- Published: Thursday, 06 March 2014 10:04
- Written by Editor
One of the most alarming facts to emerge during the recent spate of Bitcoin losses from exchanges and web based wallets is that many of those affected are serious Bitcoin users and enthusiasts who were familiar with the way Bitcoin works. Most of these people were more than capable of protecting their investment in Bitcoin assets but failed to to so.
It is clear that before Bitcoin can break from the sphere of enthusiasts, users will need educating on security and use.
In the early days of the Internet, one of the biggest barriers to mainstream use was the high level of technical expertise required to even connect. There was no broadband, only very slow modems that plugged in to the phone line and required configuring properly. Windows had no built in Internet connection ability, so custom built software was required that was difficulty to configure. There was a whole host of other factors that required at least some technical expertise in order to connect. It was only when Windows became fully Internet ready and modems were replaced by high speed broadband, and connecting was no more difficult than loading a web browser that the Internet really took off and became what it is today.
Bitcoin is in a similar position today as the earliest days of the Internet. The ramificastions for lack of knowledge and technical expertise however are much greater. In the case of the Internet, lack of technical ability simply meant not being able to connect. In the case of Bitcoin, lack of technical ability might mean not being able to configure a wallet or send and receive Bitcoin at best, at worse, and a highly likely scenario, is users losing Bitcoin through negligence, e.g. failure to backup, accidental deletion, computer crashes etc or thought theft by hacking, e.g. due to computer trojans or insecure passwords.
The mainstream media is all over any Bitcoin incident that can be used against Bitcoin even now, so if thousands of people are losing all their Bitcoin the mainstream media will make it big news and scare people away for fear of losing money. So clearly this needs to be addressed today before Bitcoin can achieve its full potential and promise.
The further issue to be considered that the vast majority of computer and Internet users are not in any way technical. They can switch on a computer, load a browser to surf the Internet, perhaps use a variety of software, but for anything technical they have to reply on help from an expert.
While sending and receiving Bitcoin is within the ability of most people, configuring and backing up wallets and private keys are most certainly not. And many other aspects of Bitcoin management are beyond the scope of most users at this time. Computers will always fail sooner or later, often due to hard disk failure being a mechanical device, yet countless millions of people never, ever backup their computer or data and come to regret it when they lose all their valuable photographs, documents, financial data etc. And even then they rarely learn the lesson and take time to learn how to backup their valuable data again.
So in the context of Bitcoin this is a major issue, especially as hackers creating trojans, targeting exchanges and web based wallets etc are highly motivated due to the rewards of stolen Bitcoin.
Bitcoin today then is very far from ready from ready for the mainstream, with creating cold storage and managing private keys far beyond most users.
Bitcoin will need to become much more plug and play using dedicated devices that plug in to the computer USB port, portable, smartphone oriented and with built in security and backup capabilities.
Even so, Bitcoin is a brave new world of money, one with truly massive potential with profound benefits for humanity as an alternative to the totally corrupt, broken and elitist global monetary system that is now collapsing, but to fulfil that potential there will need to be a whole new industry in Bitcoin education and plug and play ease of use for most.
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