Why is Bitcoin more secure than cash?
For many years, Bitcoin was marketed as the preferred currency of criminals. A world devoid of proper authority, riddled with weak points through which hackers could waltz in and take whatever they desired. It is said to be worthless, dangerous, and unregulated. Fast forward to around 2017, when public adoption was increasing, and bitcoin became a “fad,” just another bubble that was unlikely to pan out or provide any real investment potential.
To be honest, none of this was true of bitcoin back then, and it certainly isn’t true of bitcoin now. These classic arguments, advanced by bitcoin’s most vocal detractors, do, however, describe a financial system. Unfortunately, it is the one that supports our governments, pays our bills, and is used by us on a daily basis. Even the most inexperienced bitcoin user will tell you that exchanges like Bitvavo are extremely secure. They are quick and simple to use. They will never cause a global financial crisis and, in fact, can serve as an appealing hedge if fiat fails completely. They are open for business 24 hours a day, seven days a week, and, perhaps most importantly, anyone can use them.
Bitcoin vs. Central Banks
To be honest, bitcoin is probably more secure than traditional financial options because it lacks one commonality. The power of greed is an event that will degrade the goodness of nearly any medium to which it is applied. While bitcoin is certainly used to increase gains and bolster portfolios, its decentralized nature means that the whims of powerful individuals are largely left outside of the digital asset’s regulatory and functional aspects.
When comparing centralized banking structures and digital currencies, it is easy to see the utility and inherent safety of this decentralized structure. Despite a well-documented and largely explicit history of unethical banking practices, and despite a fiat-based on nearly as much physical worth as bitcoin itself, many people continue to place their trust in these legacy institutions. Why? For starters, digital currencies can be perplexing.
Despite the numerous complexities that go into making a single transaction at your local bank, the vast majority of the well-banked world is intimately familiar with it. Even if it is only on a surface level.
Bank transfers are relatively simple depending on which country you want to initiate your bank-to-bank transfer in, and thus where you want your transaction to end.
You select an account to either send or receive money from, and you provide the account number to the other party. The transaction, which includes personal information, identifying information, and monetary exchange, is routed through your bank’s digital network. After placing a hold on the funds that will be withdrawn, your bank turns to its information technology system. If your bank is part of the same network as the bank with which you are transacting, the process is relatively quick, mostly safe, and reasonably priced.
Transactions can become longer, more expensive, and more dangerous if your bank is forced to go outside of its network. exposing users to fraud, scams, and the disclosure of personally identifiable information
Bitcoin is a truly global banking system in which sending money to the most unusual locations is still secure, cheap, and nearly instant. Otherwise, the transaction processes between banks and bitcoin are similar. Instead of your name, address, bank account number, and sorting code, you send a public key, which is made up of a series of numbers and letters and is linked to your wallet address.
This key can never be used to withdraw funds from your wallet; it can only be used to locate it. Bitcoin users must privately “sign” a bitcoin transaction with their private key in order to send or receive funds. A piece of information you don’t share with anyone.
These public and private keys are some of the factors that contribute to the security of bitcoin. It is simply not necessary to share personally-identifying information such as your address or social security number when transacting with digital currencies. As a result, the chances of this information becoming public are extremely low.
Unlike the centralized banking system, many people have been victims of identity fraud as a result of outdated banking methods.
Bitcoin is also immune to inflation because its value is derived from an economic idea known as “artificial scarcity.” This means that there is only a finite amount of bitcoin, and only that amount will ever exist. There will never be any more. As a result, crypto relies on supply and demand models to maintain its value. Fiat, on the other hand, can be printed whenever a government considers it necessary, which might pose major issues for customers.
Because Bitcoin is visible, it is also secure. Centralized banks acquire debt, create debt, and effectively profit off your money—in ways you’re unlikely to ever see because banks rarely release their books to the public. Bitcoin is based on blockchain, a distributed ledger technology. The blockchain is a public ledger that keeps track of every transaction ever made on the bitcoin network. These transactions can be viewed, but they can’t be duplicated or changed once they’ve been posted to the blockchain.
Creating a transparent ecosystem that is self-sustaining. Miners (computers that verify and add transactions) are paid in newly minted bitcoin and transaction fees, but no more money can be created, thus there is no financial incentive to participate in dangerous monetary behavior — and it isn’t even feasible.