AuthorEduardo Bailey

Is Bitcoin safe?

Many people are convinced that digital coins will “change” the world and they are freaked out about the prospect of investing in Bitcoin, the cyber currency. Before you “lose your head”, however, you must first ask: is it safe?

Bitcoin is decentralized

What makes Bitcoin more secure than any other transaction system? Bitcoin is a decentralized payment protocol. So, the transaction system is not managed by a central location, but by millions of users in the network. Their computers are also known as nodes in the Bitcoin world.

In addition to the nodes, the Bitcoin network also consists of miners. These are users who use high-speed computers and video cards to solve cryptographic puzzles and add transactions to the blockchain. At the same time, that’s the great thing about Bitcoin: it is managed by everyone.

Do you want to influence Bitcoin’s transaction system? Then you need access to more than half of all computers in the Bitcoin network. This is also known as a 51% attack. The Bitcoin network is currently so extensive that this is almost impossible.

No one can change blockchain transactions

The design of the blockchain is another characteristic of Bitcoin that has to do with the security of Bitcoin. All Bitcoin transactions are recorded on the blockchain. A new transaction block is added every ten minutes.

This new block is connected to the preceding block which is connected to the previous block. Each block also contains some information from the prior block.

But what makes this chain so secure? The further you go back in the chain, the more difficult it will be to manipulate the blockchain. That would mean that you would still have to manipulate all blocks afterwards. And all this while the Bitcoin network is already working on the current chain. Alone, it is impossible to compete with the thousands of nodes in the network. If you want to do that, you’re always behind the times.

Security is also your task

Bitcoin is based on security. But you can also take measures to use the Bitcoin network securely. Below we give you some tips so that you can use Bitcoin as safely as possible.

Preferably use a wallet

This is the safest way to store your Bitcoin. A hardware wallet ensures that access to your bitcoins remains offline and encrypted. This way, only you have access to your own bitcoins.

Many people keep their bitcoins on a cryptocurrency exchange or on an online wallet. It’s just a lot less certain. An exchange is a central party. What if the stock exchange will be hacked? Then there is a good chance that your bitcoins will be lost. The private keys of your bitcoins are stored online on an online wallet. This also increases the risk of losing your bitcoins. A hardware wallet is therefore a wiser choice!

Keep your backup sentence offline

Whether you’re using an online wallet or a hardware wallet, it’s always a good idea to keep it offline. A backup sentence is a random concatenation of 12 to 24 words. Sometimes this is also called a seed phrase.

With this backup set you can always reach your bitcoins. Even if you lose access to hardware wallet. Or, for example, if you lose your login or password for your online wallet.

We also strongly recommend that you write this backup set on a piece of paper. In other ways, you can make it easy for hackers to reach your wallet. For example, you took a photo of your 24 words? Then a malicious person can still get to your bitcoins as soon as they have access to your phone.


The History of Bitcoin’s Price

There has been the volatile trading history of bitcoin since it was first formed in 2009. There has been many action with digital cryptocurrency in its short life. Initially, bitcoin traded for nothing but there was a real price increase in July 2010 when it increased from $0.0008 to $0.08 with a single coin. From that time, bitcoin price history has experience many crashes and rallies. Bitcoin began to take off since 2013. A digital currency started year trading for about $13.50 for every bitcoin. In April 2013, the price rallied to get over $220 concisely before it drop down in mid-April to about $70. This was its first rally and the associated crash of the currency.

Bitcoin started to rally again between October and November in 2013. At that time the currency trading was about $100 in the beginning of October. It was then about $195 when the month of October was coming to an end. By the time the month of November was coming to an end the price had shifted from $200 to more than $1,120. The new rally resulted because of the new bitcoin miners and exchanges when China entering in the marketplace. This was the same period when Mt. Gox exchange was in operational. Mt. Gox was physically involved to about 70% of all transactions of bitcoin.

The price started to become very volatile when it reached at these high. Rumors for lack of security and poor management through Mt. Gox made the market to be nervous. Those people who had problems started to withdraw their money and stop exchange. In the month of December 2013, the price reached high point at $1230. When it was 7th, December, the price fell to about $750, a drop which was 39% within some days. There was the trading stability to some extent to about $920 in the month of January 2014. Nevertheless, there was another key crash in the beginning of February during the time Mt. Gox exchange being filed for the China bankruptcy protection. The price of bitcoin was $911 in February 4 though it shot up by February 16 to $260. This was the 71% decline but the price recovered again in the month of March 2014 trading to about $620.

There was another drop of the price slowly and more gradual with the currency trading to about $600 in 2014, mid-July. It declined down to about $315 when 2015 started. The price stabilized again to a particular level during the summer season in 2015. However, in the beginning of November there was another great spike. Currency shifted from about $275 on 23rd October to a short close for about $460 in November 4 to certain exchange. The currency was sold and traded to about $360 in the end of November the year 2015. There was a steady rise of bitcoin in 2016 and then break through to $1000 in the beginning of 2017.

In 2017 there was a fall in price but started to rise higher and higher and in October that year it broke to around $5000. It doubled again to around $10000 and in December 2017, bitcoin price reached to around $20000. Just for some weeks the price fall again swiftly, crashing down to below $7000 during the month of April 2018. Ii November 2018, it again when below $3500. There was again new resurgence in the price in 2019 and this has made a drastic rise.

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