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Bitcoin, and cryptocurrency as a whole, is significantly changing the way the world of finance and transactions work. There’s still plenty of ways to go when it comes to introducing Bitcoin into everyday life, but it’s a future that could very much be a fact for most of us, if not all. With Bitcoin and its fellow cryptocurrencies offering a way for transactions to be done far more securely and privately, banks and other financial institutions may very much become unneeded in the world of online transactions – and sometimes even in store too. Whether it’s ordering online, or playing casino games online, Bitcoin’s main selling point is its safety – but how is Bitcoin changing our business security?
Our Digital Identity
Every monetary transaction made, whether over the internet or by card in a store, has a traceable history, but Bitcoin on the other hand offers anonymity and privacy in a way that any other way of spending digitally does not. This sense of anonymity and privacy is what draws most of Bitcoin’s users to the cryptocurrency. While Bitcoin is not the most anonymous of all the cryptocurrencies, it was the first and ultimately paved the way for the others to follow and improve on the technology and the concept that it created and used. Our digital identities when using Bitcoin don’t exist, something that you can’t have or utilise when it comes to the bricks-and-mortar banking that we’re used to. While banks are changing and adjusting to this new technological age, it’s a change that isn’t happening quickly enough.
The world of ecommerce is a growing industry, but it simply doesn’t offer everything that Bitcoin can. The security of the blockchain technology and the privacy and near-anonymity is important to the Bitcoin users, and it’s something that you just can’t get in everyday banking and ecommerce in the way you can with Bitcoin and the other cryptocurrencies that make up its altercoins. There are a number of different types of online security to protect our digital identity, and the implementation of the blockchain is just one example. On top of this, there is Cloudflare which aims to make the Internet work in ‘the way that it should’, and many other security options for businesses to choose from. In addition, Google itself is looking to help protect consumers from businesses that are unsecure, with the new Google Chrome update looking to flag sites as ‘Not Secure’ if they haven’t updated their website’s security to HTTPS, showing just how important online security is becoming for some of the biggest businesses in the world. Now, the growth of the Bitcoin and blockchain technology is likely to put more pressure on businesses to improve their sites’ security.
Bitcoin Encryption Technology in Businesses
While Bitcoin is still a controversial topic to most, the blockchain and encryption technology that can be found behind this cryptocurrency is unprecedented and most definitely of use to banks and businesses alike. The encryption technology that Bitcoin uses is called Asymmetric Key Encryption. When you download the bitcoin wallet to store your Bitcoins, you are assigned two keys – a public key, and a private key. The public key is given to anyone that you wish to receive payments from, but your private key is used to decrypt any information – transactions – that has been encrypted with your public key. What this means, essentially, is that anyone with your public encryption key can send you Bitcoins, but only you can decrypt it to receive the payment so long as you are the only person with the private key.
Using this kind of encryption within emails and the cloud in businesses could protect the security and privacy of high-security documents or confidential data. While there is already a similar system on some email servers called Pretty Good Privacy Encryption, hacking can easily give someone access to your private encryption key as they are stored on an email server. Bitcoin encryption, however, would take away this risk. It’s important to remember, however, how easily human error could make Bitcoin encryption dangerous. Forgetting or losing your Encryption key can mean you’ve lost your data for good.
Is Bitcoin a Threat to Security?
While Bitcoin technology can help improve security, it arguably could pose a risk to security too. The opportunity to remain anonymous while using Bitcoins has attracted cyber Criminals to the currency. Those that operate on the dark web will often use this currency as it makes them virtually untraceable, and the lack of centralised bank or institution means that there is no one overlooking the spending and what and how it’s being used. There is no company or sole person who has control over this currency, and so it’s entirely possible for this cryptocurrency to be used unlawfully.
If your company were to fall victim to financial fraud of any kind, or find that you’ve had a breach, the money that you have lost will be impossible to get back once it has been transferred into Bitcoin, which is perhaps the biggest risk of using this currency.
How to manage the risks of Cryptocurrency
With the increased popularity and value of Bitcoin, there are always going to be people that want to take them, and some of those people have Malware to help them do that. The malware emerging has the ability to not only steal Bitcoins from your wallet, but any of the other 200+ cryptocurrencies that are currently in circulation. While there is no way to avoid this completely, it’s important to remain agile and vigilant with your Bitcoin Wallet. Keeping informed about the risks that you may face can help you keep your finances safe from the criminals looking to take it.
By monitoring any guidance, understanding the AML and making sure that you know the fraud and cyber risks associated with Bitcoin can help you avoid any and all slip ups that might cause you to fall victim to the risks of owning cryptocurrency. Looking into which businesses do and don’t accept bitcoins and which are licenced can save you from accidental fraud, ultimately making using Bitcoin within your business a safe, secure method of finance.
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