Bitcoin is the most prominent cryptocurrency today and the most controversial investment: many only praise it, others only criticize it. But the main question for those who are discovering this virtual currency is whether Bitcoin is safe.
Distrust in relation to Bitcoin makes all the sense in the world, since it is a market that emerged from nowhere and does not have any type of regulation.
Therefore, in this article we will give you all the answers you are looking for and help you decide whether or not to invest in this market.
But before we delve into the security of Bitcoin, check out the article What is Bitcoin? Clarify your doubts about digital currency to better understand how it works.
Distrust in relation to Bitcoin makes all the sense in the world, since it is a market that emerged from nowhere and does not have any type of regulation.
Therefore, in this article we will give you all the answers you are looking for and help you decide whether or not to invest in this market.
But before we delve into the security of Bitcoin, check out the article What is Bitcoin? Clarify your doubts about digital currency to better understand how it works.
Is the Bitcoin system secure?
Bitcoin is completely virtual and we know that in this world there are many types of fraud, failures, hacker attacks and cybercrimes. This is usually the epicenter of the concern that many people have about this currency that only exists virtually.Therefore, to know if Bitcoin is safe, you have to understand the technology behind its existence: the Blockchain.
The Blockchain is the system where all transactions are recorded. It is a chain of information blocks that records all transactions that take place in the world in encrypted form. Thus, purchases and sales of Bitcoin, for example, do not depend on a single server, but on a system open to all users.
The information stored in the blocks is automatically protected by a unique code. This “signature”, also known as a hash or proof of work, guarantees the interconnection of the system, since each block carries its own signature and that of the previous block.
But how does this ensure that Bitcoin is secure?
Simple: since the Blockchain does not have a central server, since each user acts simultaneously as client and server, to overthrow this system it would be necessary to eliminate all its users , which is practically impossible. This is how Bitcoin manages to stay safe and immune to overthrow attempts.Furthermore, to infiltrate that system, you would need a computer with a power greater than that of all the computers that are connected to that system. That is, a capacity unattainable for existing processors.
Therefore, the answer to the question of whether the Bitcoin system is secure is yes. The blockchain is so secure that its technology is being studied for various other uses.
Is the Bitcoin market safe?
That the technology of the Bitcoin system is practically inviolable is not in doubt. However, the vulnerability of this market begins to emerge when there is interaction with the user . In other words, exchanges (platforms for purchasing cryptocurrencies) and wallets are not secure.When you buy a Bitcoin, these coins are automatically stored virtually in a kind of wallet. There are different ways to store your coins, that is, different types of Bitcoin wallets . It is possible to have desktop wallets, completely online or even offline. This is where the security of this market begins to be worrying.
Like any other file you store on your computer, your Bitcoin wallet is exposed to virtual attacks by hackers . They can be accessed through traditional forms of hacking, using malware, for example.
There is nothing new in this type of attack. The malicious person sends you a virus that can enter your computer through a download or link. After infecting your desktop, this virus begins to access relevant information, such as your wallet address and password, and steal your funds.
Stock exchanges are subject to constant attempts at virtual attacks. There have been several cases where users of these companies have been left with empty wallets due to a general hack.
In December of last year, for example, there were two emblematic cases: approximately $62 million was stolen from the large NiceHash and the South Korean YouBit declared bankruptcy after suffering the theft of 17% of its cryptocurrencies.
Although there are some horror stories about hacker attacks against these online marketplaces, most exchanges are safe.
However, the recommendation is not to store Bitcoins on the exchange for a long time. Exchange is a service made to allow the transfer of cryptocurrencies, but it is not a bank.
A cryptocurrency wallet is a secure place to store cryptocurrency. Only traders leave their Bitcoins on the Stock Exchange. They do this so they can buy and sell coins more quickly .
Those who intend to hold the currency as an investment should store it more securely.
Another important point if you are thinking of buying bitcoins is that they must always remain with you. Therefore, it is essential to choose good software that performs this management. It's like your bank account, but the difference is that now you are the bank.
As with any other file, it is possible for Bitcoin to be stolen. However, if you are diligent and store your coins the right way, it is possible to make them extremely secure, much more protected than standard credit card data, for example.
Using a good antivirus, avoiding pirated programs, being careful with fake emails and websites are some of the essential measures to protect this type of property.
It is also possible to store bitcoins in a “paper wallet,” where there is no record of the wallet on a digital device. Instead, the owner of the coin prints a sequence of characters (including numbers and letters) on a piece of paper and keeps this document in a safe place.
Like investing in stocks, real estate funds and futures contracts, those who invest in Bitcoins are not guaranteed profitability at the time of purchase. Therefore, it is said that the investor assumes the risk of the investment .
A positive point that makes many investors say that Bitcoin is safe is the fact that it has predictable issuance. This is because there is a protocol that only allows the existence of approximately 21 million bitcoins, which guarantees deflationary protection of the currency.
One of the disadvantages of investing in Bitcoin is the fact that it is not regulated by any financial institution. Thus, Bitcoins are very exposed to financial speculation, much more than any other traditional asset that we know of.
By not having a defense mechanism like the traditional market, the price of Bitcoin can devalue by thousands of dollars in a few hours.
These sudden movements, which have even been recorded a few times, can take even the most informed investor by surprise.
However, Bitcoin's independence may be a good thing. In the long term, it is not affected by the usual instability problems in the currency markets, since there is no direct political interference.
This year, Bitcoin has faced a 23% devaluation. On January 1, one Bitcoin was worth $13,893. It reached a high of $17,252 in January, but was losing value. On December 5, the coin was worth $3,982.
In this article you will learn which are the main cryptocurrencies on the market, and the advantages and differences of each one.
What Bitcoin owns is a household name. It is the only cryptocurrency that most people have heard of, and its benefits cannot be understated.
However, there is no denying that Bitcoin is also one of the most volatile assets on the market today.
If you are thinking about entering this segment, don't forget two “old rules” about investing: never invest more than you can afford to lose, and always do your own research before investing your hard-earned money in anything.
The cryptocurrency market still has a lot to develop and to stay up to date with everything that happens in the segment, news, innovations and best investments, subscribe to our newsletter.
A cryptocurrency wallet is a secure place to store cryptocurrency. Only traders leave their Bitcoins on the Stock Exchange. They do this so they can buy and sell coins more quickly .
Those who intend to hold the currency as an investment should store it more securely.
Another important point if you are thinking of buying bitcoins is that they must always remain with you. Therefore, it is essential to choose good software that performs this management. It's like your bank account, but the difference is that now you are the bank.
As with any other file, it is possible for Bitcoin to be stolen. However, if you are diligent and store your coins the right way, it is possible to make them extremely secure, much more protected than standard credit card data, for example.
Using a good antivirus, avoiding pirated programs, being careful with fake emails and websites are some of the essential measures to protect this type of property.
It is also possible to store bitcoins in a “paper wallet,” where there is no record of the wallet on a digital device. Instead, the owner of the coin prints a sequence of characters (including numbers and letters) on a piece of paper and keeps this document in a safe place.
As an investment, is Bitcoin safe?
Bitcoin can be considered an equity investment , as it has great lucrative potential, but high risk.Like investing in stocks, real estate funds and futures contracts, those who invest in Bitcoins are not guaranteed profitability at the time of purchase. Therefore, it is said that the investor assumes the risk of the investment .
A positive point that makes many investors say that Bitcoin is safe is the fact that it has predictable issuance. This is because there is a protocol that only allows the existence of approximately 21 million bitcoins, which guarantees deflationary protection of the currency.
One of the disadvantages of investing in Bitcoin is the fact that it is not regulated by any financial institution. Thus, Bitcoins are very exposed to financial speculation, much more than any other traditional asset that we know of.
By not having a defense mechanism like the traditional market, the price of Bitcoin can devalue by thousands of dollars in a few hours.
These sudden movements, which have even been recorded a few times, can take even the most informed investor by surprise.
However, Bitcoin's independence may be a good thing. In the long term, it is not affected by the usual instability problems in the currency markets, since there is no direct political interference.
This year, Bitcoin has faced a 23% devaluation. On January 1, one Bitcoin was worth $13,893. It reached a high of $17,252 in January, but was losing value. On December 5, the coin was worth $3,982.
Is it safe to invest in cryptocurrencies?
The cryptocurrency industry is still very new, and the technology behind it has many people excited . Assuming all goes well, and all of this technology starts to become widely adopted around the world, then the value of legitimate cryptocurrency projects could explode.In this article you will learn which are the main cryptocurrencies on the market, and the advantages and differences of each one.
What Bitcoin owns is a household name. It is the only cryptocurrency that most people have heard of, and its benefits cannot be understated.
However, there is no denying that Bitcoin is also one of the most volatile assets on the market today.
If you are thinking about entering this segment, don't forget two “old rules” about investing: never invest more than you can afford to lose, and always do your own research before investing your hard-earned money in anything.
The cryptocurrency market still has a lot to develop and to stay up to date with everything that happens in the segment, news, innovations and best investments, subscribe to our newsletter.
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