One of the main issues holding back the popularity of Bitcoin right now is security. Bitcoin security is a tricky subject, and it’s not something that can be described in a three to five minute news segment on CNBC or Bloomberg. While there have been plenty of stories of bitcoins being stolen by bad actors over the past few years, it’s important to realize that there is a difference between Bitcoin and bitcoins. Bitcoin, with a capital “B”, is the name of the protocol and payment system, while bitcoins are the currency used on that network. By differentiating between the two, it becomes easier to understand the truth about Bitcoin security.
Bitcoin Has Never Been Hacked
The first thing that needs to be pointed out when it comes to the security of this cryptocurrency is that Bitcoin has never been hacked. All of the stories of stolen or hacked bitcoins are referring to online exchanges and wallets that are created as services outside of the Bitcoin blockchain. Saying that Bitcoin has been hacked because someone stole bitcoins from an online exchange is the equivalent of saying that the US Dollar has been hacked every time someone robs a bank. The problem with the security of bitcoins right now has more to do with user inexperience than the underlying Bitcoin protocol. The Bitcoin protocol is perhaps the most secure network in the world, but you still need to know how to properly store your bitcoins to keep them away from thieves.
Defeating the Best Hackers in the World
It’s important to point out that many hackers have tried to go after the Bitcoin protocol. The problem with trying to hack Bitcoin is that it is completely open source. This means that anyone can look at the source code to see how it all works. Since anyone can view or contribute to the Bitcoin source code, there have been plenty of different chances for some of the best security experts in the world to find flaws in the code that could be exploited. Dan Kaminsky, a noted security researcher who has advised everyone from Cisco to Microsoft, tried to hack the Bitcoin protocol back in 2011. In 2012, Wences Casares hired two separate teams of world-renowned security experts to try to hack the Bitcoin protocol for more than half a year. Those teams of hackers also failed. We can never discount the idea that there could be a flaw in the Bitcoin protocol that the best hackers in the world have all missed, but we’d probably see the Federal Reserve get hacked before Bitcoin.
How to Safely Store Bitcoins
At the end of the day, holders of bitcoins really just need to learn how to store their money in a proper manner. To be perfectly honest, you should never trust any online wallet or exchange with a large number of bitcoins The best option right now is cold storage, but that process is usually considered to be too much of a hassle for most users. Hardware bitcoin wallets are currently in the works, which should definitely help people separate their Bitcoin savings from the bitcoins that they use for day-to-day purchases.
Bitcoin is much more secure than certain reports in the media would have people believe, but there are still many improvements that need to be made. It really all starts with education and new innovations. While the security of bitcoins is still somewhat problematic, it’s something that should be solved by new entrepreneurs in the Bitcoin space over the next few years.