Is Bitcoin Safe?
Stories of million dollar hacks, an unknown creator, and scam ICOs all may have you wondering, “Is Bitcoin safe as an investment for my money?”
Even with the negative stories that seem to flood the news at times, Bitcoin is actually more secure than most other financial systems. Taking the time to learn about how Bitcoin works and investing in a secure wallet is essential in keeping your Bitcoin safe.
Satoshi Nakamoto, the unknown developer of Bitcoin, built the network with certain measures to ensure its safety.
The entire code base that runs the Bitcoin network is available for anyone to view and audit. Countless developers have scrutinized the code for any loopholes and continue to check it for mistakes as it’s updated.
With the network open for review, it’s near impossible for Bitcoin to be an elaborate scam as some people claim.
Over ten thousand nodes (computers) keep track of the Bitcoin ledger and validate transactions on the network. This is drastically different than the storage of data on centralized servers used in traditional finance.
Because Bitcoin uses a decentralized system, there’s not one single point of failure that a hacker could exploit to compromise the network. They would have to find a way to control 51% of the network nodes for this to even be possible.
Looking at the recent Equifax hack, it’s clear why storing private information on a centralized server is a huge risk.
All transactions that you make using Bitcoin are public and irreversible. There’s mathematically no way to fake transactions or make errors in recording account balances.
A transparent ledger of transactions also decreases the risk of fraud and money laundering.
You don’t need to attach any personal or confidential information when making a Bitcoin transaction or using a Bitcoin wallet.
Because your personal information isn’t attached to your wallet or transactions, you’re at less risk of identity theft. Even if someone gets hold of your wallet’s private key, they’ll only have access to your funds, not your personal information.
The biggest threat to your Bitcoin investment is not with the network itself, but with the volatility of the price. As more people begin to use Bitcoin and other blockchain technologies, though, the price should stabilize.
With proper education and correct storage practices to keep your Bitcoin safe, your funds are as secure as when using other financial channels (if not more secure).
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ABOUT THE AUTHOR
ABOUT THE AUTHOR
Based in Austin, TX, Steven is the Executive Editor at CoinCentral. He’s interviewed industry heavyweights such as Wanchain President Dustin Byington, TechCrunch Editor-in-Chief Josh Constine, IOST CEO Jimmy Zhong, Celsius Network CEO Alex Mashinsky, and ICON co-founder Min Kim among others. Outside of his role at CoinCentral, Steven is a co-founder and CEO of Coin Clear, a mobile app that automates cryptocurrency investments. You can follow him on Twitter @TheRealBucci to read his “clever insights on the crypto industry.” His words, not ours.