As the world of cryptocurrencies continues to grow exponentially, Distributed Denial of Service (DDoS) attackers have a new set of targets, namely the exchanges that power cryptocurrency trades, as well as the computer systems used to ‘mine’ cryptocurrencies.
This is according to Bryan Hamman, Arbor Network’s territory manager for Sub-Saharan Africa, who says that the cryptocurrency craze has attracted millions of people around the world. “But unfortunately, it has also attracted the DDoS criminal underworld, as they look to cripple currency exchanges and potentially steal the valuable coins passing through these platforms. “We see a number of worrying cases where DDoS attacks have disrupted the flow of trade on major cryptocurrency exchanges – including the likes of Bitfinex, Bittrex and Poloniex,” he says.
What are cryptocurrencies and blockchain technology?
Cryptocurrencies are essentially virtual currencies that enable individuals and businesses to store and exchange value, without the need for traditional money (so called ‘fiat currency’) and traditional banking infrastructure. While the most famous cryptocurrency is Bitcoin, there are a number of other similar currencies in circulation. They can be exchanged for fiat currency – like US dollars or Rand – on exchange platforms.
Bitcoin and its peers represent a radical departure from the traditional construct of money – which has always been tightly-controlled by national governments (via central banks and very influential monetary policies). Cryptocurrencies are entirely virtual, and completely borderless, while – to a large degree – remaining outside the ambit of policies and laws.
Cryptocurrencies like Bitcoin rely on blockchain technology to operate. To provide a succinct definition, blockchain is a decentralised public ledger that records transactions across multiple computers, so that there is no single record of any transaction. In this way, information is distributed across the network, meaning that nobody is able to tamper with the record of transactions.
Towards the end of 2017, Bitcoin hit mainstream news headlines, surging in value to over $20 000 per ‘coin’. While it has since normalised back to roughly half of that value, the frenzy of excitement over Bitcoin saw many exchanges being flooded with traffic.
In fact, many of the exchanges struggled to handle the massive volumes of people looking to get into the Bitcoin craze. And to make matters even worse, DDoS attackers started to target these exchanges, placing even more pressure on the platforms.
Hamman explains: “DDoS attackers use malware installed on thousands – even millions – of different PCs and other connected devices, essentially hijacking their resources to flood a the targeted exchange’s servers with massive volumes of traffic. “Just like a DDoS attack on any other organisation, these assaults can pull down an exchange’s online systems, bring workflow and mission-critical processes to a halt, disrupt the trades between users, as well as causing untold reputation damage for the exchange.”
“There is also another DDoS-type technique within the cryptocurrency ecosystem – one that’s even stealthier, and certainly more difficult to prevent – which is causing concern among the crypto community,” notes Hamman. He explains the growing trend of cybercriminals installing crypto-mining tools on victim computers (instead of traditional DDoS malware). This allows them to hijack the resources and systems of the host computers, to power illegal cryptocurrency mining operations.
While the term ‘mining’ may be something of a misnomer, cryptocurrency mining refers to the act of verifying Bitcoin transactions on the network, adding public records to the ledger and ultimately making the records as accurate and indisputable as possible. As a reward for doing this service, miners receive a certain value of bitcoin, which is ‘unearthed’ by the system.
“While bitcoin mining has emerged as a very specialist field, and is of course perfectly legal, the problem we’re seeing is DDoS syndicates shifting their behaviour towards illegal bitcoin mining, “This destabilises the cryptocurrency ecosystem in general, and raises concerns about using blockchain-like technology for other use-cases.”
Hamman is referring to the likes of blockchain-enabled smart contracts and supply-chain innovations which could radically change the way that business value chains and relationships are conducted in the future. “It’s important for cryptocurrency exchanges and professional mining outfits to quickly get on top of the problem, with specialised DDoS prevention tools.”
He points to Arbor’s recent foiling of an attack of almost two terabytes per second, a massive traffic volume that would certainly crush the servers of any organisation that doesn’t have specialised DDoS defences. “If virtual currencies are to truly reach mainstream adoption, and be accepted as an alternative currency to the US dollar and other major currencies, then the ecosystem will need to find ways to dealing with DDoS attacks,” Hamman concludes.
For more information about Arbor in Africa, please contact Bryan Hamman at HYPERLINK "mailto:email@example.com" firstname.lastname@example.org. About Arbor Networksâ€¨Arbor Networks, the security division of NETSCOUT, helps secure the world’s largest enterprise and service provider networks from DDoS attacks and advanced threats.
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Marcian Concepts have been contracted by Selibe Phikwe Economic Unit (SPEDU) in a P230 million project to raise the town from its ghost status. The project is in the design and building phase of building an industrial hub for Phikwe; putting together an infrastructure in Bolelanoto and Senwelo industrial sites.
This project comes as a life-raft for Selibe Phikwe, a town which was turned into a ghost town when the area’s economic mainstay, BCL mine, closed four years ago. In that catastrophe, 5000 people lost their livelihoods as the town’s life sunk into a gloomy horizon. Businesses were closed and some migrated to better places as industrial places and malls became almost empty.
However, SPEDU has now started plans to breathe life into the town. Information reaching this publication is that Marcian Concepts is now on the ground at Bolelanoto and Senwelo and works have commenced. Marcian as a contractor already promises to hire Phikwe locals only, even subcontract only companies from the area as a way to empower the place’s economy.
The procurement method for the tender is Open Domestic bidding which means Joint Ventures with foreign companies is not allowed. According to Marcian Concepts General Manager, Andre Strydom, in an interview with this publication, the project will come with 150 to 200 jobs. The project is expected to take 15 months at a tune of P230 531 402. 76. Marcian will put together construction of roadworks, storm-water drains, water reticulation, street lighting and telecommunication infrastructure. This tender was flouted last year August, but was awarded in June this year. This project is seen as the beginning of Phikwe’s revival and investors will be targeted to the area after the town has worn the ghost city status for almost half a decade.
The International Monetary Fund (IMF) has slashed its outlook the world economy projecting a significantly deeper recession and slower recovery than it anticipated just two months ago.
On Wednesday when delivering its World Economic Outlook report titled “A long difficult Ascent” the Washington Based global lender said it now expects global gross domestic product to shrink 4.9% this year, more than the 3% predicted in April. For 2021, IMF experts have projected growth of 5.4%, down from 5.8%. “We are projecting a somewhat less severe though still deep recession in 2020, relative to our June forecast,” said Gita Gopinath Economic Counsellor and Director of Research.
The struggle of humanity is now how to dribble past the ‘Great Pandemic’ in order to salvage a lean economic score. Botswana is already working on dwindling fiscal accounts, budget deficit, threatened foreign reserves and the GDP data that is screaming recession.
Latest data by think tank and renowned rating agency, Moody’s Investor Service, is that Botswana’s fiscal status is on the red and it is mostly because of its mineral-dependency garment and tourism-related taxation. Botswana decided to close borders as one of the containment measures of Covid-19; trade and travellers have been locked out of the country. Moody’s also acknowledges that closing borders by countries like Botswana results in the collapse of tourism which will also indirectly weigh on revenue through lower import duties, VAT receipts and other taxes.
Latest economic data shows that Gross Domestic Product (GDP) for the second quarter of 2020 with a decrease of 27 percent. One of the factors that led to contraction of the local economy is the suspension of air travel occasioned by COVID-19 containment measures impacted on the number of tourists entering through the country’s borders and hence affecting the output of the hotels and restaurants industry. This will also be weighed down by, according to Moody’s, emerging markets which will see government losing average revenue worth 2.1 percentage points (pps) of GDP in 2020, exceeding the 1.0 pps loss in advanced economies (AEs).
“Fiscal revenue in emerging markets is particularly vulnerable to this current crisis because of concentrated revenue structures and less sophisticated tax administrations than those in AEs. Oil exporters will see the largest falls but revenue volatility is a common feature of their credit profiles historically,” says Moody’s. The domino effects of containment measures could be seen cracking all sectors of the local economy as taxes from outside were locked out by the closure of borders hence dwindling tax revenue.
Moody’s has placed Botswana among oil importers, small, tourism-reliant economies which will see the largest fall in revenue. Botswana is in the top 10 of that pecking order where Moody’s pointed out recently that other resource-rich countries like Botswana (A2 negative) will also face a large drop in fiscal revenue.
This situation of countries’ revenue on the red is going to stay stubborn for a long run. Moody’s predicts that the spending pressures faced by governments across the globe are unlikely to ease in the short term, particularly because this crisis has emphasized the social role governments perform in areas like healthcare and labour markets.
For countries like Botswana, these spending pressures are generally exacerbated by a range of other factors like a higher interest burden, infrastructure deficiencies, weaker broader public sector, higher subsidies, lower incomes and more precarious employment. As a result, most of the burden for any fiscal consolidation is likely to fall on the revenue side, says Moody’s.
Moody’s then moves to the revenue spin of taxation. The rating agency looked at the likelihood and probability of sovereigns to raise up revenue by increasing tax to offset what was lost in mineral revenue and tourism-related tax revenue. Moody’s said the capacity to raise tax revenue distinguishes governments from other debt issuers. “In theory, governments can change a given tax system as they wish, subject to the relevant legislative process and within the constraints of international law. In practice, however, there are material constraints,” says Moody’s.
‘‘The coronavirus crisis will lead to long-lasting revenue losses for emerging market sovereigns because their ability to implement and enforce effective revenue-raising measures in response will be an important credit driver over the next few years because of their sizeable spending pressures and the subdued recovery in the global economy we expect next year.’’
According to Moody’s, together with a rise in stimulus and healthcare spending related to the crisis, the think tank expects this drop in revenue will trigger a sizeable fiscal deterioration across emerging market sovereigns. Most countries, including Botswana, are under pressure of widening their tax bases, Moody’s says that this will be challenging. “Even if governments reversed or do not extend tax-easing measures implemented in 2020 to support the economy through the coronavirus shock, which would be politically challenging, this would only provide a modest boost to revenue, especially as these measures were relatively modest in most emerging markets,” says Moody’s.
Botswana has been seen internationally as a ‘tax ease’ country and its taxes are seen as lower when compared to its regional counterparts. This country’s name has also been mentioned in various international investigative journalism tax evasion reports. In recent years there was a division of opinions over whether this country can stretch its tax base. But like other sovereigns who have tried but struggled to increase or even maintain their tax intake before the crisis, Botswana will face additional challenges, according to Moody’s.
“Additional measures to reduce tax evasion and cutting tax expenditure should support the recovery in government revenue, albeit from low levels,” advised Moody’s. Botswana’s tax revenue to the percentage of the GDP was 27 percent in 2008, dropped to 23 percent in 2010 to 23 percent before rising to 27 percent again in 2012. In years 2013 and 2014 the percentage went to 25 percent before it took a slip to decline in respective years of 2015 up to now where it is at 19.8 percent.