Bitcoin security an issue

Bitcoin Trading Alert

We still support long speculative positions in the market, stop-loss at $550. 

We read an interesting piece on Business Insider which brought up the ideas of Fred Wilson, founder of Union Square Ventures and a Bitcoin investor. Wilson earlier spoke for the NYC Foundation for Computer Science Education and expressed his views on Bitcoin:

(…) I got a lot of emails from people, particularly in the last few days, who said, I don't have any Bitcoin, I would have to buy the Bitcoin, it's going to take me three days for the Bitcoin to show up in my account. So I'm not going to be able to get the Bitcoin in time to make it to the event [the event could only be paid for with Bitcoin]. If you had Bitcoin in your account it was simple, you just gave 1/20th of a Bitcoin and you come. So, not enough people have it.

(…)

One of the real issues with Bitcoin right now is that it's not that secure, and the reason it's not that secure is, it's easy to hack into people's computers, if they have a wallet on their own computer, it's easy to get in there and steal the Bitcoin. Bitcoin theft is a big issue. Bitcoin fraud is a big issue. And what will have to happen is we will need to see companies like Coinbase and others merge that can invest heavily in security. And that's both technological security, and also process security — to make you comfortable to keep your Bitcoin there. And I think that that's probably going to be first big commercial opportunity in Bitcoin, is to create secure systems. Because without that, I don't think we'll ever get enough confidence and trust in the system for people to really start using it.

We tend to agree with these points. Bitcoin is still not widely used, not matter from which angle you approach this problem. It also has gone through turbulent events stemming from lack of transparency and security. We have numerously expressed the view that the main driver for Bitcoin’s growth will be the number of people accepting the currency. Wilson correctly states that it will be impossible for the currency to really take off unless security solutions are worked out.

That’s not to say that Bitcoin is dangerous by itself. It merely experiences its own childhood diseases, one of which are problems with security compared with traditional payment methods. The fact that such impediments exist is a challenge but also an enormous opportunity. If Bitcoin’s shortcomings are overcome in the future, the currency might spread across the world as a competitive payment system.

For now, let’s focus on the charts.

Page 1 of 3 >>
Comments
comments powered by Disqus