The type of malware that encrypts files and demands payment for their release is called ransomware. Ransomware typically infiltrates systems via phishing emails, malicious downloads, or security vulnerabilities. Once executed, it encrypts the victim's files and displays a ransom note, instructing them to pay a specific amount to regain access to their data. Ransomware attacks can severely disrupt personal and corporate operations, leading to financial losses. Prevention measures include maintaining regular backups, using updated antivirus software, and educating users about safe online practices.