Ransomware is pretty much when they take data from you, and force you to pay a certain amount of money to "get it back".
If you are talking about the recent WannaCry ransomware outbreak, it was caused by a leak of an exploit which allowed it to spread. It was patched however for Windows 7,8.1,10 around March, but since a lot of people don't enjoy windows updates, it was able to spread to tens of thousands.
Ransomware has been around for a fair bit, and is a pretty dangerous threat overall.
The way it works is that it encrypts files on your computer, and only they have the key to decrypt them, and the demand is usually something like Money in exchange for decrypting your files. Which isn't even guaranteed even if you give into the demands. ->
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If you are talking about the recent WannaCry ransomware outbreak, it was caused by a leak of an exploit which allowed it to spread. It was patched however for Windows 7,8.1,10 around March, but since a lot of people don't enjoy windows updates, it was able to spread to tens of thousands.