It's not just Microsoft. What most bug bounties pay isn't even close to the amount you can get from selling it on the black market (assuming you have the right connections). It's why selling exploits to nation states and vendors who work with them is so lucrative.

I do agree that bug bounties are too small, but isn't selling bugs on the black market illegal?

I would much rather get $40 dollars for a bug and some public acknowledgement (which I could use to get a better paying job) than to sell it for criminal use.

Assuming you live in a place where you can get a high paying job and/or leave the country to get one.

Taking a US centric view on this is a great way to ensure nation states have compromised your security.

So if you take a non-US centric view and assume there's no legal repercussions and the person finding the bug has no moral compass, what exactly would prevent them from sharing the bug with a nation state and you at the same time? Sure they may get slightly less from the nation state because the bug would have a shorter shelf life, but it would still make it into the wild long before every system could be patched.

Paying more money isn't going to make someone do the right thing.

The legal/ethical question is important, but I was just stressing OP's point about the disparity between bug bounties and what the actual exploits are worth. IANAL, but for the specific cases I mentioned (nation states and vendors who work with them), I think the legal aspect would be very different from selling it to regular black market cybercriminals (I used the generic "black market" in the first part of the original comment but I was mostly talking about those two cases).

How about selling legally to a state actor for 100k ?

Bug bounties need to be higher, because the black market is not the only alternative.

> but isn't selling bugs on the black market illegal?

Noob question: is there any specific law that punishes describing how to get into a software/electronic system but not actually doing it? Something that is just not purely US-centric.

Here is UK specific answer, and as they point out, if you sell to some one knowing they are going to commit a crime with it, you can be considered an accomplice in many jurisdictions.

https://law.stackexchange.com/questions/11552/is-it-illegal-...

Sounds like a market opportunity for middlemen in other jurisdictions.

Or, sell it on the black market, and use that connection to get a better job on the black market. Reputation is just as important for criminals, and crime pays better (until you get caught).

Bitcoin solves this!

It's probably illegal in many jurisdictions, no? Not to mention unethical. You are not just harming Microsoft here in this instance, but potentially millions of people.

If we’re looking at ethics, what’s the morality of Microsoft not paying market rate for exploits.

Bug bounties probably act as a price discovery mechanism on the part of bug finders. They should also have a negative price premium bye to decreased risk.

How does the black market price compare to the 'nation state' price?

x = y. Where do you think nation states purchase their tools?

Make bug bounties pay $250k and people will have their friend inside add some bugs for the outsider to find, and share the payday.

Pay-per-bug-found incentivises plenty of counterproductive things as well, especially if we're talking about people who happily sell to anyone on the black market.

You can do that today with blackmarket exploits, so why do you think actual bug bounties will cause this problem?

Because then you'll be able to do it without needing any black market connections or transactions, which will make it easier, more of it happens above board, there's less to trace or indicate any problem so it's less discoverable, the payment is from a trusted source.

Why would making it easier make it happen less often?