Is Bitcoin Safe?

(source: pcmag.com)

With extensive experience as an electrical/software/coding engineer along with having a diverse financial background, Thomas Wettermann’s areas of interest include Machine Learning (ML), artificial intelligence (AI), and Financial Technology (FinTech). For the past few years, Thomas Wettermann has focused on the underlying technologies that support and promote all phases of cryptocurrency ecosystems.

Bitcoin is Safe

Because it resides on the blockchain, Bitcoin is generally considered as being a safe and secure technology. There are several reasons why Bitcoin technology is considered safe.

First, Bitcoin uses secure cryptography to back its blockchain. When looking at other financial or banking institutions, the blockchain is an improved technology that relies on secure core concepts and cryptography. It, therefore, does not need to rely on trusting a third party, like a bank or governmental entity. Bitcoin’s blockchain utilizes a complex computerized network to validate every single transaction on its network. These transactions are irreversible and immutable.

Second, Bitcoin is public as the blockchain ledger is transparent with all transactions being readily available to anyone even if the people involved are anonymous. Bitcoin’s blockchain creates a system that makes cheating or scamming extremely difficult, indeed practically impossible.

Third, Bitcoin’s network is decentralized and distributed over hundreds of thousand computer systems scattered all over the world, working in unison to enhance the Bitcoin blockchain. This networked system ensures that if something happens to one of the servers or nodes in the network, other servers and nodes operating in the system will not be affected and the blockchain will maintain its decentralized independence.

Fourth, Bitcoin utilizes a permissionless blockchain. That is, permissions are not required for Bitcoin transactions to be initiated and then secured onto the blockchain. With no authorizing or regulatory body, Bitcoin is open and fair to anyone transacting on the blockchain.

Conclusion

Bitcoin was the first cryptocurrency and is now one of the most popular. It relies on a network of thousands of peer-to-peer networked computers. This avoids reliance on any type of third-party to verify and trust its transactions. All Bitcoin transactions reside on the blockchain and are therefore immutable, secure, transparent, and traceable. An anti-inflationary hedge, Bitcoin has been one of the best financial assets to own over the past several years. It also acts as a medium of exchange, allowing trustless transactions to occur all over the world, at any time of day.

All the views expressed on this site are those of Thomas Wettermann and do not represent the opinions of any entity with which Thomas Wettermann has been, is currently, or will be affiliated. Trading digital financial assets such as cryptocurrencies can carry a high level of risk, and may not be suitable for all investors.

Before deciding to invest, purchase, and/or trade cryptocurrency you should carefully consider your investment objectives, level of experience, adversity to risk, and volatilities. The possibility exists that you may sustain a loss of some or all of your initial investment; therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with cryptocurrency trading, and seek advice from a qualified and independent financial advisor.

Thomas Wettermann is not an independent financial advisor. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as a general market commentary of Thomas Wettermann and does not constitute investment advice. Thomas Wettermann will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. All opinions expressed on this site are owned by Thomas Wettermann and should never be considered as advice in any form.