Have you heard people saying “never invest in cryptocurrencies”? Around half of the population hesitates when it comes to investing in cryptocurrencies due to many reasons. Some crypto experts even say that Bitcoin makes a terrible investment. If you still want to trade Bitcoin, visit How to mine Bitcoin and to trade successfully.
Unregulated
The major issue with Bitcoin currency is that it doesn’t involve any central authority, which means regulatory organizations or central authorities don’t regulate it. On the other hand, other types of investments like mutual funds provide a complete track of transactions and money to government means central bodies or banks regulate these.
If users find any issues while making transactions, they can contact banks, whereas bitcoin’s case is completely different. Bitcoin is independent of central authorities and banks, and even if there are any discrepancies, you can’t blame or contact any central authority.
Illegal tender
Unlike shares and stocks, trading Bitcoin is illegal in some countries. Cryptocurrencies like bitcoin aren’t considered legal tender by the Reserve Bank of India. Even in 2018, RBI banned the use of cryptocurrencies, but later it was removed, increasing the risk for investors. Banks and governments or specific countries don’t allow their customers to trade in bitcoin, while some countries have warned people about cryptocurrencies.
Investors invest in Bitcoin at their own risk and have to pay income taxes and follow other regulations set by the government.
Volatile market
Undoubtedly, Bitcoin’s market has shown an upward trend in 2020, and it is continuing in 2021 as well, but the market of bitcoin and other cryptocurrencies is extremely volatile. There is a sudden increase and decrease in bitcoin price, and it has the power to make you a billionaire and make you poor at the same time. Its value drops in seconds if it started to decline, and at that time, you may lose all your funds.
Less security
Another scary thing about Bitcoin is that its investments aren’t safe. The Bitcoin market is irregular and highly uncertain in its future. There are always prying eyes waiting for users to don’t secure their private keys to attack digital wallets. Bitcoin investments are vulnerable to cyber-attacks. Each day hackers use creative ways to hack mobile devices or computers to get access to private keys of digital wallets.
Vulnerable to attacks and illegal activities
Bitcoin is a decentralized currency that clearly states that no central bodies have control over bitcoin. Banks or the government don’t regulate Bitcoin transactions, and this makes transactions untraceable, but at the same time, this makes transactions prone to cyber-attacks.
Because of the anonymity that Bitcoin provides, people are highly using bitcoin to carry out illegal activities. After the emergence of bitcoin, there has been an increase in the sale and purchase of illegal drugs, weapons and human trafficking. The anonymity feature has made it vulnerable to hackers, and most hackers demand bitcoins after attacking storage devices.
Virtual digital existence
Bitcoin is used as a medium of exchange like fiat currencies, but the thing that differentiates bitcoin and fiat currencies is that bitcoin is a digital currency. It has virtual digital existence, which means these digital coins can’t be touched or seen. These coins only exist on a network of computers and no authority or asset back bitcoin. Because of its digital existence, it is susceptible to hacks and attacks.
The emergence of more cryptocurrencies
The increasing market and value of bitcoin in the past decade is because it has given emergence to many more cryptocurrencies. Bitcoin was the first digital currency introduced in the crypto world, and developers were motivated to develop more cryptocurrencies.
Bitcoin is currently not the only digital currency built on blockchain technology, but there are many more thousands of cryptocurrencies built on this latest technology. All cryptocurrencies are giving tough competition to bitcoin, and all are growing, which means there’s no guarantee that in coming years bitcoin will be the largest cryptocurrency.
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