As cryptocurrency and the blockchain industry becomes more widely adopted, many people are wondering ‘is bitcoin safe?’ or ‘how safe is cryptocurrency?’. This article has answers to those questions.
Is cryptocurrency safe?
As there are so many different ones, it depends. In order to find out whether a particular cryptocurrency is safe or not, you should first understand its features.
There are many kinds of cryptocurrencies in the world, but we will take Bitcoin as an example, as it was the first coin and is arguably the most important currency in the field.
So let’s learn about the characteristics of Bitcoin.
As designed by Satoshi Nakamoto (Bitcoin’s creator), all Bitcoin transactions are publicly stored on the network’s ledger. That means that anyone can view all the information regarding a particular transaction, including the addresses of the sender and recipient and how much Bitcoin was transferred.
This is what we call the transparency of Bitcoin.
Thanks to this feature, bitcoin is considered the currency of the new era, allowing transfers to be borderless, fast and low cost. However, as you may imagine, transparency also has its downsides, making users keep asking ‘Is bitcoin safe?’
Bitcoin’s public ledger shows all the links between every address on the blockchain. This means that anyone can track a single transaction and trace it back to its source. Basically, there’s nowhere to hide on the Bitcoin blockchain.
The traceability of Bitcoin does have some benefits, though. For example, it makes money laundering very difficult because all coins are traceable and all the links between addresses are public.
However, traceability does mean risk for normal people. If you are targeted by a bad guy, they can easily trace your transactions and figure out your real identity. This is why we continue to ask “Is bitcoin safe?”.
Let’s find out in the next section.
How safe is Bitcoin?
In order to assess the safety of Bitcoin, we have to consider many different aspects, including how to use, invest and trade it.
Is Bitcoin safe to use?
The answer is “for sure”.
Bitcoin is safe to use and has arguably been the most secure cryptocurrency in the field for over 10 years.
The Bitcoin blockchain uses a Proof-of-Work (POW) consensus algorithm, making it a distributed network that has no center. This makes it very difficult to attack or manipulate. As a result, using Bitcoin is totally safe.
Is Bitcoin safe for investing?
This is one of the most difficult questions to answer.
For the risk-averse among us, Bitcoin’s volatility (its ability to fluctuate quite wildly in just a few minutes) does not make it a safe long-term investment. You could apply this logic to many cryptocurrencies, though, and it’s understandable as people don’t want their assets to drop thousands of dollars in the blink of an eye.
However, for those with a high degree of risk tolerance or a belief in the ‘high-risk high return’ mantra, Bitcoin is an attractive investment option. The statistics don’t lie – many people have made a lot of money from Bitcoin and it’s certainly one of the most profitable assets of the last decade. To illustrate, $1 of bitcoin purchased in March 2010 is worth $2.367 million today.
So, is bitcoin a safe investment? As we’ve seen, that depends on your perspective.
Is Bitcoin safe to trade?
This is easier to answer – no, not really.
It’s not safe enough for you to trade, send or receive Bitcoin without any additional safeguards in place. As previously explained, the traceability between every address isn’t ideal for your privacy. Anyone can track your activity on the
Bitcoin blockchain and you really don’t want people to know how much Bitcoin you have, where you send your coins or the origin of your assets.
If you don’t mind publicizing your identity and forgoing your privacy, then you might consider Bitcoin safe to trade. In any case, it’s easy to send and receive bitcoin across borderless and for a relatively low cost.
On the other hand, if privacy is your top concern, you better find some ways to obscure your transactions.
How to trade Bitcoin confidentially
If you still cannot find a clear answer for “Is bitcoin safe’, you can answer this question by looking for other solutions guaranteeing your safety. There are many ways to send and buy crypto anonymously. Some are free while others aren’t, but you’ll find the best fit for you in this list below.
An Anonymous Bitcoin Wallet App
Obscuring crypto transactions is the main purpose of anonymous bitcoin wallet apps. With one, you can send and receive cryptocurrencies without anyone ever being able to see any details of the sender, receiver or how much was involved.
The Incognito Wallet is the one that you should consider. You don’t need to ask yourself ‘is bitcoin safe?’ anymore. This wallet turns all your favorite coins, including BTC, into a privacy version at a rate of 1:1. One-click turns your Bitcoin (BTC) into privacy Bitcoin (pBTC) that hides all the information we mentioned previously, and another click switches it back to its original public format.
The Incognito Wallet is both user-friendly and technologically innovative. You can store your assets, send and receive your coins without worrying about anyone tracing them back and finding out your identity. As a result, it protects your funds from prying eyes that might otherwise target your account.
Anonymous Cryptocurrency Exchanges without KYC Verification
In many countries around the world, such as the US, Canada, the UK, New Zealand, and Australia, KYC (a.k.a Know Your Customer) laws and regulations aim to prevent criminals from using banks or other financial institutions for money laundering.
As cryptocurrency has become an established financial market, the KYC policy also now applies to many crypto exchanges. This means users must submit information to verify their real identity, providing their location and financial evidence in order to withdraw money from these exchanges.
It may not harm your funds, but it’s not ideal for your privacy. Many people don’t want to volunteer this information and have it stored by an exchange, as they’re worried about the information either being leaked or hacked.
As a result, many users seek anonymous cryptocurrency exchanges that do not require KYC verification. It is the answer for “Is bitcoin safe’ question. On these exchanges, you can create an account with just an email address and no further information that will reveal your identity, so users can trade bitcoin confidentially.
If this sounds like your sort of thing, ShapeShift and Changelly are good options to try.
Bitcoin ATMs in your area
Bitcoin ATMs are physical machines that accept your fiat currency and in exchange send you Bitcoin directly to your chosen wallet address (or you can generate a new paper address of course).
There are also 2-Way Bitcoin ATMs that accept your Bitcoin in exchange for cash. So generally, you can buy and sell Bitcoin through these machines without the need for a crypto exchange account.
Unfortunately, many Bitcoin ATMs nowadays require KYC information but you can still find anonymous ones that allow purchases without the need for it. Bitcoin ATM is another answer for your perplexing question is bitcoin safe.
If you don’t know where your closest Bitcoin ATM is, take a look at the map on https://coinatmradar.com/ and find out.
Final thoughts on “Is Bitcoin safe?”
How safe Bitcoin is depends on the purpose you’re using it for. If you just use Bitcoin as a form of payment in your everyday life, it’s safe enough. If you want to invest in Bitcoin (and other crypto-assets), you really should analyze the profit versus the risk. Don’t make any investments before doing your own research.
Finally, if you want to trade Bitcoin privately, you should find a way to send coins anonymously and it’s worth giving the Incognito Wallet a try. It will surprise you with its great features and functions. If you were wondering “is Bitcoin safe”, hope you’ve known the answer now.