When the central bank in bank accounts and limited the sum of money that would be withdrawn from bank accounts it created a massive uproar that has been felt across the world. If consumers did not need use of money how could they buy and sell the things needed seriously to carry on inside our modern world? The stark reality is they can’t so consumers all over the world started to find safer alternatives to fiat currency. Fiat currency is currency that has no tangible value apart from what the government assigns to it.
Individuals are buying solution to store their buying power to safeguard themselves from having bank accounts frozen for indefinite periods of time. Many individuals Spice started trading in Bitcoins. This can be a crypto-currency meaning it can not be easily counterfeited but before anyone starts buying into this new currency it could be prudent to understand the risks.
Bitcoins aren’t issued by any central bank or government so there is no accountability whatsoever. If you should be coping with Dollars,Euros or Pounds you’ve the assurance that the government behind it will honor the debt while Bitcoins don’t provide any guarantees at all. The truth that no-one truly knows who made this currency so there is no way of knowing whether maybe it’s stolen from the comfort of under our eyes.
These Bitcoins are stored in the digital wallet that may be encrypted on your computer. While this will provide an expression of security if your personal computer is lost your Bitcoins are gone as well. It’s not like a credit card where you are able to get an alternative and carry on like nothing has happened.
Whilst the security of this currency is really a concern undoubtedly the biggest worry is the worth of it. The perceived value of a Bitcoin may change in a minute and unlike fiat currencies that are backed by hard assets owned by a nation in case a Bitcoin value drops you’ve nothing of value at all.
There are certainly a few exchanges all over the world that sell and buy Bitcoins, but you shouldn’t buy them thinking they are likely to rise in value. They are an electronic digital commodity which some would classify as a “fad “.Tomorrow it could lose all its real value and never recover.
So to recap the risks, you may not have any real security with Bitcoins since they are not provided by way of a government. The worthiness if highly volatile and could possibly be reduced to zero in a heartbeat and the easy fact that the currency has only been with us for some years shows it is not shown to be reliable.
If you should be buying solution to preserve value then precious metals like gold,silver and platinum may become more beneficial since they have been used for centuries as a medium of exchange.
When it comes to investing you must never make rash decisions but weigh the risks and potential payoff and remember that there is no sure things in regards to digital currencies like Bitcoins so approach at your personal risk.