When the central bank in bank accounts and limited the amount of cash that would be withdrawn from bank accounts it created a massive uproar that was felt across the world. If consumers did not have use of money how could they buy and sell the things needed to keep on inside our modern world? The stark reality is they cannot so consumers all over the world started to consider safer alternatives to fiat currency. Fiat currency is currency that’s no tangible value aside from what the federal government assigns to it.
Individuals are buying a solution to store their buying power to safeguard themselves from having bank accounts frozen for indefinite periods of time. Many people Spice started trading in Bitcoins. This is a crypto-currency meaning it cannot be easily counterfeited but before anyone starts buying into this new currency it will be prudent to understand the risks.
Bitcoins aren’t issued by any central bank or government so there is no accountability whatsoever. If you are working with Dollars,Euros or Pounds you have the assurance that the federal government behind it will honor the debt while Bitcoins do not provide any guarantees at all. The truth that no-one truly knows who made this currency so there is no method of knowing whether it could be stolen right from under our eyes.
These Bitcoins are stored inside a digital wallet that may be encrypted on your own computer. While this will provide a sense of security if your personal computer is lost your Bitcoins are gone as well. It is nothing like a charge card where you could get an alternative and keep on like nothing has happened.
While the security of this currency is really a concern definitely the biggest worry is the worth of it. The perceived value of a Bitcoin may change in a minute and unlike fiat currencies which can be backed by hard assets owned by a country if your Bitcoin value drops you have nothing of value at all.
There are certainly a few exchanges all over the world that sell and buy Bitcoins, but you ought not find them thinking they are likely to rise in value. They are a digital commodity which some would classify as a “fad “.Tomorrow it might lose all its real value and never recover.
So to recap the risks, you may not have any real security with Bitcoins as they are not provided by a government. The worth if highly volatile and might be reduced to zero in a heart beat and the simple fact that the currency has only been around for a few years shows it’s not demonstrated to be reliable.
If you are buying a solution to preserve value then precious metals like gold,silver and platinum may be much more beneficial since they’ve been useful for centuries as a moderate of exchange.
As it pertains to investing you need to never make rash decisions but weigh the risks and potential payoff and remember that there is no sure things as it pertains to digital currencies like Bitcoins so approach at your own personal risk.