The correct name for ransomware is Cryptovirology or put simply, a virus that encrypts data and thus making it useless to the owner. This would be deemed as digital vandalism but for the fact that the criminal (and they are criminals not hackers) offers a solution to decrypt the data on payment of a ransom, bribe or tithe, call it what you like but it boils down to criminal extortion.
The criminals know that no sane individual would ever give them their credit card details to pay this ransom, so the currency of choice, Â currently are Bitcoins. One Bitcoin today (July 2015) is worth a little over Â£500, although as explained in this very good article click here, it has even been known for the criminals to accept Amazon gift credits as payment .
Once the ransom has been paid, the victim will be given the decryption key to retrieve their data.
So there we have it, the data is encrypted and rendered useless, the victim has a choice pay the ransom, thus proving that they are a soft touch and so leaving themselves open for another attack, donâ€™t pay the ransom, run a virus cleaner to remove the virus and then restore a previous backup of the data losing only the work done between the time of the last Â backup and the time of the attack, or use the DIY method if you have the wherewithal, or get a professional in to unravel the mess.
Far easier to protect and avoid getting infected in the first instance.