This post is a warning for all bitcoin newbies to put extra care in protecting their bitcoin wallets because it may be vulnerable.
With a recently growing adoption in the bitcoin currency, many are wondering where the weak points are in this new age currency. I have talked to many friends about this volatile and speculative currency, and the opinions of bitcoins is all over the map. This is to be expected of course, as bitcoins is still in it’s early adopters phase. Bitcoin popularity is growing mainstream quickly due to media attention. More exposure and closure of notorious website silk road also is adding to it’s popularity. If you do not know what bitcoins are, this is a quick wiki definition of it:
“Bitcoin are a peer-to-peer payment system and digital currency introduced as open source software in 2009 by pseudonymous developer Satoshi Nakamoto. Bitcoin was the first cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money.”
Bitcoin is a bearer instrument of value and if a payment gets sent to the wrong party, or a thief gains control of a wallet, the funds can be spent and there is no way of getting it back. “A simple concentration lapse can see exponentially more bit coin leave your wallet than you’d intended, never to be seen again.”
Why is that you say? Well, with bitcoins, the amount at stake can be substantial… even millions are easily transferred instantly. With this said, make sure you keep your wallet files in a safe place and do your research.
“Not all wallet software is designed to support paper wallets. People who don’t understand this have managed to delete money before.”
Reddit has a thread on “The dumbest mistake you’ve made with bitcoin”, full of stories about people who mined hundreds or more BTC in the early days only to trash the file or blow it all. Interesting read.