When the central bank in Cyprus froze bank accounts and limited the amount of cash that would be withdrawn from bank accounts it created a massive uproar that was felt round the world. If consumers did not need usage of money how could they buy and sell the items needed to continue inside our modern world? The reality is they can’t so consumers around the world started to consider safer alternatives to fiat currency. Fiat currency is currency that’s no tangible value aside from what the government assigns to it.
Customers are buying a way to store their buying power to safeguard themselves from having bank accounts frozen for indefinite periods of time. Many people started trading in Bitcoins. This can be a crypto-currency this means it can’t be easily counterfeited but before anyone starts buying into this new currency it will be prudent to understand the risks.
Bitcoins are not issued by any central bank or government so there is no accountability whatsoever. If you’re dealing with Dollars,Euros or Pounds you have the assurance that the government behind it will honor the debt while Bitcoins don’t provide any guarantees at all. Buy bitcoin instantly The fact that no body truly knows who made this currency so there is no method of knowing whether it could be stolen from the comfort of under our eyes.
These Bitcoins are stored in the digital wallet which can be encrypted on your computer. While this should provide a feeling of security if your computer is lost your Bitcoins are gone as well. It is not like a credit card where you are able to get an alternative and continue like nothing has happened.
As the security with this currency is a concern by far the greatest worry is the value of it. The perceived value of a Bitcoin can alter in a minute and unlike fiat currencies which are backed by hard assets owned by a nation in case a Bitcoin value drops you have nothing of value at all.
There are certainly a few exchanges around the world that sell and buy Bitcoins, but you should not find them thinking they are likely to rise in value. They are an electronic digital commodity which some would classify as a “fad “.Tomorrow it may lose all its real value and never recover.
So to recap the risks, you do not have any real security with Bitcoins as they are not provided by way of a government. The worthiness if highly volatile and could be reduced to zero in a heart beat and the straightforward proven fact that the currency has only been with us for a couple years shows it’s not demonstrated to be reliable.
If you’re buying a way to preserve value then precious metals like gold,silver and platinum may be more beneficial since they have been useful for centuries as a moderate of exchange.
As it pertains to investing you ought to never make rash decisions but weigh the risks and potential payoff and remember that there’s no sure things as it pertains to digital currencies like Bitcoins so approach at your own risk.