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Satoshi Nakamoto created and introduced Bitcoin in 2009. This decentralized virtual currency depends on a peer-to-peer network known as the blockchain. This blockchain creates a ledger that records every Bitcoin transaction. Thus, Bitcoin doesn't have a single entity keeping records or monitoring transactions. Also, you can't have physical Bitcoin. And because no authority regulates this virtual currency, its values can swing wildly depending on the crypto market factors.
Today, people take advantage of this fluctuation in Bitcoin values to trade it on platforms like the CFD Trader. Also called crypto exchanges, such platforms bring people interested in purchasing and selling Bitcoin together.
When Satoshi launched Bitcoin, many people thought it was not very worthy. However, Laszlo Hanyecz made the initial real-world transaction with this virtual currency by purchasing two pizzas in May 2010. At that time, he used 10,000 bitcoins to buy the two pizzas.
Going by the highest Bitcoin price in history, this amount would be around $650 million. The rapidly increasing Bitcoin value has prompted many people to want to purchase or trade this virtual currency. But many people have always wondered about the safety of Bitcoin. Here are reasons to believe that Bitcoin is a secure cryptocurrency.
Bitcoin Uses Cryptography
This digital currency uses a unique technology called the blockchain. Unlike traditional financial transactions, blockchain presents an enhanced technology that depends on cryptography and more secure concepts.
Ideally, blockchain depends on many volunteers to sign hashes for validating transactions within the Bitcoin network. These volunteers or nodes use cryptography to validate every Bitcoin transaction, after which the network records the details in a public, decentralized ledger. That way, the Bitcoin system makes transactions irreversible. What's more, this technology secures any Bitcoin transaction data.
Bitcoin Transactions Are Public
To some people, being public means transactions are not safer. However, the decentralized, public Bitcoin's ledger enhances transparency, meaning anybody in the network can access the transaction details. But, the entities involved in a transaction are anonymous because you can't link any real-world information to them. And this makes scamming or cheating the system very difficult.
Since all data is publically available, hackers have nothing to see if they hack the system. Instead, they can follow transactions in the public ledger.
Bitcoin is a Decentralized Virtual Currency
The distributed network for Bitcoin has thousands of nodes across the world. These nodes, or independent computers, track all Bitcoin transactions. They also validate every transaction. If something terrible happens to a single node, the others can continue working or pick the slack.
Having many nodes also means hacking one server can't allow somebody to compromise the entire Bitcoin network. Ideally, you can't steal anything that other servers and nodes can't prevent unless you control 51% of the servers and nodes. And this is extremely unlikely or even impossible.
Bitcoin Users Don't Need Permissions
Being decentralized and public means little if any authority must allow you to spend your Bitcoins. By lacking a regulatory body, Bitcoin remains open to anybody interested in it. What's more, lacking permissions means this virtual currency is fair and available to everyone.
These are the primary reasons why Bitcoin is a secure cryptocurrency. However, users must exercise caution when using this digital currency. In the past, some criminals have hacked crypto exchanges and stolen money from users. What's more, somebody can steal private keys and transfer the funds from your digital wallet. Therefore, Bitcoin users are responsible for exercising caution when using Bitcoin. Ideally, users should safeguard their Bitcoin the same way they protect the money in their wallets or bank accounts. Don't share your digital wallet's private keys like you wouldn't disclose your ATM PIN.
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