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Tech Bytes: Cryptocurrency security still a concern 

Bitcoin, and cryptocurrency as a whole, is celebrating its 15th anniversary in 2024. 

Despite its well-documented history, many people still don’t understand it. Cryptocurrency, according to Merriam-Webster’s official definition, is “any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions.” 

Forbes notes an extensive list of advantages: inflation protection, transactional speed, cost-effective transitions, decentralization, diversity, accessibility, safe, transparent, private and effortless. 

To this day, though, few businesses accept cryptocurrency as a form of payment. 

John Joyce, co-owner of CRS Technology Consultants, discussed cryptocurrency during a Tech Bytes segment on ABC7. 

“It’s a thing that we’ve all heard about, but precious few really seem to understand it,” John says. 

History of Bitcoin 

The origins of Bitcoin are traced to a paper written by “Satoshi Nakamoto.” 

“To this day, no one knows if that was a real person,” John says. “Obviously, a person was behind it, but was it a group? Was it a him? Was it a her? No one actually knows. That story remains legend in technology circles these days.” 

When Bitcoin was introduced in 2009, its price was zero. By year’s end, it was 3 cents. In 2021, it reached an eye-popping peak of $63,558. Cryptocurrency has made a lot of investors wealthy, but it’s also made a lot of them broke. 

“Bitcoin remains, no pun intended, the gold standard, even though it is just as – if not more – volatile than the other ones,” John says. “But it carries so much individual value and it’s been around the longest.” 

Cryptocurrency in Business 

The U.S. Chamber of Commerce recently noted that cryptocurrency is still struggling to become mainstream, even after 15 years. 

While more people are familiar with the concept of cryptocurrency, only a small number of customers feel confident using Bitcoin and its counterparts for daily expenses.” 

NerdWallet, which has covered cryptocurrency since its inception, noted that 2,352 U.S. businesses accepted Bitcoin as payment as of late 2022. Given that the U.S. Small Business Administration reports there are 6.1 million businesses nationwide, not counting independent contractors, 2,352 is a drop in the bucket. 

NerdWallet offered three pros and three cons of accepting Bitcoin at businesses: 

Pros 

  • There are no chargebacks or PCI compliance issues of concern. 
  • Companies could attract business from crypto enthusiasts. 
  • Holding onto Bitcoin might make payments received more valuable over time. 

Cons 

  • It can be burdensome to keep up with rapid changes in cryptocurrency technology and regulation. 
  • Holding onto Bitcoin exposes businesses to high price volatility, potentially amounting to a loss. 
  • Complexities like how to prepare taxes and manage customer returns require extra effort. 

The Legitimacy of Cryptocurrency 

CoinMarketCap tracks thousands of cryptocurrencies. Bitcoin has the highest market cap. John notes that “you can go out and buy real things today with it,” yet the public remains skeptical. 

“It’s legitimate in that it exists. It’s legitimate in that we can use it,” John says. “How it differs is that it’s built on what’s called the blockchain. It’s all decentralized. There is no one central bank; there is no one central government behind it.” 

Currency has evolved over the centuries. Food and goods, for example, were essentially used as money hundreds of years ago. 

“At one point, the dollar bills that we carry around were representative of gold sitting in a vault somewhere,” John says. “If you think about it, that would have seemed like a novel concept 100 years ago.” 

The Security of Cryptocurrency 

Crypto enthusiasts say Bitcoin and other cryptocurrencies are safer alternatives to cash and credit cards. At the same time, though, skeptics note that cybercriminals are continuously trying to crack the code. It’s also worth noting that forgetting a username or password could be devastating. 

“If we misplace a $100 bill, we’re going to be pretty upset about it, but chances are, you’re not carrying around every dollar you have to your name,” John says. “If you lose your wallet, it’s a bad day, but hopefully not life altering. If you lose access to your Bitcoin wallet, they’re gone forever. It’s decentralized, so there is no 1(800) number to call and say ‘I lost my Bitcoin.’ It’s gone.” 

Tech companies involved in crypto exchanges are just like any other business. Some are successful; some are not. 

“Brands come and go in technology all the time; that’s part of being in the market,” John says. “We don’t think about brands coming and going as we think about our money.” 

Consumers want to know their money is safe and secure. That’s potentially causing the most hesitation with crypto. 

“If someone gets into your bank account and empties it, you can at least call the fraud department to get your money back,” John says. “If someone compromises your Bitcoin wallet and transfers them out, they’re gone for good.” 

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