Bitcoins are becoming increasingly popular among Internet users. Despite the interest in the virtual currency, there are a number of security problems that need to be addressed. Several companies are creating new solutions to enhance security for storing and processing bitcoins. Here are a few changes that are currently underway.
Coinbase Improves Own Security
Coinbase is one of the most popular bitcoin storage providers. The company has received over $25 million in capital from an angel investor and wants to make sure that customers are satisfied with its services. The company recently decided that it needs to improve security to appease its existing customer base and draw more customers in the near future. Coinbase has recently proposed a couple of new changes:
- Coinbase will use two-factor authentication for transactions over 100 USD.
- The company will add extra layers of security for customers making any changes to their accounts.
Coinbase founder Brian Armstrong and other company leaders are optimistic that these changes will provide much higher security. The company has already taken more extensive security precautions than most of its competitors. Only 3% of user bitcoins are stored online, which makes it difficult for hackers to steal them if the servers were ever compromised. The new measures should improve storage further and give customers greater peace of mind.
Insured Bitcoin Servers
Most companies acknowledge that bitcoin servers can take more steps to enhance security. However, even the most protected system is vulnerable to sophisticated hackers. A group of hackers helped the bitcoin community understand the risks these hackers pose when compromising servers.
Elliptic is another popular bitcoin wallet service. The company recently announced that it will be insuring the bitcoins on its servers. This will ease any anxieties customers have about storing bitcoins with Elliptic.
Elliptic is also taking a number of other measures to improve security. They have created the Elliptic Vault, which keeps most bitcoins offline. Both Coinbase and Elliptic seem to feel that storing bitcoins offline is the best way to protect them from hackers. Elliptic co-founder Tom Robinson said that the deep cold storage strategy isn’t 100% effective, but it significantly reduces the risk that bitcoins will be stolen by hackers.
Need for Security Will Rise as More People Turn to Bitcoins
Bitcoins have become both a very popular alternate currency and an investment opportunity. The value of bitcoins is currently 840 USD. Many people who purchased bitcoins when they were worth a dollar or less have become millionaires. These people are apprehensive that their newfound wealth could be lost if a hacker ever gained access to their virtual wallet.
The need for bitcoin security will probably increase in the near future, especially if the price of bitcoins continues to rise. Many other bitcoin wallet providers are expected to start implementing greater cyber security solutions to deter hackers. Coinbase has said that it is already working on a couple of new projects to offer more security, but hasn’t revealed any of the details on these new projects yet.
About the author: Kalen Smith is a former engineer who writes about trends in the technology industry. He is also an avid investor and is considering investing in bitcoins.