Bitcoin has been steadily growing in popularity and has garnered a number of headlines in the past few months. Amongst those headlines were a series of large Bitcoin “heists”, some being worth millions. What are Bitcoin and cryptocurrencies?
Most Internet users are familiar with some form of digital currency: some games feature digital premium currencies. Bitcoin and cryptocurrencies take this to a whole new level.
“They are a form of digital currency that has no physical presence as such, unlike a bank note or coin it’s all completely online,” explains Mark James, ESET security specialist.
“Cryptography is used to control the growth and also secure its transactions; the currency is decentralized meaning it is not controlled by a single network or controlled by a single bank.”
Bitcoin can be acquired via digital transactions for good or services; some currency converters do exist. The main way to acquire Bitcoin, at least when it was first created, is by Bitcoin mining.
“All transfers are done electronically and the user holding the currency can be almost anonymous” because of this Bitcoin are often used in Dark Web illegal marketplaces, like Evolution, and Ransomware.
How secure are Bitcoin?
An extremely committed or clever cybercriminal can potentially get their hands on any piece of digital content; does the same go for Bitcoin?
Bitcoin users are encouraged to work together to improve the security and stability of Bitcoin as a currency. In that case how are large scale heists like Bitstamp and Mt. Gox possible?
“It all depends on how secure you are; most thefts of bitcoins are a direct result of inadequate or badly managed wallet security.
“The other problem with bitcoin transactions are that they cannot be reversed, the only way to get the bitcoins back are if the receiver sends them back to you.”
Viability and Uptake
A few high profile businesses and organisations have begun accepting Bitcoin as a payment method, including Amazon, Apple App Store, eBay and Expedia.
Mark James believes that they will remain a niche currency for the time being.
“They will never replace the good old pound or dollar: they are, and will always be, an alternate currency for the few that want to use them.
“I don’t think there will be a large adoption: the instant transactions and no transaction fees are a lure for some but business will still want the safety of the currency system in place.
“Not everyone does or will want to use bitcoins, so the traditional methods will stay in place for the everyday currency transactions with cryptocurrency being an alternative if some want to use it.”
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Do you, or would you, use Bitcoin or another cryptocurrency?