Cryptocurrency is a digital currency that uses cryptography for security; it makes easy to transfer funds between Internet users. Bitcoin is the first Cryptocurrency introduced in early 2009. Since then many cryptocurrencies have been developed and traded in the market but bitcoin captures public attention in 2012 because of its high cryptographic security.
Bitcoin allows users to process the transaction in a very efficient and inexpensive manner. Second major facility is that you can receive and make payments on Bitcoin network with little or no fees so there is no need to open any account. Bitcoin stores in digital wallet and can easily transfer through computer or smart devices e.g. Smartphone, laptop or PDA, by entering the recipients’ address and amount of payment. Many wallets can obtain the recipients address by scanning QR code or NFC (Near Field communication).
From the security perspective, it starts with block chain, and primary chain block called genesis block. Each block contains a hash – a cryptographic string data from the previous blocks, so origin block is strongly responsible for identify every genuine bitcoin. It is the most powerful innovation because it eliminates chance to spend double.
Main security threat in Bitcoin is its uncontrolled exchange that stores Cryptocurrency. Bitcoin exchange was hacked in Hongkong, Czech Republic. The attackers used social engineering tactics to unveil Bitcoin network. Attackers had stolen over $1 million in two attacks in the month of late October and November2013 respectively. They arranged cloud server that hosted input.io’s infrastructure, which is responsible for bitcoin wallet and quick payment.
In further, transaction made by the user is inevitable and buyers cannot recover their funds. So damage can happen to buyers, so it is good to store bitcoin offline. Besides some security threats, there are cons of Bitcoin like the one it is too volatile, as web shops would have to adjust their price almost daily.
It is untraceable, so consumers do not need to be afraid of tracing by government or any outsider. It encourages illegal business. People can buy or sell illegal items on the Internet. If your credit card is hacked or stolen, then it is difficult to recover your money. There is no tactic to recover theft or hacked Bitcoin.
Bitcoin has to wait until some security vulnerabilities are cleared. Besides cyber criminals, it proves beneficial if it becomes safer. Many entrepreneurs accept Bitcoin in last six months. It has a bright future, but we should overcome bitcoin errors and protect it from hacking.