Part 3/12:
A crucial distinction emerges when comparing Bitcoin transactions with traditional credit card payments.
Traditional payments involve transmitting sensitive information such as credit card numbers, expiry dates, and CVC codes. This data is highly sensitive and vulnerable to hacking, creating central points of failure that have led to massive data breaches at Target, Home Depot, and JPMorgan Chase.
Bitcoin transactions, on the other hand, transmit only a signed authorization message. This contains no sensitive data; it merely indicates an unspent output and the recipient address. The transaction's signature and references ensure its authenticity without revealing personal identifiers, making it immune to theft or impersonation.