The recent data breach at Target is one of the worst breaches of credit card information ever. But if those millions of Target Corp. (NYSE: TGT) customers had been using Bitcoin instead of credit cards, the thieves could not have stolen any of their personal data.
The thieves who stole the credit card data from Target customers took the information from Target's own computer systems. They got credit card numbers, names, and home addresses. In short order, the Target thieves were selling this data to other criminals over the Internet.
This is more evidence of the rising vulnerability of credit cards to clever and determined thieves.
But using Bitcoin is much more secure than paying with your Visa or Mastercard.
In fact, Bitcoin's security is one of the chief advantages of using Bitcoin over other payment methods, and a big reason why we'll see more merchants move to accept the digital currency – making Bitcoin more valuable.
"A Bitcoin-based alternative to conventional credit card networks could be significantly more secure and, as a result, more convenient and affordable for everyone," Washington Post technology writer Timothy B. Lee said recently.
How Using Bitcoin Is Safer Than Using a Credit Card
Bitcoin is actually much more like cash than most other forms of payment.
Each transaction only contains an address (a unique string of characters) for the sender, an address for the recipient, and the amount of Bitcoin being transferred between them.
The address can only successfully send Bitcoin if it has access to the private key associated with a person's Bitcoin wallet. This private key is never sent as part of the transaction, however.
But just as importantly, using Bitcoin instead of a credit card also means that no personal data is transmitted or stored. That leaves potential data thieves empty-handed save for the Bitcoin addresses, which are useless without the private keys.
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.