The real casualty of the WannaCrypt cyberattacks is bitcoin

The real casualty of the WannaCrypt cyberattacks is bitcoin. If the vendors had done the right thing from the start, then they would have offered a process to go through the blockchain records and recover value from bitcoins stored at various services which was derived from ransomware, reissuing them as “proven clean” coins. Even if a Bitcoin banker decides to take a million coins and put them into a transaction to issue a million new coins, the transaction record is still on hand and it is still possible to calculate exactly how much of each new coin is ransom money. If reputable vendors dealt only in “clean” coins, making a process to forfeit ransoms, then before long everyone taking Bitcoins would have an interest in covering themselves by knowing where they are coming from in case of them being stolen or extorted property.

But since Bitcoin didn’t do that, I predict that Britain’s spy-dominated government is not going to be nearly so understanding, and the U.S. will follow their lead. I think it is only a matter of time before they say that if a Bitcoin’s blockchain contains even a single extorted coin, the entire coin is forfeit. I think the moment they announce this policy, Bitcoins are going to crash in value and the whole thing is going to come close to falling apart. That said, it is possible that someone can mount a last-ditch defense of the institution — provided they have a way to assure the average member of the public that his first and only transaction in Bitcoins won’t be paying a ransom! Otherwise, expect total prohibition.