Coin Center, a US-based non-profit research and advocacy organization, has released a new report prepared by the center's Director of Research, Peter Van Valkenburgh that explores how cryptocurrencies can support financial data security and privacy.
The report says financial data security enables people to have main control over the credentials that allows them to participate in financial transactions. Technological breakthroughs in the recent times, especially credit cards, have worsened security in the name of countervailing qualities: speed, universality, and ease-of-use.
Moreover, it states that cryptocurrency such as bitcoin facilitates a consumer to reliably and provably make payment without the use of intermediaries as with a credit card, and bitcoin users can exercise greater control over their data security.
However, the report acknowledges that bitcoin and the blockchain technology is not without its own security risks. The online accounts can be hacked and stored virtual currency can be stolen. While a credit card company would likely refund the amount lost due to fraudulent charges of an attacker, digital currency is not easily refunded once stolen from a wallet.
The report concludes that "policymakers should be aware that cryptocurrencies and block chain technology have this great potential to promote both security, privacy, and the rule of law. These tools already provide enhanced security for simple payment applications and they may, one day soon, offer robust privacy for the law abiding citizens without facilitating illegal activity among the less virtuous."
