Cyberattacks emphasize vulnerabilities of bitcoin
Cyberattacks emphasize vulnerabilities of bitcoin
22 MAY 2017 7:17 AM

The recent spate of global cyberattacks and ransom demands will further isolate the use of crypto-currencies at hotels.

Brand development personnel and lawyers made up the lion’s share of the attendees at last week’s one-day Hotel Operating Agreements conference in London, during which much of the talk was about the relationship between brands and owners.

But there also was a renewed cry to ramp up protection against cyber criminals in light of the WannaCry ransomware cyberattack that hit computers around the world in mid-May.

Those affected were sent a ransom demand, to be paid in bitcoin before they could recover access to their locked files.

Naturally, such attacks concern lawful people and business, so much so that lawmakers in Florida are pushing to have criminals who trade in bitcoins charged with money laundering, and thus subject to increased penalties.

Cynics perhaps might suggest that this will please traditional money institutions, which see bitcoins as competition to their business models.

Back at the HOA conference, the talk was more along the lines of what can hotels do to protect themselves from any such attack. As we know, several hotel chains have come through periods of such pain and embarrassment. InterContinental Hotels Group was the last hotel company to announce publicly that its payment card system might have been compromised.

That was in April.

Graham Dodd, senior director of development, United Kingdom and Ireland, at Hilton, said training and vigilance are the best protections for hotel firms.

“The most innocuous email can lead to danger. Minimize the risks, but no one is immune,” he said.

John MacKenzie, a partner at legal firm Shepherd & Wedderburn, agreed that “anyone who holds data and cash will be subject to these kind of attacks.”

Training is needed to safeguard against even the most routine errors, such as “leaving USB sticks lying around,” Dodd said. “Some of this is really basic stuff.”

The bottom line is that safeguards will come when hard cash is spent on back-of-house and card-payment systems.

I wrote three years ago of bitcoin use in hotels. Back then, I found several hoteliers interested in adopting systems where they could be paid in bitcoins, but at the time not one of them had taken final payment in them.

I should add none of the above is the fault of bitcoin either. Why not have globally recognized crypto-currencies?

My colleague Sean McCracken wrote that three years later, there still has not been a significant uptick in Bitcoin usage by hotels.

All money sits on the bedrock of confidence. If we all lost our confidence in the spending and exchange power of U.S. dollars, U.K. pounds and Croatian kuna, to give three examples, those currencies would disappear tomorrow.

With these added cyberattacks, though, I still do not see a future for bitcoin in the hotel industry.

The thinking might well be, even if bitcoin is essentially no different than cash or credit cards, why take the risk?

Email Terence Baker or find him on Twitter.

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