5 Risk of Bitcoin You Need to Beware
Like other financial instruments that exist first, Bitcoin not only brings potential, but also risks. The price of this virtual currency indeed shows a very promising prospect, but there is a minus value that makes the use of Bitcoin still to be watched out. As both an online payment tool and an investment asset, here are 5 Bitcoin risks that are still weighing on their use:
Bitcoin Storage Security Is Not Maximum
Bitcoin is stored in a virtual wallet that can be installed with a private key before use. But because such data is stored in the internet network, its security is of course very vulnerable to being hacked by cyber criminals.
Some Bitcoin burglary cases have occurred and harm users up to millions of US Dollars. Unmitigated, hackers no longer target wallets individually, but target Bitcoin wallet and exchange sites that oversee many customers. Inputs.io and Mt. Gox is an example of victims of Bitcoin hackers who feel huge losses.
The alternative to storing the Bitcoin wallet is that there is no risk.
Very Sharp Currency Value Fluctuations
The value of Bitcoin is very easily affected by global issues because of the large number of investors who now use Bitcoin as an investment asset. When there is positive news, investors are busy buying Bitcoin, but as soon as there is negative news, not a few are removing the digital currency. Because the volume and spread of Bitcoin is still not evenly distributed, price volatility can also move very sharply.
Within one day, the value of Bitcoin can even rise or fall by more than 50%. This happened when at the end of 2013, the value of Bitcoin changed from $ 1,100 to $ 500 in just a few hours after the Chinese government issued a ban on transactions with Bitcoin.
No doubt, the value gap that tends to harm financial transactions often occurs. For traders, such movements are also dangerous because large losses can occur in a very short time.
Prone to Fraud
Believe it or not, the concept of using Bitcoin as a digital currency is not evenly distributed in all circles of society. Only those who understand and follow the development of technology have understood the true intricacies of Bitcoin. Even so, news about the potential of Bitcoin turned out to be faster reaching the ears of investors. Many of them then want to buy Bitcoin without really knowing what Bitcoin really is.
This is the risk that always infects new investments. If the parties are not responsible, then the investors’ ignorance can be used to support their fraud. At present, there are many examples of scam cases that initially promised to be able to manage Bitcoin investors and generate monthly returns. When occupied for several months, illegal business like this will usually disappear and take away customers’ funds.
Online, merchants that accept Bitcoin payments do increase.
But in fact, Bitcoin is still not quite familiar with offline merchants. Its nature as a decentralized currency that is not centralized in any authority makes it less trusted by the public. Therefore, Bitcoin as a payment instrument is still very limited in its area of application.
Harmful to the State Economy
One of the reasons why Bitcoin studies run hard in some countries is that the system is free of transaction fees and taxes. In fact, some countries have relied on their income from public tax revenues.