A menacing new computer virus leaves victims with a choice between paying hackers a ransom and infecting two friends' computers.

The 'Popcorn Time' virus works by encrypting all the files on a hard drive, leaving the user unable to access them.

Victims are given access to the decryption key, but only after coughing up some Bitcoin crypto currency, or nominating two other people.

Victims are given access to the decryption key, but only after coughing up some Bitcoin crypto currency, or nominating two other people. A screen shot of the malware was posted by Malware Hunter Team on Twitter

WHAT IS RANSOMWARE? Ransomware is a kind of malware that steals users’ files and exacts a ransom from its victims. The software often poses as a reputable brand or service in order to get victims to download it. In this cases, The ransomware shares a name with programme that application downloads and streams films, with which it has no connection. Advertisement

It is currently unknown how many people have been affected.

The ransomware shares a name with a programme that downloads and streams films.

While the malicious software has no connection to the real Popcorn Time app, it tricks users into installing it, by posing as setup wizard for the genuine software.

'With Popcorn Time, not only can a victim pay a ransom to get their files back, but they can also try to infect two other people and have them pay the ransom in order to get a free key,' explained cyber crime expert Lawrence Abrams on Beeping Computer.

What's more, users have to key in the decryption code correctly, otherwise they risk losing their files.

'To make matters worse, there is unfinished code in the ransomware that may indicate that if a user enters the wrong decryption key 4 times, the ransomware will start deleting files,' said Mr Abrams.

Security researchers Malware Hunter Team first spotted the ransomware on 7 December.

The malware is not known to be limited any one region.

They posted several screen shots of the ransomware's demands for payment.

It appears that any cash raised it intended to be used for honourable causes, though the hackers are vague on the details.

The hackers claim that they will use the proceeds for 'food, medicine and shelter to those in need' though they provide no further details

'We are extremely sorry that we [sic] forcing you to pay, but that's the only way we can keep living,' the hackers said.

'The money you gave will be used for food, medicine and shelter to those in need.'

A recent report from security firm Kaspersky Labs stated that some 62 new types of ransomeware have made an appearance this year.

It also said that ransomeware attacks on individuals had doubled in frequency, between the beginning of the year and the third quarter.