It seems like “bank grade security” doesn’t really live up to its name. It was recently reported that the FBI offered a $3M reward for the suspected masterminds behind the GameOver Zeus botnet; a botnet that stole over $100M by acquiring the banking credentials of it’s victims. Another report recently revealed that up to $1 billion were stolen from 100 banks in 2013.
Is an all-out cyber war on banks incoming?
We saw Ben Lawsky pointing out how dangerous cyber criminals can be for banks in a speech he gave at Columbia Law School.
“We are concerned that within the next decade, or perhaps sooner, we will experience an Armageddontype cyber event that causes a significant disruption in the financial system for a period of time,”
The conservative banking system has a lot to catch up with, same for bitcoin.
Bitcoin can undoubtedly be one of the most secure ways to transfer money. With the world’s strongest computing network confirming each and every transaction, double spending is close to impossible. There’s proof that each and every transaction happened, and this proof will be accessible by everyone and forever through the blockchain. Bitcoin achieves anonymity through transparency in a way that today’s banking system can only dream about.
It’s true that banks will cover the losses of their customers, but this coverage comes through the use of fractional reserve banking. This by no means achieves the level of security that can be reached when storing wealth with bitcoin. Split-key addresses, cold storage and strong encryption are just some perks of the security people that choose to be their own bank by using bitcoin get a chance to use.
With that said, bitcoin is still not the perfect way to transfer money. While it can be uncrackable, unexploitable and incredibly secure it lacks simplicity. Bitcoin has a long way to come until the average user can achieve a high level of security with ease. Security with bitcoin comes much further than just downloading an application. At the same time however, opening a bank account and achieving “bank grade security” can be just a 15-minute procedure that doesn’t require any kind of special knowledge.