We’ve had our share of Bitcoin thefts, so let’s take a closer look at the security aspects of owning the coin. While it is definitely possible for someone who has Bitcoins to store them in a wallet directly on their hard drive, USB memory stick, or whatever portable storage device they prefer, many of the currentcurrency owners actually choose to keep their coins online in Bitcoin wallets, such as Blockchain.
This practice is loved by people from all around the world mostly due to the fact that it makes dealing with the coin extremely easy, especially when compared to some of the alt coins present out there. Well, one serious issue that more and more people need to be aware of is the danger that stands behind the idea of keeping your coins in an online wallet.
While exchanges and wallets can go bankrupt due to their own mistakes and leave thousands of people from all around the world without their Bitcoins, there is also the possibility of a Bitcoin wallet provider to become corrupt. With this being said, what if a Bitcoin wallet provider simply decides to quit and take all the Bitcoins that a certain user has? As you may already know, Bitcoin transactions are irreversible, so once one has been made, there’s no way to get coins transferred back, unless the person or company on the other end agrees to send it back.
This issue is also serious because of the fact that the cryptocurrency is not currently governed by any laws, so what would really happen in the unfortunate case that a Bitcoin wallet decides to become a thief? Well, taking the funds away won’t really be the issue here, as the Bitcoins are stored on actual hard drives, which belong to the company and are kept in a safe environment. With this in mind, a company can decide to turn their backs on the user at any time and cause lots of trouble.
However, most countries now have laws which govern companies that deal with aspects which don’t have a legal side, such as Bitcoin. With this being said, if a Bitcoin wallet company makes such an unfortunate decision, they will most probably be prosecuted in their country of residence for phishing, causing harm and even taking away what is not rightfully theirs, even if Bitcoin can be classified as non-existent in front of the law.
In more complicated cases where a Bitcoin wallet provider may decide to go abroad with all of the coins, then a lawsuit together with penal chargers will be filled. However, there would currently be no feasible way for the funds to be transferred back to the rightful owner, unless backups would’ve been made and the solution to the problem would be clearer.
Based on everything that has been outlined so far, the concept of a Bitcoin trading company or Bitcoin wallet going corrupt is actually very real, and it is a part of the daily risks that those dealing in bitcoin have to endure. Until general legal standards will be set for the coin, people from all around the world will have to be careful where they keep their Bitcoin, while also making sure that they only pick trusted providers. In the unfortunate case that something like the scenery outlined above manages to happen, then chances are that Bitcoin will have a period of denigration, followed by an effort to set some straight rules, in order to avoid such events from ever happening again.
If you liked this article, follow us on Twitter @btc_feed and make sure to subscribe to our newsletter!
No Responses