Is it possible that upcoming security companies will prevent Bitcoin from an early collapse?

Bitcoin, the pioneering cryptocurrency, has been making waves in the financial world, but its security record has been a point of concern. According to Thales e-Security, Bitcoin's security is significantly worse than that of the banking industry. This is chiefly due to the highly dependent nature of Bitcoin's security on the safekeeping of private cryptographic keys, which are vulnerable to theft, loss, and misuse.

Over the years, more than 10% of all Bitcoins that have ever existed have been stolen or lost, amounting to a staggering $350 million. Scandals such as Bitcoinica and Mt Gox have further fuelled consumer skepticism towards Bitcoin.

However, it's important to note that mainstream consumer and business adoption of Bitcoin has not yet been achieved. To reach its full potential, a proactive approach to finding security solutions is necessary.

Bitcoin exchanges, unlike the banking industry, often lack the heritage of protecting highly sensitive data. This has left the crypto world vulnerable to attacks. But there's a silver lining. Notable startups are working diligently to improve Bitcoin security.

Projects linked to the Open Source Security Foundation (OpenSSF) are collaborating broadly on securing open source software critical to blockchain and crypto infrastructure. While specific Bitcoin-focused startups were not named explicitly, efforts are being made to enhance supply chain integrity, AI-driven security, and secure coding best practices within the crypto ecosystem.

One such startup is Gem, which offers an API and transaction service that enables developers to build secure Bitcoin apps and products. The company's focus is on securing Bitcoin by incorporating Hardware Security Modules (HSMs) into their solutions. HSMs have traditionally been used to protect payment infrastructure, but have not been compatible with Bitcoin until now.

The traditional payments industry also requires keeping private keys secure, much like Bitcoin. Despite numerous setbacks, top technologists and bankers are exploring opportunities for blockchain technology, with Peter Thiel, co-founder of PayPal, stating that Bitcoin has the potential to change the world.

The introduction of new security measures like those provided by Gem could bring Bitcoin to the mainstream and make cryptocurrency a trustworthy way of making payments. Bitcoin needs a step change in security due to questions about the quality of implementation and security practices within the community. With the right measures in place, Bitcoin's future as a secure and reliable digital currency may well be secured.