The principle of safe transactions is that big must be big, and the payment process plays an important role in preventing funds from being stolen.
Let's use Bitcoin as an example. The core principle is decentralization, which has a significant impact on security. Centralized models like traditional banks or payment networks rely on access control and approval to keep thieves out of the system. In contrast, decentralized systems like Bitcoin put the responsibility and control completely in the hands of users. Therefore, network security is based on proof of work rather than access control, the network can be open, and Bitcoin transmission does not require encryption.
In a system such as a credit card payment network, payment terminals are open and contain a user identifier, a "credit card number". After the initial payment, anyone with access to that identifier can repeatedly "drain" funds from the owner. As such, payment networks must be protected end-to-end by encryption, and must ensure that no eavesdropper or middleman can compromise payment communications, either in transit or after they are stored (at rest). If a thief gains access to the system, he or she can completely compromise current transactions and payment tokens and use them to create new transactions. Even more unfortunate is that when customer data is leaked, personally identifiable information is exposed to identity thieves, and action must be taken to prevent stolen accounts from being used for fraud.
Bitcoin is very different. A Bitcoin transaction authorizes only one specific recipient and cannot be forged, tampered with, or modified. They do not reveal the private identity of any party, nor can they be used to authorize additional payments. Therefore, the Bitcoin payment network does not need to be encrypted or protected from eavesdropping. In fact, Bitcoin transactions can be broadcast over public channels (such as unsecured public Wi-Fi, or Bluetooth) without compromising security.
Bitcoin's decentralized security model puts a lot of power in the hands of users, and with that power comes the responsibility of keeping the keys secure. This is not easy for most users, especially when using a general-purpose computer device like a smartphone or laptop that can connect to the Internet. Although Bitcoin's decentralized model avoids common theft issues, many users fail to keep their keys secure and are hacked one after another.
