Financial Security

We all know that identity theft is a very large, and real concern. Here are some frightening statistics I found:

*”Approximately 15 million United States residents have their identities used fraudulently each year with financial losses totalling upwards of $50 billion.”

*”7% of all adults have their identities misused with each instance resulting in approximately $3,500 in losses”

Source

How do identity thieves get this information? Well, much of it comes from the hacking of financial and government data. Why is this sensitive information so easily hacked? Well, this has to do with encryption of the data. Sensitive data is “protected” through SSL, or Secure Sockets Locker. Depending on the level of encryption, the “security” can be hacked. Really, it’s up to the company running the website to determine how much encryption to use, how well it’s implemented, or the company sources out the security protocol work to a third party.

What does this mean for you? It means that whenever you put your financial data out there, or use a financial institution that has your data in a central server, you have absolutely no idea how secure your information is. You have to trust that all these companies have the highest level encryption. When you think about it, there’s LOTS of companies that you interact with on a regular basis regarding your personal data. The fact of the matter is, many companies use lower level encryption, making it easy for your data to be stolen. For the highest levels of data encryption, even the world’s fastest super computers can’t crack the code. A quantum computer might, but every day hackers (or, called “crackers,” hackers that hack for nefarious purposes such as to steal data for personal gain) do not have access to a quantum computer, and they aren’t exactly being used yet in any real sense.

So what can you do to take control over your personal and extremely sensitive financial security? You can use bitcoin! There are ways to make sure that your bitcoins are absolutely secure from hack attacks. You have control over how your money is handled, and you aren’t leaving it up to other companies to hope they are using good data encryption protocols. Blockchain.info encrypts the data within your browser. Meaning, your data is not stored on their servers. So if Blockchain’s servers are attacked, your information isn’t in danger. However, it’s still not a good idea to keep all of your bitcoins in an online wallet such as Blockchain. The best idea is a paper wallet. This is where everything is printed on paper, and you have to secure the paper somehow. Blockchain has instructions as to how you can do this.

One thing that does need to be said about bitcoin security is that you never want to keep any money in a bitcoin exchange for very long. With bitcoin exchanges, the data for your money is stored on their servers, and is susceptible to hack attacks, and many of the exchanges HAVE been attacked. An exchange is a service you use to change your USD into bitcoins (BTC), such as Mt.Gox or other exchanges. As soon as you have your bitcoins from cash on the exchange, you’ll want to move them to a more secure bitcoin wallet where you are controlling your security.

I hope this has been useful to helping maintain your financial security, because it is something that is very important in our daily lives. As always, if you have any questions, be sure to ask!