If I had a botnet in 2010 #bitcoin

Just brainstorming here, but lets say you had a botnet in 2010. You could do all kinds of stuff with it, and you did. But eventually you got tired of performing the Nth DDoS or sending the gazillionth SPAM email. You also got more and more competition, so prices for your services were dropping. Something had to change.

Lets say you read about this new thing called bitcoin. And because you had so many nodes in your botnet doing nothing you decided to start a little experiment and have the nodes mine bitcoins. In that time mining with CPU was still lucrative so you mined a lot during 2010 and 2011. Perhaps you had a few GPU boxes in your botnet also, so you let it run for a while until the end of 2012. CPU and even GPU mining wasn’t an option anymore by then due to the complexity. The next step was ASIC or FPGA but these were not easy to include in your botnet, so this adventure was over. Let’s say you ended up with 50 thousand bitcoins.

Having 50K bitcoins means nothing if you cant cash. Because of the setup of bitcoin it actually is really simple to convert a bitcoin into EUR: just sell it on a one of the trading websites. No police or tax involved, even no laundry of money needed! So you decided its time to start selling and making some profit. But, there are actually two problems that you wanted to get rid of:

  1. The price of one bitcoin by the end of 2012 was merely EUR20 or so, perhaps a tad more. Not real shocking money in the business you are in.
  2. Dumping 50 thousand bitcoins on a premature market where not much trading is happening is not good. Simple demand vs. supply rules dictated that you will flood the market and probably will end up with bitcoins not worth more that just a few euros or even less. You could also try to sell over a much longer period of time. But that still would not get you high profits and will only cost you a lot of time.

Both problems result in low profit. And that is not what you want. So, before selling your bitcoins you need the value of bitcoin to go up. Even if you flood the market, having a high value before flooding means you will end up with more profit. So you started thinking about the options. You thought that getting bitcoin to go up requires two things:

  1. Create more hype. If people don’t know about bitcoin than they will not buy some. So you need to have the main stream media to talk about bitcoins. Main stream media means main stream people. Main stream people is a lot of people.
  2. Have people believe it is worth more than it is right now. So create artificial demand.

The two items above are interlinked. Once more people know, more might want to buy and the price will go up. So all you need to do is give it the first push.

So you perform a DDoS on trading websites and send some SPAM about bitcoins. You also start buying bitcoins for EUR50 while the current bid price is EUR20. You do this for some time and you see the price going up. You buy some more for EUR80 when the current bid price is on EUR50. Lets say you invested a total of EUR100K in buying bitcoins for above market prices.

Slowly but steady the price is rising. And then, all of a sudden the buzz is on. The big media start writing about bitcoins! People get interested and more demand is there. At the same time you get some (unintended) help from the Cyprus crisis. Now the buzz is really on! Bitcoins are in real demand. The big trading websites simply cant handle the demand. Even more news articles about bitcoin being in such demand that the trading websites cant handle the traffic. Great, you don’t even have to DDoS yourself, all the users are already doing that.

You point, laugh, and got a beer while you saw your 50K bitcoins sky rocket in value. You watched it for a few days and then you decided to cash. Just before 1 bitcoin hit EUR200 you decided to start selling all. First for market price EUR200, then below market price for EUR150 and within a few hours you sold all before market price was EUR100.

Yes, the market went down quickly, but you managed to sell all. Lets see what you cashed:

  • 50 thousands bitcoins for between 200 and 100 euro. So lets say 50,000 * 150 = EUR7,500,000
  • Your investment to get the price up was EUR100,00.
  • Profit is EUR7,4 million euro.

OK, there is also the investment of having your botnet mine and not send SPAM, performing DDoS or lend it out for cyber crime attacks. But I doubt that goes into the millions.

Now, if you didn’t do the EUR100K investment you might had cashed 50,000 * 20 euro = EUR1,000,000. So a EUR100,000 investment was for sure a good thing.

Hat tip to you if you had a botnet in 2010 and performed the above steps. The botnet part is criminal, but you are a smart criminal.


2 Responses to “If I had a botnet in 2010 #bitcoin”

  1. Yߋur way of explaining everything in this post is actually fastidious, every оne bе
    able to easily understand іt, Thanks a

  2. I don’t even know how I ended up here, but I thought this post
    was great. I don’t know who you are but certainly you are going to a famous blogger if
    you are not already ;) Cheers!

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