Bitcoin’s Security Challenges

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Bitcoin wallets need to be kept safe and secured, and encrypted. Huge amounts of Bitcoin should not be stored in clouds, stocks and markets. Do not keep a backup copy of your wallet unsecured. Having good and updated antivirus software on a PC with a Bitcoin client and fully updated OS and third-party software is essential. Or, as Brandt said:

Bitcoin needs its own version of the Pinkerton men, bonded and certified professionals whose job is specifically to safeguard the storage and transfer of bitcoins, and ensure that exchanges are performed fairly. I guess it would have to be something akin to the Nevada Gaming Commission, with the rights to waltz into a bitcoin exchange data center and take a look under the hood at any time. I guess it still kind of feels like funny money, but at a little over $1000 per bitcoin in today's prices, I personally would need more assurances than just a promise to do no evil, and a handshake.

Government, too, needs to step up to the plate. The Senate Committee on Homeland Security and Governmental Affairs has been alerted of the emerging threat and criminal exploitation of virtual currency systems and has held hearings with experts to discuss the concerns, particularly involving regulation, surrounding crypto-currencies.

The crypto-currency known as Bitcoin was first introduced in 2009 in a paper published by Satoshi Nakamoto. As Kaspersky Lab described the e-currency:

Named "Bitcoin: A Peer-to-Peer Electronic Cash System," the paper defined the foundations for a distributed, de-centralized financial payment system, with no transaction fees. The Bitcoin system was implemented and people started using it. What kind of people? In the beginning, they were mostly hobbyists and mathematicians. Soon, they were joined by others – mostly ordinary people, but also cyber criminals and terrorists.

Since the introduction of Bitcoins in 2009, they have received a lot of attention: some of it good, some of it bad. Just like any other crypto-currency, they’ve been associated with numerous scams, hacks/thefts, defunct "stock exchanges," and reported losses of wallets containing massive amounts.

Kaspersky Lab’s experts explained that Bitcoin really began to hit its stride in 2013, in part because they are a secure, anonymous, way of paying for law-abiding citizens, especially for those who want to fly underneath the NSA’s surveillance radar.

Bitcoin as a currency, itself, seems to function as-advertised, according to Andrew Brandt, director of threat research at Blue Coat. The math surrounding the creation and transmission of value through the currency exchange network is scientifically sound.

As global commerce will only increase, e-currency in general, and in particular Bitcoin, could play a major role in how consumers and enterprises alike pay for goods and services. But first, it has to solve its security issues.


Related Topics : Unisys, Stimulus Package, Security Breaches, Symantec, Electronic Surveillance

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