Bitcoin has been so far the most successful cryptocurrency. Unlike other cryptocurrencies, there has been a decrease in the Bitcoin cash value for a few months. All cryptocurrencies have seen volatility in prices as a goal to be recognized as one of the world’s most popular currencies. This can be due to security concerns that can be faced by these cryptocurrencies such as double-spending, wallets safety, and miners which are usually engaged in selfish mining. In this blog, we will discuss some of the most common issues that can be very destructive towards bitcoin.
A Wallet That Is Susceptible
When it comes to theft and hacking attacks, one of the most common susceptible that is seen in this case is a vulnerable wallet. A report by a team of researchers said that loopholes had been found in hardware wallets that can be victimized easily and it also applies to the most heavily encrypted hardware wallets. These can have harsh effects on the privacy of the bitcoin as the user’s fund can be transferred to another account.
Cyber Attacks and Hacking
Cryptocurrencies exchanges have seen many of the cyber attacks, and this instills fear of the potential threat to the most popular cryptocurrency. Reports have said that cyberattacks have been done on a large number of bitcoins that can have a value of more than 6 billion dollars.
Minings That Can Be Regarded As Selfish
Regular use of bitcoin’s proof-of-work itself has an underlying threat. Mining tools having command over significant mining ratios can be used in selfish mining. Also called block withholding, a pool can be used to mine a block based on their computational capacity. And then hide it from genuine miners instead of transmitting new block to the network.
Double Spending of Bitcoin
Although various actions have been established regarding solving this concern, there is still a fear of transaction risk called double-spending in which the hackers try to spend the bitcoin two times in the same transaction. Let’s see an example of this. Suppose, there is a person Sam who has purchased something from the second person named Tom and Tom sends X bitcoins to Sam. At that time, Sam can execute a similar transaction to an address which he is controlling using the same bitcoins. Tom has a belief that Sam has sent money and may not verify it. Sam’s address may be credited with the transaction and Bob may not have examined the transaction and irreversibility is pointless in this case.
Thus, security concerns and risks facing Bitcoin are majorly related to its use and not of the blockchain network. Although bitcoin is the first most successful implementation of cryptocurrency, it is still in its immature state and developers are working on making it more secure. Most of them can, therefore, be revived so as not to worsen the problems associated with the cryptocurrency. So, bitcoin investors should be aware of these concerns and how their investments can be affected by these issues.