Tuesday, July 15, 2014

"Bitcoin is a techno tour de force" Reason 3: Secure Money Storage and Transactions

Every couple of years my credit card number gets stolen and I have to deal with canceling my card, getting a new one, and then reconfiguring my auto withdrawals, etc. Credit cards were invented before modern cryptography and so they could not take advantage of many of the advances we have now. The credit card number you supply when buying things is the very information that a thief needs to steal money from your account. Bitcoin accounts cannot be stolen in this way. 

Bitcoin uses a technology called public/private key cryptography. Public/private keys allow a person to pay for something in Bitcoin without ever needing to provide the secret numbers that allow access to the account. This means since the secret access numbers (private key) are never provided, the purchaser is not vulnerable to having their money stolen when making a purchase.

This video explains the basics of using public/private key cryptography to create digital signatures: 

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