3. August 2021

Here’s how the Corona crisis is affecting Bitcoin

The news right now is all about nothing but the Corona virus. We’re joining that today – but exclusively highlighting how the Corona virus is affecting Bitcoin and co: ransomware taking advantage of the attention, darknet markets receiving more orders but also seeing supply shortages, Corona tokens on the Ethereum blockchain, virtual conferences and developers falling ill – there’s a lot to report.

Corona is as much a social media phenomenon as it is a medical one. I’m not aware that there has ever been an event that dominates all social media circles to such an extent. Everyone wants to know what’s new all the time, and follows with a morbid fascination as the new case numbers pile up exponentially and society goes into disease control mode. I suspect this is where the cultural memory that carries half a millennium of plague quarantine makes itself felt.

Most of the impact that the corona virus has had on Bitcoin and other cryptocurrencies, therefore, owes less to the virus directly than to the high profile it is receiving and the measures governments are taking to counter its further spread. It is already known that prices are suffering extremely from the Corona virus; by now, even the rain bottom chart of the blockchain center has been broken, which means that Bitcoin, at least in this chart, is in a worse position than ever before.

But that’s not the point here. Let’s look more into the details: What are the implications of the Corona crisis for crypto? And how are cryptocurrencies and their ecosystems responding to Corona?

For criminals, the attention explosion is a welcome gift

Security firm DomainTools has noticed an extremely sharp increase in Internet sites that have the words “Coronavirus” and “COVID-19” in their names. Many of them are fraudulent. According to Check Point, there are more than 4,000 new domains around Corona, of which 3 percent are fraudulent and 5 percent are suspicious. This makes Corona sites 50 percent more dangerous than normal sites, and even more dangerous than the usual seasonal sites like around Valentine’s Day. There are also tons of websites with fake coupons, make sure to use trusted sites like Cryptocoupons.org.

One example is a page that asks its users to download an Android app that shows a live map of Corona infections. However, this app contains a ransomware that encrypts the data on the smartphone, pictures, documents, even contacts, and then asks users to pay $100 in Bitcoin within 48 hours to unlock the smartphone. Russian darknet forums also seem to be already selling “CovidLock” kits that connect such card apps with malware.

Besides that, there are also many sites that track the spread of the Corona virus but inject malicious code into the browser to grab passwords, cookies, usernames and other stored info in the browser. For crypto users, this could be particularly dangerous if they have, for example, stored access data to exchanges in the browser.

The UK’s FCA, an independent financial regulator, has already issued a warning. “Beware of scams around the coronavirus (Covid-19). Scams come in many forms, as insurance, pension transfers or high return investments, including an investment in cryptocurrencies.”

Darknet market trade picks up – but drug production suffers from slumping imports from China

The bitcoin.com site reports on how the Corona virus is affecting darknet markets, where banned products are usually paid for with bitcoin and other cryptocurrencies. In doing so, Bitcoin.com draws from discussions on a darknet forum.

In that forum, one trader speculates that purchases will increase significantly because of the Corona crisis, as “people want to stay quarantined at home.” If overall online commerce increases as people want to shop less in supermarkets, this is likely true for drug trafficking as well – while the requirement to stay home could lead to an increase in drug use for many. Accordingly, on the Reddit forum r/darknet, one dealer also reports that demand for the sedative drug Xanax has increased significantly, perhaps because people are panicking about Corona and looking for pharmaceutical sources of sedation.

Darknet & btcHowever, this also means that the postal service is no longer able to keep up with deliveries. Some retailers are already reporting delays in deliveries. Supply chains also seem to be affected. Some dealers complain that major labs for crystal meth are closed because supplies of raw materials from China have collapsed. Prices for the drug have already increased fivefold in Mexico, they say.

In some cases, dealers are already trying to take advantage of the spreading panic. For example, someone at one market is selling THC capsules with the advertisement that they protect against the Corona virus and strengthen the immune system. Other merchants are selling respirators and disinfectants on the darknet. And while Amazon has taken some of the goods that are currently in short supply due to hoarders and hoarders off the marketplace to prevent extortionate prices, the decentralized shopping portal OpenBazaar, where you pay exclusively with cryptocurrencies, advertises that there are no bans on goods there.

The collapse of the bitcoin price in recent weeks has also hit many merchants hard; often the coins they receive for an order remain in escrow with the marketplace, which only releases them when the goods reach the customer or the customer fails to appeal after a certain amount of time has passed. Thus, they had no opportunity to sell Bitcoins at the value of the time of purchase, but in some cases at a loss of 30 to 40 percent or even higher.

Coronacoin: an Ethereum token for Corona.

Any kind of attention is good because there is profit in it. In addition to ransomware authors, blockchain token designers are also taking advantage of this. For example, a group of anonymous Ethereum developers has released an ERC-20-based Corona token (NCOV). The project’s internet site is currently offline.

The amount of tokens is regulated by a macabre mechanism. In the beginning, as many tokens were issued as there are inhabitants on Earth. Every 48 hours the amount decreases, namely one token is destroyed for every (real) Corona infected person. If experts’ predictions work out that in the long run 60-70 percent of the population will have to be infected at least once for the human herd to develop immunity, the Corona token might not be such a bad investment – provided the developers stay true to their own promises, for which there can be no guarantee, of course.

At the same time, the developers plan to release a game as a smart contract around the tokens. The game is to be a mixture of the board game Risk and the computer game Plague Inc. The goal is to wipe out the human race with a virus. In the process, players will probably be able to design viruses that will go onto the blockchain as a non-fungible token, just like the CryptoKitties.co, while the Corona coins will act as a kind of betting token in the game. Since the developers have taken advice from virologists, the game is supposed to be reasonably realistic and also educational. To win, you have to become an expert on viruses yourself, so to speak, and know by what parameters (mortality, spread) and under what circumstances (temperature, material adhesion) a virus will claim the most human victims.

While this Corona token still seems somehow innovative and also playfully wants to do education, there are other tokens that just seem to be copycats. For example, there is now also the Coronavirus Token (CNV) and the Coin CORONA (CORONA). While CORONA is supposed to be distributed via “infected addresses” to create awareness, there is hardly any info about CNV.

The Ethereum conference Ethereal will not take place live in early May as originally planned. The actual event in New York has been postponed until fall, while the first virtual Ethereal conference will take place in early May. Bitcoin events such as the Socrates seminar are also already taking place in virtual space. Virtual doesn’t just mean that attendees see the speakers on their screens, but that the conference takes place in a real virtual world – including a lecture hall, claps and likes, a lobby and an after-pool party.