Approach Bitcoin With Caution

Bitcoin is a digital currency which uses a special security technology called blockchain and allows the users to remain anonymous. There remain major security issues regarding bitcoin and digital currency which must be resolved before it can be considered safe. Despite all the fanfare I think there is some need for sober second thought.

Once you look under the hood of bitcoin you realize that there is an expiry date given the maximum limit of 21 million bitcoins that are “mined” in an increasingly expensive process presently done in massive mainframes the size of football fields. It is also true that the infamous website known as the Silk Road, which trafficked all sorts of illegal goods such as drugs and guns, used bitcoin as the main currency.

Criminals like bitcoin due to its unregulated and anonymous nature. Police computers systems in the United States were hacked and held for ransom to be paid in bitcoin. The same method of payment is currently being used for identify theft, or in this case online identity ransom. Due to its digital nature and other attributes, bitcoin has made ransom delivery seamless and untraceable and payments can be made without an in-person meeting. bitcoin transactions are also irreversible, so victims are unable to reclaim stolen money. Witnesses that appeared before Canadian Senate committee meetings on this subject raised the issue of serious abuses and fraud which involved bitcoin.

There is a libertarian spin in the promotion of bitcoin buffered by the claims that bitcoin “proved” two things. The first is the idea of a working digital currency; bitcoin was not the first nor will it be the last. The second aspect where bitcoin claims success is the Blockchain

Originally appeared at: http://www.huffingtonpost.ca/celine-hervieuxpayette/bitcoin-madness-or-innova_b_7899448.html