Like any other type of currency, Bitcoin users need to understand some of their specific problems in order to make their funds as safe as possible; this includes changes in the price of Bitcoin, the storage of cryptocurrency, the use of third-party trading platforms for transactions, and the threat of hacking technology.
Bitcoin storage exist
several specific steps to ensure that Bitcoin is in the best security state:
The first rule is to properly keep your “private key” secret – the password used to access and use Bitcoin. If the private key is secure and no one can obtain it, your Bitcoin is secure. But remember that if you lose your private key, you will not be able to use the funds alone, unless you unlock the password with dozens of characters.
Transaction and expenses
When trading and spending Bitcoin, it is very important to choose a trustworthy and trustworthy institution. When using a traditional bank card, you accidentally become a victim of fraud. Existing laws and regulations can help you make up for any losses. However, for Bitcoin, that protection has not yet arrived. Also remember that Bitcoin payments are undeniable – once the payment is confirmed, the money goes out. If you make a mistake, like paying $ 22.2 instead of $ 222.22 or sending bitcoin to the wrong address, you can only count on the recipient’s willingness to get your money back.
You may have heard that many Bitcoin users love their anonymity. Yes, it is partially correct. Everyone can view the contents of the wallet and track all transactions, but they do not know who owns the wallet. Bitcoin wallets and transactions are not associated with personal data or identity. But there are other ways to find out the holder. For example, you may be asked to reveal your identity when using cryptocurrency trading services. If you need more privacy, in addition to the onion TOR browser and other technical solutions, there are other cryptocurrencies that provide more privacy, such as Dash, Monero and Zcash.
Other Bitcoin risks are difficult to control, but it is still important to understand these risks and keep an eye on the news, because the technology itself is still in an experimental stage and in continuous development.
One of the hypothetical risks is a hacker attack on the Bitcoin network. In theory, if a group of Bitcoin miners controls more than 50% of all the computing power needed to operate the Bitcoin blockchain, this is possible. Although the likelihood of a successful attack is less, hacker attacks can also be found when the share of computing power is small.
In 2014, there was a case in which the mining pool Ghash.io obtained almost 51% of the entire Bitcoin network, but afterwards some members of the mining pool voluntarily left to reduce their shares. Bitcoin experts believe that the possibility of a “51% attack” is very small, because the cost behind it can far outweigh the benefits, but it hurts the attacker. This attack cannot be used to steal older bitcoins or alter transactions. Only recently viewed transactions and work logs will be affected. Any attack will only occur for a short period of time, and the Bitcoin community will repair it quickly. The biggest loss is the coin’s image.
When it comes to cryptocurrency exchanges, hacking will bring an even bigger crisis; judging by the historical records of the past, as these cryptocurrency exchanges are not regulated by regulations, they were hacked to steal a large amount of money.
When quantum computers appeared, it was inevitable that the Bitcoin network would be threatened by hackers, as it would be much more powerful than today’s computers. However, quantum computers are expected to take several years to build, and methods to resist these attacks are already being developed on the market.
Reason # 1: Bitcoin is encrypted and secure
And not just encrypted in a normal, routine way. Bitcoin is encrypted and secured by a special system called blockchain. Blockchain uses many volunteers to work together and encrypt transactions that take place in the Bitcoin system. And in doing so, they ensure that all personal information is hidden from potential spies and that even if cybercriminals manage to enter the system, there is nothing of value to steal.
Reason # 2: Bitcoin is public
“Wait a minute, it doesn’t feel safe anymore”, you may be thinking, but “public” means that all transactions are transparent and available to the public, even if the people involved are anonymous. This means that no one can cheat, lie or defraud the system in any other way. They are also irreversible, so when you buy your Bitcoins or sell them, no one can ask for your money back. With Bitcoin, this is like having thousands of people looking at your wallet to make sure no one tries to steal anything.
Reason # 3: Bitcoin is decentralized
Bitcoin has servers around the world and more than 10,000 nodes that track all transactions that take place on the system. This is important, because it means that if something happens to one of the servers or us, the others can make up for it. It also means that trying to hack one of the servers is useless: there is nothing you can steal that the other nodes and servers cannot prevent, unless you control 51% of the nodes. A situation that is not impossible, but very unlikely.
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