Security Issues of Bitcoin - Essay Example

Bitcoin - Security Issues – IT professional and society . Table of Contents Security problems associated with Bitcoin 3 Ethical issues related to theproblems 4 Implication of ethical theory 4 Role and responsibilities of IT professionals 5 References 7 Security problems associated with Bitcoin According to Schouwenberg, a senior security researcher of Kaspersky Labs, Criminals pose threat to Bitcoins because it is almost impossible to trace them after stealing Bitcoin, so it is easy to spend it after stealing. Every Bitcoin contains an address with an encrypted key. This is done in order to secure payments for Bitcoin owners. Despite the implementation of several security measures the risk of theft is high. Modern hackers can commit cybercrime by using malware. For an example Bitcoins are more like e-cash. In order to secure Bitcoins a secret string of alphanumeric number is provided which can be used to transfer Bitcoins to desired address. In order to make it highly secure a private key is also provided to Bitcoin owners, which is kept in the computing device of owners. If a hacker gets the access to the private key he can easily transfer Bitcoins to their desired location and spend them. Original owners of Bitcoins do-not have much option to recover them. On the other hand, credit cards are safe because hackers can only make fake charges in the name of card holders. If the owner goes to the bank and proves them that it was a fake charge the data-base is restored, leaving a card-holder with no loss. This is the most important security concern with the use of Bitcoin. Moreover, the storage facility of Bitcoin is provided as online wallets, which are very risky because hackers can develop programs to decrypt security measures and use information of Bitcoin owners to steal them (Cook, 2010, p.25). An attacker can control the network of a client in several ways. First of all, an attacker can relay blocks that he creates putting the user on a separate network through which he can access required information. Secondly, an attacker can filter out information required for stealing of Bitcoins by executing a double-spending attack. Setting up the user to a separate network and creating a double-spending attack can help the attacker to watch transmissions going on, under user’s ISP. The most important security issue is that all Bitcoin transactions are stored in a network, permanently and publicly. This means that anyone can see transactions and balance however name and identity is unavailable. If people with bad motives try to capture information and users keep using the same Bitcoin address, there is high probability of theft. Apart from these issues there is another major concern which might affect the use of Bitcoin in future. It is known that Bitcoin uses SHA-256 and ECDSA algorithms for cryptography (Ransom, 2002, p.26). These algorithms are considered strong but it might be broken in future. Hence stronger algorithms could be required to secure the payment mode of bit cons. Ethical issues related to the problems The most important ethical question against Bitcoin is, if this payment system can help to overcome the present issues related to hacking or is it going to open another window for socio-economic unrest. Many people argue that there are already many problems related to security of money and Bitcoin would just increase the chances of thefts. People also believe that spending the energy in production of Bitcoin is wastage because the digital currency will be used as solid money once it is transferred so the use is not justified. These issues have also grown in recent times because many people against the idea of Bitcoin production suggest for using money and resources for development of villages. The ethical issue Bitcoin is facing today is because of the risks it includes during a transaction process (Ifac, 2014, p.1). Though Bitcoin uses many safety measures in order to prevent any mishaps during transaction or storage of Bitcoins but chances of theft persists which is unfavourable for users. People have always been afraid of new processes because they try to figure out the risks involved in those before understanding the benefits. These situations have led to development of ethical theory on the issues of Bitcoins. Implication of ethical theory The basis of ethical theory has arrived from Kant’s categorical imperative. There are mainly two basic approaches to ethical theory, Teleological approach and deontological approach. Both approaches are opposite in nature. The teleological approach of ethical theory states that the issues related to safety of Bitcoin usage depends on the amount of risk people find it while using it. Moreover based on the teleological approach valid information from IT professionals are required in order to understand the consequences related to usage of Bitcoins. It is clear that the usage of Bitcoin involves some risks however it is a modern way towards transaction methods. Based on comments from professionals it has been observed that the usage of Bitcoin is important and the ethical issues are imaginary. There have no incidents occurred so far regarding the usage of Bitcoins. On the other hand the deontological approach states that the usage of Bitcoins can be justified if IT professionals and authorized person can make the transaction process safer. According the deontological theory the issues related to Bitcoin usage should be at a decreasing trend, then only its usage can be regarded ethical for the society. Role and responsibilities of IT professionals Information Technology is very important for the existence of human life in the world. Undoubtedly IT professionals and experts play very important role to secure and safeguard money and property of people in order to prevent chaos in the society. The usage of Bitcoin requires understanding of complex terms such as nonce, hash and block. Many people do-not about the security measures designed for them. The lack of complete knowledge of people increases the requirement of professionals who can make people understand about the usage and safety of Bitcoin transactions. IT professionals not only help Bitcoin owners by educating them but they are also responsible for protecting them against criminal activities. It is the core responsibility of IT professionals to detect an attack and respond quickly in order to save people against fraudulent. IT professionals play a crucial role in providing security to Bitcoin owners by providing surveillance 24 hours and checking for any uneven occurrence of blocks. Bitcoin system of payment contains a two-way safety process as designed by experts. In order to send and receive Bitcoins, the payer and payee both have to enter their digital signature along with the encrypted code designed for securing information. Thus, it can be said that bit coin usage is safe. Moreover experts have implemented the idea of decentralizing the payment methods which has reduced the risks of middle-man. However, it is the responsibility of IT professionals to take few more steps in order to provide users complete safety and security during transactions (Windley, 2012, p.17). The block chain used during Bitcoin transaction is getting older and the amount of threat is increasing rapidly hence new methods would be required for better security services. IT professionals do-not work for money only. They have great responsibilities for securing private information of people. IT professionals have been safe-guarding private information and money time to time by developing new tools and algorithms. Their role is very important in the Information Technology sector. They are also responsible for detecting hacking and locating hackers with the help of IP addresses. The issues associated with Bitcoin are not new but the concept of Bitcoin is new for the world. It is the responsibility of IT professionals to assure people about the security measures involved in the transaction processes because they can understand the working of Bitcoin system better than anyone else. Hence it can be stated that IT professionals, system administrators and computer experts play very important role in detecting and stopping cyber-crimes. References Ifac., 2014. It’s not really about Bitcoin, it’s about change. [Online]. Available at: < http://www.ifac.org/global-knowledge-gateway/viewpoints/it-s-not-really-about-bitcoin-it-s-about-change>. [Accessed on September 22, 2014]. Windley, P., 2005. Digital identity. London: Routledge. Ransom, D., 2010. Dynamic web forms. London: Sage. Cook, T., 2010. Compliance in today’s global IT system. London: Routledge. . Read More