In short, Bitcoin is a virtual form of currency created in 2009. It has risen to prominence in 2017, with the value of one Bitcoin rising from Aprx. £400 to Aprx. £10,000. This rise in value has been attributed to a number of worldwide organisations recognising it as a bonafide currency.
Today we discuss what Bitcoin is, how it works and why it matters to business.
The true creator of Bitcoin remains a mystery. The pseudonym Satoshi Nakamoto is credited with its creation but the person, or people behind it remain unknown.
Bitcoin was created as a decentralised currency, meaning it has no controlling body (such as the Bank of England for £).
Without a controlling body, Bitcoin is administrated and maintained by the community. The functionality of bitcoin revolves around the ‘Block Chain’. This is the central core of Bitcoin where all the bitcoins are stored. The Block Chain itself is copied and stored on every device involved with Bitcoin.
Bitcoin miners are the administrators of the Block Chain. They constantly check the Block Chain hasn’t been tampered with and transmit news of any bitcoin transactions to all the users of Bitcoin.
In return for this work they are rewarded with newly created Bitcoins.
Security & Crime
While all Bitcoin transactions are available to view, the owners of the Bitcoins involved in the transaction are hidden behind encryption that is almost impossible to hack.
This makes Bitcoin a highly secure service. However, his level of anonymity comes at a price.
Because of its anonymity, Bitcoin has been used to pay for illicit services. It is, also, the payment method of choice for cyber criminals who will look to hack into your system with ransomware.
To know more about how cyber criminals do this, why not take a look at our blog on Ransomware?
Bitcoin is slowly building a customer base. With more people owning Bitcoin and looking for places to spend it can be a useful marketing tool, in certain sectors.
The decentralised nature of the currency also allows for significantly faster international transfers.
However, for Midland based SME’s, generally, the only time you will encounter it is as a payment method for ransomware.
Whether you look to use Bitcoin as a reliable currency for your business or for retrieving your data from cyber criminals, it is key to keep up to date on your cyber security.