Once the central bank in Cyprus froze bank accounts and limited the amount of cash that could be withdrawn from bank accounts it created a massive uproar which was felt round the world. If consumers did not have usage of money how could they buy and sell the things had a need to continue within our modern world? The reality is they can’t so consumers all over the world started to consider safer alternatives to fiat currency. Fiat currency is currency that has no tangible value aside from what the government assigns to it.
Customers are buying a solution to store their buying power to guard themselves from having bank accounts frozen for indefinite periods of time. Lots of people started trading in Bitcoins. This is a crypto-currency this means it can’t be easily counterfeited but before anyone starts buying into this new currency it would 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’ll honor the debt while Bitcoins don’t provide any guarantees at all. Buy bitcoin The fact nobody truly knows who made this currency so there is no means of knowing whether it could be stolen from the comfort of under our eyes.
These Bitcoins are stored inside a digital wallet which can be encrypted on your computer. While this would provide a feeling of security if your computer is lost your Bitcoins are gone as well. It’s not like a credit card where you could get an alternative and continue like nothing has happened.
Whilst the security with this currency is a concern definitely the greatest worry is the value of it. The perceived value of a Bitcoin can change in an instant and unlike fiat currencies which are backed by hard assets owned by a country if your Bitcoin value drops you have nothing of value at all.
There are a few exchanges all over the world that sell and buy Bitcoins, but you ought not get them thinking they are likely to rise in value. They are a 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 may not have any real security with Bitcoins being that they are not provided with a government. The worthiness if highly volatile and might be reduced to zero in a heartbeat and the easy undeniable fact that the currency has only been around for some years shows it’s not proven to be reliable.
If you’re buying a solution to preserve value then precious metals like gold,silver and platinum may be much more beneficial since they’ve been used for centuries as a medium of exchange.
When it comes 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 personal risk.