What is ransomware?

Ransomware is a type of malicious software that cybercriminals use to encrypt a victim's data. Once the files are encrypted, the victim is presented with a ransom note demanding payment in exchange for a key to unlock their data. This method is designed to coerce individuals or organizations into paying for the restoration of their files, often under a time constraint to intensify the urgency. The objective of ransomware is not only to disrupt normal operations but also to financially gain from the victims by taking away access to their critical data until the ransom is paid.

The other options do not accurately define ransomware. For instance, software that improves system performance refers to optimization tools, while a tool for data recovery typically helps retrieve lost data without malicious intent. Furthermore, anti-virus software is designed to protect against viruses and malware, including ransomware, rather than being a ransomware itself. Therefore, the defining characteristic of ransomware is its role in encrypting data and demanding payment, making the selection of that specific answer correct.