Everyone in the Bitcoin world knows how traditional financial solutions are lacking in security features. Especially where credit cards are concerned, there is still a lot of work to be done to even create an illusion of security. German researchers recently exposed a major flaw in the concept of the plastic card payment protocol, allowing hackers to steal any information.
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Payment Protocols Are A Major Financial Problem
Credit cards themselves are not that secure either, but the recent introduction of EMV chips is making it a lot harder for assailants to get any useful information from the user. But by the look of things, the real threat is not the plastic card itself, but rather the protocol used to process those payments.
Based on the recent findings by two German code-breakers, the real threat comes from the payment protocol itself. While most of these security flaws can be fixed with a software update, deep-rooted issues are a different story altogether. Assailants are, on paper, capable of stealing all of the information attached to the card itself.
Addressing security flaws at the protocol level is not as easy as releasing software fix, unfortunately. To put these issues to bed, the entire card payment protocol would have to be overhauled. As a direct result, the use of payment terminals would become impossible all over the world, bringing card transactions to a complete stop on a global scale.
German Code-breaker Karsten Nohl stated:
“The companies responsible for these security vulnerabilities, including the banks – they certainly acknowledged the issue, but they are reluctant to react to it. They’re saying – ‘fraud is not happening yet’, but it’s just a matter of time. So, by not reacting now that it’s known – they’re adding insult to injury.”
In a worst case scenario, the protocol flaws can be used against shops and retailers as well. Assailants could charge their accounts for refunds that never even took place, which would put many companies out of business pretty fast. For the consumer, card information can be cloned, making it easy to empty one’s account as assailants would even have access to the PIN code itself.
Bitcoin Provides Far Better Security
Many consumers all over the world have been complaining about their credit card details being stolen. Now that we know the payment protocol is as insecure as it can be, the question becomes whether or not people wills tart looking for alternative payment methods such as Bitcoin.
Unlike traditional payment protocols, the Bitcoin network is far more secure and protected from financial harm. All transactions have to be signed with a private key, which is solely owned by the end user. At the same time, all of the transaction details are publicly available, yet contain no personal information.