The Analysis and Countermeasures on Security Breach of Bitcoin

Due to the strength of bitcoin including the convenient payment and transfer, exchange into legal tender, low transfer fee, and others, its usage is increasing dramatically. Bitcoin is an e-money and virtual currency currently used as a means of payment in about 20,000 online companies and 1,000 offline stores as of Feb. 2014. Different from previous e-money, there is no issuing institution and it has trait of no regulation by countries or companies. However, as there is an increase in value of bitcoin followed by Cyprus financial crisis in past March, issues regarding the security breach on the rise. Since the exchange between legal tender and virtual currency is free in case of bitcoin, direct damage caused by security breach is very large. Also, as there is no governing institution, the user is responsible for all loss in case of damage occurrence. Therefore, the purpose of this study is to look into transaction method and security breach trend of bitcoin and its countermeasures.