Before 2017 and the cryptocurrency market surge that sent Bitcoin to $20,000 it seems there were fewer mainstream financial experts interested in digital assets. Suddenly Bitcoin was making people rich and out came the critics. Some had an ax to grind and some were just mashing sour grapes, but all of them were quick to point out what they claim are safety issues with Bitcoin. Is Bitcoin really safe? Let’s explore the critics’ theories.
Bitcoin Isn’t Safe Because Hackers Can Steal It – WRONG
In a Bitcoin article that was published on the Experian website in 2017, the credit reporting agency took issue with the safety of Bitcoin by quoting several financial experts who proposed to poke holes in the world’s most famous cryptocurrency. Experian is one of the largest credit agencies in the US. When you apply for a loan or even a rental home, Experian is the one who provides your credit history to lenders and landlords. Remember that. There will be a test in a few moments.
The expert in question was a Jack Miller from California. Miller stated that Bitcoin and other crypto tokens were a lot riskier than regular financial transactions. He cited no regulation (of course he did) as a reason for the lack of security, but the article then went on to explain how Bitcoin’s storage necessities make it vulnerable to hackers.
Another expert named Andrew McDonnell told readers that because all Bitcoin is stored in digital wallets it is vulnerable to hacks like the one that took down the Mt. Gox crypto exchange in 2011. He also spoke about how important it was for people to keep their public and private keys protected.
There are some problems with McDonnell’s statement. First of all, protecting your public and private keys is indeed important. That is not a problem with the safety of Bitcoin. If you fail to protect those keys that is a problem with you. You are responsible for keeping track of your keys.
Secondly, all Bitcoins are not stored in exchange wallets, wallets that are provided online, or wallets that are continuously connected to the Internet. Some tokens can be stored on a paper wallet or in a hardware wallet that you carry on your person. So, in essence the opinion of these so-called experts are wrong.
Oh, about that test. Here we go. Which credit reporting agency just reached a settlement in which it is required to pay billions of dollars to individuals who had their complete personal information, including full social security numbers, stolen in a massive hack? You guessed it. Experian. Maybe they should have been thinking about how to protect their own platform instead of poking holes in Bitcoin.
Bitcoin Isn’t Safe Because it is Used by Anonymous Drug Lords and Hitmen – WRONG
The next point made by the Experian article is that Bitcoin is not safe because it is the currency of choice of pretty much every supervillain that walks the earth. From reading the article you would believe that Lex Luthor and Dr. Doom are the biggest supporters of Bitcoin, and they are using it right now to achieve their goal of world domination because it is anonymous.
There are some problems with claiming that Bitcoin and other cryptocurrency tokens can be used anonymously. Yes, it is possible to buy and sell Bitcoin in some cases without revealing your personal identity. It is also possible to use Bitcoin for purchases that you might want to keep anonymous. As for Bitcoin users being anonymous, not so much. It’s very easy to connect many people with their Bitcoin, especially those who use Bitcoin on a crypto exchange.
Crypto exchanges are required to obtain personal information from users and verify their identity. That means when you link a bank or a debit card to the crypto exchange and make a crypto purchase you are creating a trail. In fact, the trail that you may create is pretty strong. Everything that gets recorded on a blockchain, including identifiers for your transactions, is preserved for all time and cannot be altered.
Yes, Bitcoin does offer some measure of anonymity, but it’s not like what you think. It isn’t a currency that is primarily used for drug transactions and weapons sales. That was common on the Silk Road website on the Darkweb, but people forget how that worked out. The mastermind behind the Silk Road is in a maximum security jail and might never see the outside world again.
Bitcoin is used today for buying web hosting, paying freelancers, supporting fundraising campaigns and many other noble works. It is not the exclusive domain of villains. You can also get a crypto debit card to spend bitcoin.
The Misinformation Campaign About Bitcoin
Okay, to be fair the Experian article did close with some valid suggestions for keeping your cryptocurrency safe. Our problem with the article is that it represents a bias against crypto that is encountered far too often in the world today. Many mainstream investors and financial analysts seem to be on a mission to discredit cryptocurrency en masse. Why?
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Some of them are probably angry at themselves for missing the boat. They ignored Bitcoin forever and then got upset when some people made millions. Some others are just dinosaurs like Warren Buffet who can’t understand crypto so they don’t believe it is viable as an investment or as a currency.
The joke is probably going to be on them. Bitcoin is not going anywhere anytime soon. It is quite possible that we are on the cusp of a cashless society where Bitcoin and other crypto tokens will be king. When that happens a lot of traditional financial analysts and experts are going to be out of a job. Traditional investors could lose money if they are too stubborn to accept Bitcoin as valid. You can fully expect that some people will ride their piles of cash into the sunset when they are forced to exchange it all for digital money like Bitcoin.
Is Bitcoin safe? You now have an alternative point of view that should help you answer that question.