Even though Bitcoin and other cryptocurrencies are surging in popularity, there’s plenty of reasons to stay away from them. Despite sporting many appealing features, most financial experts warn about blindly putting faith in cryptocurrencies. Last year Bitcoin caught the public’s eye when it surged 1,900% to $20,000 a coin. Even though it settles down to $14,000 a coin, the hype surrounding this new currency is getting stronger. The sudden jump in value made many Bitcoin owners rich, which has caused more people to jump on the bandwagon. Unfortunately, they may have made a grave mistake. Discover why should consumers avoid investing in Bitcoin?
To truly understand why to avoid Bitcoin, it’s essential to know how it works. Bitcoin is the world’s first decentralized digital currency that’s harvested by coders and stored in digital wallets. It was released as open-source software in 2009 by a group of people under the alias Satoshi Nakamoto. It offers users complete freedom from banks, government, and central authority. You can use this currency for trading with complete anonymity and carries low costs for transactions. This proved to be a potent combination, and today around 5.8 million people use this digital currency.
Drawbacks of Bitcoin
Despite enjoying fanatic promotion from its advocates, it is far from a stable currency. This is due to the fact that many of its most appealing features are major problems. While most consumers would love to be free from corrupted banks and indebted governments, there’s a reason why they exist. It does not have the support of anything more than hype and it behave exactly like economic bubbles. While it’s possible to get rich if you invest at the right time. At the same time, the odds of losing everything with this is stronger.
It’s necessary to find a few factors before investing in Bitcoin. The last thing consumers should do to save face is investing in something that they shouldn’t. Even though skepticism of cryptocurrencies is always there, examining both sides of the argument is crucial. For this reason, we compiled a list of three main reasons to avoid cryptocurrencies. Don’t lose your money, examine the facts first!
3 Reasons to Not Buy Bitcoin
Reason #1: Potential Crackdowns
Even though the main appeal of cryptocurrencies is anonymity, this could become its downfall. While it’s great to be freed from normal regulations, this lack of supervision opens up doors to criminals. Less than a decade after its debut, the news is flooded with stories of hackers receiving untraceable payments with Bitcoin. On top of funding hackers, everything from credit card scammers to dark web drug dealers uses this currency. This is one of the reasons why should consumers avoid Investing in Bitcoin.
While most governments ignore these crimes largely, they could instantly change with one disaster. If any major terrorist attack is funded with Bitcoin in the future, this currency will experience massive government crackdowns. Putting your faith in the morality of crooks is never wise, which is the single biggest argument not to invest.
Reason #2: Increased Transaction Fees
To avoid falling victim to coordinated hacker attacks, Bitcoin remains decentralized. This network is run by numerous miners who get payment by block rewards and transaction fees. Currently, block rewards are the main revenue, which is a huge problem. If the popularity of Bitcoin ever falters, so will the profitability of block rewards for the miners. This will lead to increased transaction rates to keep the miners from backing out. The fees also fluctuate depending on how many people are using the currency, which has already caused them to rise.
Reason #3: Bitcoin Exchanges are Targets
– When purchasing Bitcoin, it uses the exchange sites for transactions. Even though some exchanges are quite respectable, sites are not safe. A Bitcoin exchange site is basically an online bank, which makes them extremely appealing targets for hackers. Countless exchanges have been raided by hackers, and even a prominent South Korean exchange was forced to shut down. There’s little to no legal recourse for this sort of robbery, so any purchase should be stored on a wallet directly on your phone.