Is Bitcoin Secure Enough?

Bitcoin is a volatile currency, and for some time, it has been a hot topic of discussion in the financial community. As this bold cryptocurrency moves into the mainstream, the most common question arises in enthusiasts’ minds — is Bitcoin secure enough?

If you are already here, this question has also hit your mind once! This comparative research blog will help you tackle your confusing thoughts. Focusing on Bitcoin’s features, let’s get started and dive into the reality of the Bitcoin world.

• Uses secure cryptography

Bitcoin is an online currency backed by a special blockchain system. Unlike other financial solutions, blockchain relies on a secure core concept called cryptography. This ecosystem uses multiple volunteers to sign the hashes. These hashes validate the transactions over the Bitcoin network with the help of cryptography. With this system, the transferred funds become irreversible, and the security of Bitcoin data becomes strong.

So, what is cryptography? It is a process of hiding or coding information so that only the person intended to read the message can access it. Similarly, only the person/ or organization that intends to receive the phrase Bitcoin can access it, and no other party has the right to get it.

• Is available publicly

Being available publicly may sound out of the ordinary, but it maintains transparency in all the transactions. The people involved in it remain anonymous, but the Bitcoin ledger transparency is the tool that makes it difficult for the attackers to scam the system. With the public availability of data, there is nothing for malicious actors to hack and see.

Compared to traditional companies’ standard data breaches, Bitcoin is a lot safer as no personal information is involved, such as passwords, credit card numbers, or physical addresses.

• Decentralized in nature

The ledger of Bitcoin has more than ten thousand nodes globally to track all transactions over the system. But it is a wonder why so many nodes are required. The answer is simple: this large number of nodes makes it clear that others can pick up the left if anything happens to any server or node.

This also implies that there is no point in hacking into one server. Nothing can be stolen that the other nodes can not secure or prevent until and unless you have control over 51% of nodes; this is not impossible, but extremely unlikely.

• No permission required

For a currency like Bitcoin, being public or decentralized makes a little sense if it is to be allowed by some authorities. There are no regulatory bodies, and Bitcoins are open to everyone. The lack of permission keeps Bitcoin open and fair for everyone who wants to access it.

Without any authority, Bitcoin uses a protected 256-bit SHA hash function to encrypt the data as a digital signature algorithm, which is only accessible to those holding similar digital fingerprints.

• Is not anonymous

Bitcoin only disguises your personal information but does not hide the address of your crypto wallet. This shows that you are not entirely ‘anonymous’ but actually ‘pseudonymous’, and with clues, somebody can also track down your personal information. Governments can command the data, and cyber hackers can use all kinds of illegal ways to obtain the info. With the help of backtracking on the ledger, the transactions can be traced back to your wallet.

• Volatility

Despite secured cryptography, there are arguments that Bitcoin is safe due to its volatility. Without any regulatory body and a global 24/7 market, a Bitcoin that is worth $60,000 in a day can be seen at $30,000 just after a few days. Some stability came for a period of time but did not last.

• Passwords can be lost

Bitcoins are stored in hot or cold crypto wallets. You will be in trouble if you forget your wallet or Bitcoin password. There is no central authority that can be contacted to recover your account. Many users have lost millions of dollars after failing to remember their Bitcoin wallet’s password.

Even a famous crypto exchange was unable to repay $190 million to its users after its founder died without disclosing the only password.

• Can be stolen

Just because Bitcoin is secured on the blockchain system level does not mean hackers can’t also use other methods. Some of the potential risks to Bitcoin are:

• Phishing attacks: This is a classic technique for tricking you. The attackers obtain all your personal information through spoofed emails or messages that request access to private data.
• Fake websites: Some sneaky counterfeit websites trick users into handing over their personal information to hackers who can access their private keys.
• Malware: Multiple malware stains revolve around Bitcoin and Bitcoin wallet. Such malicious code can access your crypto wallet. Apart from this, crypto mining malware forces your computing system to mine Bitcoin for a hacker.
• Man-in-the-middle attacks: It is most unlikely, but a hacker could launch man-in-the-middle attacks on the node or on the wallet.