There are many crypto currencies, but bitcoin, which was first created in 2009 is the most popular of them all. Bitcoin is a digital currency that does not require any intermediary (bank) to make transactions between persons. It is experiencing a high growth rate, with different people learning about it. A lot of merchants are beginning to venture into the use of bitcoins, and a lot of bitcoin miners emerge daily.
Although this crypto currency is being used by a lot of people, there still exist back and forth argument on the risks involved in dealing with bitcoins. Bitcoins are also referred to as “digital gold” but there many risks involved in dealing with this gold. Just like how there are risks involved in all businesses, we have the same with bitcoins. These are some of the risks of bitcoins:
1. Volatile in nature: Unlike physical currency, bitcoins do not have a standard worth. The prices of Bitcoins fluctuate due to its high rate of sales. Bitcoin values are capable of falling for up to 50% in a day. People that acquired a large bitcoin will experience a huge loss from this.
2. High theft possibility: Technology is gradually advancing, and there are a lot of tech gurus and hackers in the industry. Since Bitcoin uses the internet, these people are capable of breaking into the bitcoin wallet. If they can breach the Bitcoin wallet security, they can steal a large number of bitcoins. These people do not need to carry a gun and rob a bank. A bitcoin theft worth millions of dollars was recorded in Japan a few years ago.
3. Fraud alerts: The internet is the new marketplace. It is a place where a lot of people have been able to make lots of money by making e-commerce transactions. It has also helped a lot of businesses expand. Although people make legit money from it, it has recorded a lot of fraudulent activities over the years. Bitcoin is an internet based money system. Therefore, fraudsters can also use this to cheat unsuspecting merchants.
4. Irreversibility: This one could be a dual-edged sword. Many people are attracted to Bitcoins due to it’s being irreversible method of payment, that will kill the possibility of chargebacks that can ruin business. However, if you have been a victim to fraud or theft, chances are your Bitcoins are gone for good, due to the same rule.
Briefly, bitcoins have over the years proved a goldmine for many people. However, the risks involved cannot be overlooked when making transactions with bitcoins. The safest haven in all of this is to take necessary precautions when taking risks. These precautions will pave a way to the safest use and avoid any online treat by the hackers.