Bitcoin has received mixed opinions since its inception in 2009. It came into existence through an anonymous person or group called Satoshi Nakamoto, but to this date, there is one clear thing—it was a revolution.
Currently, on the day of 7th Feb 2020, its value is $9,794. The value of bitcoin, however, is beyond its value of a currency (although the currency does play a major role).
It brought in a new perspective on currencies without the involvement of government or banks. It brought in new definitions of private transactions and privacy in general. While every new technology comes with apprehensions owing to their drawbacks, it is still a very viable mode of currency.
In this read, let’s walk through the basics of bitcoin, which has been around for over a decade now. Along with the avenues of cybersecurity that it has opened up for black and white hackers alike.
What is Bitcoin?
Bitcoin is a form of cryptocurrency that lets you carry out peer-to-peer transactions. A bitcoin is stored in a digital wallet and the only way it distinguishes is through the number that is assigned to you. This number is the only identity associated with you, no name, no address—zilch.
This bitcoin is sent online, without any middlemen. There are no banks involved or any wire transfers. It is like sending money without any restrictions of any sort and mostly without any security hassle. It can be purchased by spending your usual euros and dollars. Every bitcoin transaction is broken into blocks, that are made into chains to build a blockchain. The legitimacy of every transaction is verified using mathematical calculations made by miners. Thus, the proof of your bitcoin legitimacy is a mathematical calculation.
This vouch of privacy makes it an ideal mode of transaction—anonymity, security, seamless—all the boxes check out.
Bitcoin paved the way for blockchain
Blockchain is a decentralized ledger for all the peer to peer transactions which came into the picture because of bitcoin. Besides the currency value of bitcoin—this value of security is almost irreplaceable right now. There is no technology which provides this level of protection while negating a third-party interaction.
In today’s world of IoT, and 5G—blockchain is of immense value. It didn’t just introduce concepts of transactions but also new philosophies to carry out all digital communication and transactions.
Questions like if this can be as secure, then why can’t all kinds of communication come with this level of privacy? What stops us from going forward towards more secure systems? Is it only because of the lack of involvement of other enterprises like banks that stops us? Or is it because of the security concerns that arise with the anonymity?
These questions make us think harder about bubble wrapping security some more with more layers. Embracing blockchain completely is still a distant future. But, meanwhile, there are concepts where we can see a revolution.
Cybersecurity with blockchain
The anonymity with blockchain is often associated with the term pseudonym. This is mainly because of the public nature of bitcoin transactions. Your identity is secure, but the person you conduct a transaction with can see the address associated with your digital wallet, and they could look at your future transactions with this number.
Since the inception of bitcoin, it has been a favorable nature of the transaction for cybercriminals as well owing to the same anonymous nature. But, due to this address, several of them have also been busted by the police officials. So this ‘almost anonymity’ is still a good aspect of blockchain as it masks your identity, at least.
This provides so much more security than showing up with your signature on a check. The opportunities for identity fraud is greater with traditional transaction methods. You could leave a receipt somewhere which might consist of some Personally Identifiable Information (PII). Someone could get you to sign a check wrongly. These are very plausible scenarios. Bitcoin transactions with blockchain associate you with a number, and if someone tries hard, then your IP address. There are several methods to bypass this, too, such as Onion routing that hides your IP address during transactions.
Your data is safe from breaches
While you utilize several banks to carry out transactions, you are giving them crucial data. This third-party is now responsible for your money as well as data. What happens when this bank is breached? Banks have been at the crux of cybercriminal’s attention. Data breaches at banks are not unheard of. This is why several businesses are now opting to make transactions on bitcoin as it doesn’t need your PII.
A classic example of this is the data breach at Desjardins. Here, a bank’s employee revealed PII of several employees and customers putting them at permanent risk. The bank has offered them Insurance against any fraudulent activity, but will that really put all the victims at ease?
This is how the transaction of bitcoin and blockchain paves the way to look into other transactions and storage options. That brings us to our next point.
A very popular aspect of blockchain is its decentralized nature. This has gained popularity considering the current state of centralized storage in organizations. If a hacker gets a hold of your network, all your valuable data would be in one place. It is essentially like aiding your hacker to steal more.
Businesses are now considering blockchain-based storage methods. This ensures that whenever a bad actor tries to get hold of your data, they can’t get hold of all of it- in case they break-in.
Privacy with communication
Organizations today are moving towards customer-centricity. To be customer-centric, businesses need data from customers. This can be obtained once they talk to them across various channels including social media. This metadata needs to be secure as it might contain crucial customer information. But, unfortunately, they aren’t always secured. The data is not even encrypted sometimes. Using blockchain for such communications is a way to keep this data safe.
Like every technology, bitcoin and blockchain have their pros and cons. It can be a boon to you as well as a bad actor. But equipping yourself with the right technology with the right philosophy is the way to approach cybersecurity. This is precisely what they enable you to do.