal favorite, Race Against the Machine: How the Digital Revolution is Accelerating Innovation.

He even coined the popular phrase “Enterprise 2.0” in a 2006 interview.

But perhaps his most impressive disclosure came in a June 2014 article, where he revealed an absolutely mind-boggling statistic…

What the Heck is “Datawater,” Anyway?

McAfee took all the world’s digital data (in the form of zettabytes) and converted it into water. Why?

He wanted to put the amount of data into perspective by comparing it to something tangible that we all can relate to.

He called it “datawater.”

As it turns out, the total amount of “datawater” would cover every inch of our Earth.

And get this: The volume of datawater would be 84,417 meters, or 276,000 feet.

Consider that Mount Everest is 29,029 feet high… meaning that the amount of datawater would pile up nearly 10 times higher.

And keep in mind… McAfee was basing that on data statistics from 2007 to 2013. So given the rampant growth rate, it’s safe to say that this figure is only going to shoot even higher from here.

The equation is simple: More data = more attacks.

Welcome to the 21st Century Ransom Letter

One of the most widely used digital attacks today is “ransomware.”

This nasty type of malware restricts access within the computer it infects, and often cripples it entirely. In other words, the malware essentially holds your computer hostage, and the devious cyber thugs behind it promise to restore your access once you pay them a ransom.

It’s nothing more than a scam, of course, designed to frighten you into paying them money.

For example, one hacker might encrypt the most important files on your hard drive – a method known as “cryptoviral extortion.”

Another hacker might lock your entire system – screen and all.

Until you get expert help to remove it, the only words that will ever appear on your monitor will be a list of demands. Some have scary, official-looking documents and language that accuses you of committing online crimes… but your computer will be unlocked as soon as you pay up.

Welcome to the 21st century ransom letter – and they’re occurring more often these days.

What’s more, many people fear the worst is yet to come…

Digital Extortion on the Rise

Consider this…

In 2002, ransomware accounted for just 0.2% of cyber attacks. This year, that number has leapt to 25%.

In Russia, the growth is even more troubling. In 2013, there were 250,000 instances of ransomware in the first quarter alone. That was a 100% jump over Q1 2012.

And these attacks are happening in the strangest places – especially in the United States, where cyber criminals are holding patient medical records hostage. Take these headlines, for example…

Hacker Headline #1: “A Hacker Attack That’ll Make You Grind Your Teeth”

In August 2013, an unnamed dental practice fell victim to cryptoviral extortion by a group of Eastern European hackers.

The group’s malware found all the digital x-ray images in the practice’s computer system. It then encrypted the files and demanded a ransom of $500 worth of Bitcoins. Once paid, the hackers promised to unlock the images.

And if you thought a toothache was painful enough, the ransom payment would rise by $500 for each day the dentist didn’t pay the ransom.

Hacker Headline #2: “Why Would Chinese Hackers Steal Millions of Medical Records?”

A veteran team of Chinese hackers, secretly referred to as “APT 18” by the detectives chasing them, breached the firewalls of Community Health Systems, a hospital chain based in Franklin, Tennessee.

When Community Health Systems reported the details of the theft, one thing struck officials as odd…

APT 18 typically targets bigger fish, such as big pharma prescription drug formulae, or the blueprints for medical devices. Essentially, any highly valuable healthcare intellectual property.

However, in this case, APT 18 only walked away with the names, addresses, and birthdays of Community Health’s patients.

Oh… and their social security numbers. And over the course of five years, too!

So while it wasn’t intellectual property, this hack nonetheless represented a big score, as medical records prove very valuable when it comes to identity theft.

So how have hackers pulled off these heists?

The Hackers’ Go-To Digital Weapons

Basically, hackers have relied on two major malware viruses…

CryptoLocker: This method netted over $3 million in a short time. It boasted very complex infrastructure, particularly in the “payment structure” it laid out for victims. Bitcoin was used, as well as Green Dot MoneyPaks – prepaid cards that are sold at over 50,000 stores in the United States.

CryptoWall: This malware represented quantity over quality. In other words, while it was effective, the program had many technological shortcomings. Chief among them was the fact that the virus didn’t facilitate payment options. So while it had a much higher breach rate than CryptoLocker, blasting more than 625,000 computers, its haul was significantly less – around $1.1 million.

There were several other subtle differences between the two ransomware viruses. For example, CryptoLocker foraged for a computer’s important documents, while CryptoWall encrypted personal files like pictures, MP3s, and videos.

These viruses were eventually eliminated, but the nature of the cyber attack game is that for every nasty virus and malware flushed out, several others always pop up.

Needless to say, as we generate – and store – ever-increasing amounts of digital data, this poses a serious problem.

The world demands more secure data storage – a demand that will only become more pressing in the coming years.

Stay tuned for my next article, where I’ll profile a company that’s addressing this critical cyber security need – and run it through my C.H.A.O.S. stock screener.

Your eyes in the Pipeline,

Marty Biancuzzo

Marty Biancuzzo

, Technology Analyst

View More By Marty Biancuzzo