Thanks to the latest Bitcoin rally, Bitcoin has become a top investment and is also widely used as a payment method. As there is high demand for BTC, a lot of advantages regarding Bitcoin are being brought to the spotlight, including the safety of BTC payments. If you want to learn what makes Bitcoin a safe alternative option, keep reading. We cover all of the important aspects of Bitcoin that make it a safe asset.
Proof of Work
One of the main issues cryptocurrencies face is the double spending problem which is only associated with virtual currencies. However, the creator of Bitcoin Nakamoto solved this problem successfully with an algorithm in the blockchain network.
The miners are the users on the platform who approve the blocks of transactions and work as auditors in this mining process. More specifically, when the miners find BTC transactions, they need to verify each transaction and add them to the block.
The verification of the block of transactions encompasses solving a complex numeric puzzle which actually proves that it is a legitimate block of transactions. This is what makes the processing of Bitcoin transactions energy-consuming and a competitive process for the miners.
It should be noted that only the miner who first solves the complex computational puzzle gets the block reward which is the incentive and the main compensation for mining. Proof of work is also known as the consensus algorithm, and it is duplicated by other altcoins that were created after Bitcoin. So, it’s safe to say that each BTC transaction is completely secure, and this also applies to the entire blockchain network.
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Another characteristic of the blockchain network that increases its level of security is the transparency regarding the information about the BTC transactions and other relevant information about the network.
Actually, apart from the data about the identity of the users on the network, everything is completely viewable to every user.
For example, when a new block of transactions is added to the network that is broadcasted publicly to the users and they are notified about this event. Also, it is always known what the exact amount of mined BTC is. So, if anyone sees any kind of error or misleading information, it can be quickly mended by the miners because, as we said, everything that is important is completely available to the users.
Design of the Blockchain Network
By design of the blockchain network, it is impossible for one entity or even a minor to get control of the entire blockchain system and use it for its own advantage. This is a peer-to-peer-based distributed database, which means that each of the nodes on the network act as servers, and there isn’t the central point or authority where the BTC transactions are validated.
In addition, as the number of miners increases on the network, so does the level of security. And as there are more nodes, it’s more difficult for the system to be hacked or tampered with. Also, it’s worth noting that is because the BTC transactions are irreversible once something is recorded on the network, it cannot be changed, and it is available for everyone to see.
Bitcoin has proven over time to be a secure alternative to traditional currencies, and a lot of businesses, including companies like Namecheap, Etsy, Microsoft, PayPal, are supporting Bitcoin by accepting BTC payments.
Another proof of the impeccable design of the blockchain network and its security is that blockchain technology is also implemented by other sectors that are not related to cryptocurrencies. For example, blockchain technology is being used to improve the efficiency of supply chain management systems. It is also used in the public sector to increase transparency and minimize errors.