You know, if there is positivity, there is negativity too. It is also in the case of the bitcoin network. Bitcoin is a very secure and safe platform for payment because of its decentralized nature. Since there is no third-party involvement, many bitcoin exchanges came into existence and got hacked.
Here people will be confused. If bitcoin is a very secure network or challenging to hack, why is there hacking fear? This article will help you understand the main thing that is not accepted by the bitcoin platform but people are using.
Bitcoin platform is the most secure platform and impossible to hack that can be accessed through the software installed on your computer or laptop, or mobile devices. It is a decentralized system that means no involvement of third parties like government, banks and other financial institutions, and other companies.
The limitation of the bitcoin platform is that it shows all the transactions publically.
In simple words, all the transactions are stored in a blockchain platform, and blockchain broadcasted all the visible transactions to anyone. Suppose your bitcoin wallet address is A, and you have sent one bitcoin to the address of B. In that case, anyone on the blockchain can check to see your wallet address and wallet address of receive, i.e., wallet address B, and can also see the transaction amount that is one bitcoin.
Bitcoin exchanges come into existence because people face many problems regarding the privacy of the bitcoin wallet address. People do not want to show their transactions or wallet addresses to other people on the blockchain and want private transactions.
Bitcoin exchanges came into existence by taking care of these problems. Bitcoin exchanges provide security to bitcoin uses at a certain level. Bitcoin exchange maybe a website or an android or IOS applications.
You have to create an account on the bitcoin exchange to use their services, and the exchange will charge some percent of commission on each transaction. Bitcoin exchange is viral today, but it works as a third party, and bitcoin does not support a third party. If you have lost your bitcoin in exchange, you cannot contact bitcoin, and bitcoin will not help you get your bitcoin back.
The real fear with exchange
People were confused if bitcoin is impossible to hack, so why do we always hear hacking news? And there were many hacking cases. Yes, there was hacking, but not on the bitcoin platform but the bitcoin exchange.
Bitcoin network is decentralized in itself, and there is no third-party involvement. Still, due to the privacy limitation of bitcoin, people are going with bitcoin exchanges that are not a part of a bitcoin platform, and it is a third party.
Bitcoin is more secure because there is no central point of failure, but bitcoin is a powerful platform.
Bitcoin exchanges are not decentralized, and the data of all the customers that are the user of that exchanges are store in a single place that means data is stored in a central location. We know to target the main point is too easy for hackers. There may be a security issue in some exchanges. They provide security at a certain level, but your bitcoin is not properly secure.
In the past years, many exchanges got hacked, and many people lose their bitcoin and money and never got back.
For example, many people are using that bitcoin exchange if you are using a popular bitcoin exchange. IF there are many users, all the data, information, wallets, and bitcoins are stored in one or central server of the exchange. Suppose the exchanges with million users got hacked, what will the next? The exchange will run away, and you will never get back your bitcoins.
You cannot contact bitcoin support teams because you had chosen them. So it’s your responsibility. The bitcoin network or platform is very secure but not exchanges.
From the above idea you can use platform like this software, you have learned that the fear of bitcoin hacking services.
Bitcoin is a very safe and secure platform because of its decentralization nature. Still, exchanges that provide bitcoin services are not a part of bitcoin, and they provide some level of security. Once you lost your bitcoin on an exchange, you will never get it back, and it is your responsibility.