Bitcoins has laid its foundation such that many people would become the owners of bitcoins in the future. The transactions using bitcoins will be fast, and there is no fee for national transactions, and only a minimum amount of fees will be incurred for international transactions. Bitcoins are digital currencies, and they can be stored in only digital wallets, which are like software or a file, composed of the combinations of private keys and a public key. But many traders still are afraid of security concerns as they happen in a virtual environment. If a user loses money, there is no one to complain about as intermediaries between the user and the bitcoins. This article makes a deep discussion about whether a bitcoin transaction is safe or not, in the following sections. To start bitcoin trading you can visit https://btcrevolution.io
Are bitcoins transactions safe or not?
After 2009, after Satoshi Nakamoto, the founder of bitcoins, bought his first bitcoin and sold it to a famous cryptographer. After his move, many joined the group and helped make the bitcoins bloom in the cryptographic industry. During 2010, 2 unknown people made their first move to sell bitcoins in exchange for two pizzas. They sold 10,000 bitcoins for buying two pizzas; at present, the rate is 1.2 million dollars!! Though bitcoin price value fluctuates, people still can get more returns with bitcoin trading. But people question what about safety? Yes, bitcoins are very secured and lest see on what basis they are secure.
- The bitcoins are encrypted with a hashing algorithm and asymmetric key encryption.
The blockchain technology forms the backbone of the bitcoin transaction. Every transaction is recorded as blocks and then added to memory pools. From memory pools, the miners do the mining process, which involves solving complex mathematical problems.
Once the miners solve the problem, the block will be given a hash code, which will be generated based on the previous block’s hash code using the hashing algorithm. The hash code will then be encrypted using asymmetric encryption, where a sender will be given a private key to send bitcoins and a public key to receive the bitcoins. After this, this block will be added to the blockchain.
Once the blocks are added to the blockchain, it cannot be altered, and hence bitcoin transactions are highly secured.
- Bitcoin transactions are transparent.
When a transaction is initiated, the miners will create and block and add to the blockchain, broadcasting about the new block to every node connected in the network. So, all the bitcoin users connected in the bitcoin will see the transaction details like the amount of transacted bitcoins, date and time of bitcoin transaction, and lots more. But no personal information related to the bitcoin address will be revealed to other bitcoin users.
- Decentralized functioning of bitcoins
Bitcoin transactions are recorded in the blockchain, a very large database, which functions in a decentralized manner. So, there is no only server maintaining all the bitcoin transactions. There are more than 1000’s of bitcoin servers functioning all over the world, and more than 10,000 nodes function independently. Hence, even if one server fails, the other servers can make up for the absence. Due to decentralized access, if there is a change in the transaction in one block, it will be visible to all other blocks, and hence the bitcoin transaction ensures safe transactions.
Safeguarding your wallets
Your wallet is where all your bitcoins can be moved to sell and buy goods or services. The wallets will be composed of one or more private keys and a single public key. So, the safeguarding wallet is in the hands of bitcoin users. The wallet can be stored in the cloud or on your desktop or obtained from online service providers. When a wallet is stored in the cloud, your entire bitcoins will be lost if the system crashes. When stored on the desktop, and if they are connected to the internet, there is a possibility that malicious user may attack or a virus may attack the files. If you store online service providers through a web browser, you will use the service provider’s wallet. So, there is a possibility to hack or sudden server crash. So, always keep a wallet backup, which will help you in recovering back lost wallet.
Thus this article has discussed bitcoins from a security perspective and made us clear that bitcoins are highly secured.