8 Security Facts About Bitcoin All Investors Should Know

Bitcoin

One of the latest high-tech trends that involve the financial environment is the advent and massive diffusion of Bitcoin, followed by other digital currencies like Libra, which is only the latest one.

Many people already start accepting Bitcoin as a payment method, this happens on e-commerce platforms. But like any other cryptocurrencies, Bitcoin has experienced a drastic drop in prices during the few past months. Price volatility is actually a crucial aspect when it comes to Bitcoin or any other digital currencies.

Ever Heard Of Security Problems With Digital Currencies?

But there are also more aspects that investors or retailers who want to use digital currencies should know and that's virtual money faces serious security problems. You can go deep into this topic by getting financial tips and reading cryptocurrencies news at kasotukanavi. And if you can't read Japanese, just use Google Translate to get it in your preferred language – this site is really worth it.

So, before you start claiming that Bitcoin is a great alternative to actual money, be aware of its security risks, including the safety of digital wallets, for example. We've prepared the following list of the most important security concerns and facts about Bitcoin that you wish you knew before (if you are already using Bitcoin for investments or commercial purposes).

Digital wallets
Bitcoin wallets are vulnerable more than you may think and that's a pity that only a few people are aware of this security fact. In fact, such wallets can be attacked by any hacker online who can steal all the money in a second through weak spots in hardware wallets. Despite the encryption technology, there's a loophole that leaves Bitcoin wallets potentially subject to malware and hackers.
Cyber-attacks
Also, Bitcoin exchanges can be attacked online. Blockchain technology still remains pretty safe and it works well, but the exchanges seem to be much weaker if you consider this fact happened in 2014 when hackers could steal something like 850,000 digital coins, which corresponds to $7.2 billion.
Bitcoin mining
Mining is a potentially big problem when it comes to Bitcoin. Recently, China emerged as the major country for Bitcoin mining, which means that China commands big mining ratios. Also, there's the danger that large miners may hide the block they mine from honest miners instead of making the block visible on the network. This means that a few selfish miners may easily get ahead of honest miners, thus doing they do nothing but a world-scale conspiracy that causes harm to honest mining.
Double-spending
There's a transaction risk when it comes to Bitcoin and that's double-spending. It consists of Bitcoin users who take benefits from using the same coin twice in the same transaction, one to a real recipient and the other one to an account that they control. For example, John sends a Bitcoin payment to Anne for an item he purchased from her, but John also sends the same amount of coins to an address that he controls using the same Bitcoin. So, while Anne is waiting for the money at her address, John credited it to his account and Anne won't see a coin of that transaction.
Regulation
Let's continue the example we started in the previous point. Anne realizes that she got scammed, at some point. What can she do now? Practically and sadly… nothing, because Bitcoin is not regulated, so there's no recourse for anyone.
Not fully secure
Both the mining process of Bitcoin and any transactions involving this cryptocurrency aren't fully secure because online Bitcoin wallets may be sensitive to the fraudulent action of malware. Online wallets are more vulnerable than applications downloaded for wallets.