In recent weeks, we have seen $4 million in investors’ money disappear when a Beijing Bitcoin exchange went offline, and inputs.io saw hackers run off with $1.2 million out of users’ wallets.
This past month has seen Bitcoin repeatedly surpass record highs, and a wide swath of humanity has caught up to the fact that a gold rush is on.
With interest coming in from all quarters, greed and thievery are coming along for the ride. That’s a strong impetus for everyone to take extra precautions.
Even the best security systems and the best cryptography can be broken or otherwise gotten around. The idea is not to be unbreakable but to be too expensive for thieves and hackers to mess with.
Security has always been a prime concern when dealing with money. That’s why banks have big vaults and stone pillars out front. One facet of decentralizing a currency is that the protections banks can are not there for Bitcoin users.
The flipside of bank independence is that the responsibility of tight security falls on the Bitcoin holder.
And at the community level, we all need to be aware of those who would use Bitcoin for fraudulent or just plain shadowy activities. Securing Bitcoins includes securing their value as much as possible, and there are groups out there who will pursue their own interests at the expense of Bitcoin’s credibility.
I’m looking at you, American politics.
The money driving American politics is always controversial, and a system that can obscure a donor’s name or intentions will drive some people wild.
These are not narratives we need spreading during 2014’s midterm election season.
And it’s easy to picture: Just think of any billionaire with an agenda to push. All of a sudden, a groundswell of “grassroots campaigning” and funding from Bitcoin users could put a lot of weight behind said agenda.
As of this writing, Bitcoin seems to be an acceptable form of political donation, provided that the recipient properly record identification details of each donor.
What could be riper for abuse?
But that’s a discussion for another time.
For now, secure yourselves. Paper wallets are a good start. Keeping your stash of Bitcoins offline (as well as any commentary on said stash) will make you less vulnerable to theft.
And perform due diligence thoroughly before you start trading on any exchanges. The more secure, trustworthy exchanges will eventually come out in the wash, but we haven’t reached that stage yet. There are sure to be more inputs.io-type hacks and scammers in Beijing before then.