Will Bitcoin Succeed?
When you work for a security company, sometimes people think you must know everything there is to know about technology. So sometimes I get asked, “Will Bitcoin and other cryptocurrencies succeed?”
Unfortunately, I’m an engineer, not an economist. I can’t speak to how big central banks like the Federal Reserve in America, the Bundesbank here in Germany, or the Bank of England in Britain will react to it. Maybe they’ll try to regulate it. Maybe they’ll try to ban it. Who knows? Ask an economist or a banker; they might know better.
What I do know is that more and more brands are accepting cryptocurrencies as payment. In America, for example, online tech stores like Dell and Newegg have started to accept bitcoins. Not only can you buy your gadgets with bitcoins, but you can also go on vacation with them — online travel agencies like Expedia.com and airlines like airBaltic accept bitcoins as well.
However, they’re not the only ones who have embraced Bitcoin. Cybercriminals have embraced it too. If you’re affected by ransomware, you can pay for your ransom with bitcoins. Cybercriminals buying goods and services from each other are using it, too.
Why are these crooks using Bitcoin? One reason may be they think that it’s safe and anonymous. Certainly, many of its biggest supporters say the same thing. However, that’s not really accurate. Yes, your Bitcoin address doesn’t directly say anything about you, but all transactions are part of the blockchain – which means anyone can see it.
Any organization with skills in organizing large data sets and gathering information from various sources could – if they wanted to, de-anonymize Bitcoin transactions. It’s not as safe as people think. Let’s not even go into detail about how malware is trying to steal bitcoins from the wallets of users.
So, is Bitcoin the future of cryptocurrencies? What I do know is that cybercriminals like it just as much as real-world currency, and it has its own share of risks too. In some ways, the new digital currency is just like the old ones.
For more of my thoughts on Bitcoin and other cryptocurrencies, watch the video below titled Bitcoin: Here today, gone tomorrow?.