CryptocurrencyBitcoin risks: What you should know about the digital currency
If you own Bitcoin or want to invest in the mercurial digital currency, which soared to more than $19,000 before plunging in value, watch out, says an expert. Security and privacy issues, not to mention the possibility of a Bitcoin market crash, should give you pause for concern, according to Rutgers’s Janne Lindqvist. Bitcoin, a digital currency introduced in 2009, features a peer-to-peer network with a public online ledger for tracking transactions. Bitcoin prices have soared in recent months, and people can buy and sell Bitcoins with some anonymity.
If you own Bitcoin or want to invest in the mercurial digital currency, which soared to more than $19,000 before plunging in value, watch out, a Rutgers University–New Brunswick professor says.
Security and privacy issues, not to mention the possibility of a Bitcoin market crash, should give you pause for concern, according to Janne Lindqvist, an assistant professor in the Department of Electrical and Computer Engineering in the School of Engineering.
Bitcoin, a digital currency introduced in 2009, features a peer-to-peer network with a public online ledger for tracking transactions. Bitcoin prices have soared in recent months, and people can buy and sell Bitcoins with some anonymity.
Rutgers Today talked with Lindqvist’s on a variety of Bitcoin issues. In 2016, he co-authored the first peer-reviewed study on user and non-user attitudes about Bitcoin.
Rutgers Today: Does the general public understand how Bitcoin works?
Janne Lindqvist: Based on our study, people don’t seem to understand how it works, and that’s a big problem if you want to invest in it. You can sign up for Bitcoin with a credit card without really understanding it. However, it is not like people generally understand how credit cards work either, so owning and doing transactions is not an issue in itself. The Bitcoin public ledger, known as a blockchain, records all transactions. When someone wants to transfer Bitcoins, they send a message signaling a transaction to the Bitcoin network. The transaction involves the amount of Bitcoins to send, the public address of someone who will receive Bitcoins and a private key used to sign and verify the transaction. The address is a public key owned by the recipient, so users keep the keys to redeem Bitcoins at those addresses in what’s called a wallet. The computers that assemble the transactions in so-called blocks are called miners. They receive Bitcoin rewards as an incentive to verify and post transactions.
Rutgers Today: Why is Bitcoin so hot right now?
Lindqvist: I’m sure that
