Cryptocurrency, the business of the future and the most lucrative investment opportunity at the moment according to many experts and entrepreneurs. Digital currencies revolutionized the way people perceive money and everything related to the economy in general, but unfortunately, they are still not nearly as present as they could be.
This largely has to do with the fact that average people do not know a lot about it. They are not familiar with the benefits virtual currencies can have for them and their earnings and are therefore reluctant to get into the game and make financial changes. Things are not that bleak, however, far from it, as more and more people are slowly realizing the potential and deciding to diversify their portfolios in favor of virtual currencies.
Those still hesitant about joining in on the fun are largely worried about losing their money in the process, or perhaps their personal information due to a hacker attack. All in all, it can be said that cryptocurrency security is the reason why we do not have more investors, and people generally enthusiastic about virtual currencies.
With this in mind, the article before you is going to reveal the most important things you should know about digital currencies and their security, letting you know that there is nothing major to worry about. At least not more than you are already worried about traditional, fiat currencies you use every day. If you are looking to learn more about the topic at hand and perhaps decide to invest, make sure to visit www.advfn.com.
1. Blockchain Technology
The basic principles on which the digital currencies of the world are able to exist and work has to do with the technology that powers them. It is called blockchain and you have probably heard about it on many occasions in the last ten years. It refers to the transaction records known as blocks that are stored in public databases.
These databases of every single virtual currency transaction are also known as chains, hence the catchy name of blockchain. This is essentially a network of peer to peer nodes (computers and servers dealing with crypto) that are mutually connected. A far more useful and popular name for the chains and blocks together is ‘digital ledger’ as it is literally a ledger of all the transfers between people. So what makes this tech special you may ask? Well, it is quite special indeed due to the fact that every single transaction has the digital signature of the owner.
This approach prevents the data from being tampered with and keeps it safe. It is a highly secure way of keeping every transaction safe and sound, away from the eyes of anyone who means them harm.
2. No Third Parties
Directly relating to blockchain technology, is perhaps the biggest fan-favorite feature of cryptos. They are decentralized, which means there are no third parties involved like there are with regular money. With dollars, euros, pounds, and franks, the governments, banks, and other institutions impose a ton of laws and rules that people have to follow if they are to use the services and the money itself. Worst of all, there are hefty fees involved that award those third parties with a small percentage of every transaction.
These are minuscule, but they do add up between the millions using the same types of service. In the world of cryptocurrencies, there are only two sides to every transaction, the buyer and the seller. Or, alternatively, the sender and the receiver. No intermediaries are overlooking the transaction and nobody is getting the cut simply for providing the means for it to be carried out. All the money stays between the two parties. This is another reason why security is easier to implement and harder to breach.
When you are using regular money and bank accounts, everything can be traced back to you in some capacity. This is especially true if you are doing everything digitally. Just remember how much info you have to put in to order a simple T-shirt online. They ask for your full name, age, address, and phone number. Then, you must also put in your financial info including the card number and the security code. What else is there for them to take?
Chances are you usually shop from a number of different places, which means dozens of shops and services have your data stored in their ledgers. Although it is illegal to use it in any way, in case of a hacker attack those who are not supposed to have it may use it for their suspicious deeds giving you a ton of problems. None of this exists in the world of digital currency. Transactions are easy to do and pretty straightforward, and best of all, none of your personal data is connected to it. Everything is done through electric wallets that have your crypto balance in them.
Each wallet has a unique address that you only use for transactions. Each transaction is encrypted and practically impossible to hack into while it is happening. What is more, the wallets themselves remain anonymous, and despite being public, nobody knows who is behind them. Nothing except the lengthy code is displayed, as well as the balance.
Anonymity is very important when it comes to trading large amounts online. Traditional Brokers apply strick KYC Verifiction Proccesses. They ask traders to send them via email their governement ID and a proof of address (most often this is a utility bill). However, there are Cryptobrokers (Brokers that use a deposit method Bitcoin) dont ask traders to verify their account. Traders can trade Cryptocurrencies anonymously using leverage in cryptobrokers with no KYC Verification, check the following list.
Conclusion and Takeaways
As you can see from these three relatively easy to understand entries to our list of crucial security features of cryptocurrencies, they are very safe to use by anyone. If you are computer savvy and know how to securely navigate the generally dangerous and suspicious waters of the web, you have nothing to worry about. The most important thing to remember is never to give anyone access to your electronic wallet and not even tell them what your unique code is.
During transactions, whether you are buying, selling, or transferring a certain balance, you and the wallet on the other side (we say wallet and not person because that is exactly the point of the anonymity) are the only ones to see it or interact with it. When the transaction is complete, it can never be overturned and reversed. Completed transactions are stored in the ledger as proof and that is it. Hackers, cybercriminals, or anyone else looking to take advantage of you are powerless.