The Shift from Local Currency to Cryptocurrency, is it Secure?

Back in the days, the money was only kept in bank accounts. There are various types of accounts such as, currents accounts and a variety of saving accounts. All transactions were done through the bank and its knowledge. There is also a middle man involved in local currency banking. However, the trend to store and exchange money via Bitcoin a fairly popular currency now is increasing. As Peter Diamandis says, “At its core, bitcoin is a smart currency, designed by very forward-thinking engineers. It eliminates the need for banks, gets rid of credit card fees, currency exchange fees, money transfer fees, and reduces the need for lawyers in transitions… all good things”

Bitcoin is an online currency, all the dealings are done online through black chain. There is no middle man involved in the dealing and it is considered to be safe. The Bitcoin developer Satoshi Nakamoto says that the bitcoin users also known as, Bitcoin miners can trust this currency. With local currency, one needs to rely on the government and its value may change over time. In bitcoin, the block-chain is not owned by anyone person, rather the blocks are added by bitcoin miners which requires great computing skills and power. Often groups of people work together in order to solve problems and create a block and then they earn profits for their hard work. The strong point here is that no one can break these blocks once they are made.

“Bitcoin seems to be a very promising idea. I like the idea of basing security on the assumption that the CPU power of honest participants outweighs that of the attacker. It is a very modern notion that exploits the power of the long tail.” – Hal Finney

The payments in Bitcoin are made through pseudonymity, a process that uses the address. This bitcoin address is a number and a user can create as many as he want. Since the payments are made through these bitcoin addresses, it is not possible to identity the owner of that address. Moreover, the payments are also authorized by public key cryptography.

“Bitcoin enables certain uses that are very unique. I think it offers possibilities that no other currency allows. For example the ability to spend a coin that only occurs when two separate parties agree to spend the coin; with a third party that couldn’t run away with the coin itself.” – Pieter Wuille

These were some amazing plus points of the cryptocurrency Bitcoin. But is it free from cyber-attacks? Does it not have any potential cyber security threats? In case the bitcoin key is leaked or seen by anyone else, the person can make transactions and there is no way this can be stopped, huge sums of money can be lost in this way. Another issue with the key is that the bitcoin address owner might lose the key, in this case all the money will be gone.

In some instances, it is possible to track the shipments of the bitcoin user and track their bitcoin address. Once the owner of the address is identified other transactions can also be looked upon.

There are various incidences where cryptocurrency, particularly bitcoin, has faced threat from the hackers. It is reported that the police had arrested many people involved in global bitcoin laundering.

Department of Homeland Security carried out a study and they found out that, approximately 33 percent of bitcoin trading platforms have been hacked. This proves that after all, bitcoin isn’t as safe as the developers claim it to be.

The bitcoins has also served in ransomware. In previous years, 3 Greek backs were threatened to pay thousands of euros in the bitcoin currency or they may face the consequences. The ransomware is increasing by the help of bitcoin because the criminals are sitting behind the screen and they can mask their identities behind the bitcoin. Later they convert the bitcoin currency to their local currency. No one ever identifies them.

Neither the local currency nor the bitcoin currency is entirely safe. When dealing with bitcoins it ultimately depends upon the expertise of bitcoin miner. One must learn to deal with bitcoins before stepping into this world of currency.

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