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What are The Risks of Using Bitcoin

Posted on 5th Jul 2019 16:44:21 in Blog, Bitcoin

In the 21st century, we can all agree that we are living in a world of technology. Nowadays, you can get information more easily, know what is going on in the entire world, do business online, etc. This also includes money transactions. Virtual currency is now the most popular way to make a payment or to receive money. One of the ways in which you can do it is using Bitcoin. However, you should be careful. There can be certain risks of using Bitcoin. Even if it is easier to transfer money by using Bitcoin, you need to be wise and to think carefully before you use this type of cryptocurrency.

What is Bitcoin?

Bitcoin, as we mentioned, is a cryptocurrency, a form of electronic cash. What is specific about using Bitcoin is that it is a decentralized digital currency without a central bank. Speaking about transactions, they are verified by network nodes through cryptography. The Bitcoin first appeared in 2009 when a person or group of people using the name Satoshi Nakamoto released it as open-source software. During these 10 years, Bitcoin has had periods when the value was low and when it was high. So, you can make the conclusion that you never know what the future of money cryptocurrency is. Also, the risks of using Bitcoin are present.

Making payments in Bitcoin can be a risk
Even though it sounds that having this cryptocurrency is great, there are risks of using Bitcoin

How to get Bitcoin?

Now that you have found out what Bitcoin is, you might have the desire to find out how you can get yourself Bitcoin? This might sound absurd to you, but you can get Bitcoin by mining. Before you start doing it, it is important to understand how it works. First of all, it is legal to earn Bitcoin by mining. It happens when a verification program with the SHA-256 algorithm runs and verifies bitcoin transactions that have met the security conditions of Bitcoin Network Ledger. After that, the speed can be measured with hash per second. When the verification is completed, Bitcoin will pay miners for their hard work. As you can see, it looks interesting, but it requires a lot of energy and time. If you are looking to find more about how to do mining, you can always search for complete Bitcoin mining tutorials.

One of the risks of using Bitcoin is that your money is not completely secured

As we mentioned, Bitcoin does not have a central bank. Keep in mind that this is a type of virtual currency which you cannot say is 100% secure. An example of the risks of using Bitcoin is that your money can be stolen by hackers! From a Taiwan company, hackers stole 40 M worth Bitcoin, which you can say is a pretty huge amount. This can be a very good example of taking a risk when investing in Bitcoin and how everything can change really fast.

Making payments in Bitcoin for your own purpose is also a risk

Another good example of the risks of using Bitcoin is paying for something in this virtual currency. For example, if you own a WP site, it is logical that you will need to invest money for keeping it. In most cases, you need to secure WP by constant monitoring which requires money. To avoid any kind of unpleasant situations, you should definitely think about using Bitcoin as the way of paying. Also, one of the interesting things is that the value of Bitcoin is changing. For example, a really good period for using this currency was at the end of 2017, when you could get 10,000 USD for 1 Bitcoin. Most people say that in this period Bitcoin was unstoppable.

Dollar and bitcoin
During the past 10 years, the value of Bitcoin has changed

The value of Bitcoin changes all the time

As we said, the value of Bitcoin is changing constantly. We have mentioned the end of 2017 when the price for 1 BTC was 10,000$. But, if you look carefully, you can see that in 2018, Bitcoin prices dropped below 7,000$. At the end of 2018, the price was below 3,500$. During this period, internet companies such as Facebook banned people from advertising cryptocurrencies. In March, Google and Twitter prohibited the advertising of cryptocurrency. You can see that everything keeps changing when it comes to virtual money, which is one of the risks of using Bitcoin. The future is not 100% secure.

Bitcoin transactions are irreversible

Even though using the Bitcoin can make the entire process easier, you need to know that the money you have is irreversible. In other words, if you send Bitcoin to a wrong person or to a wrong company, the chances are really low to get that money back. This cryptocurrency is not backed by any entity. In the case that you lose it, the Bitcoin network will not be able to give you a refund. So, you can say that this is another risk of using virtual currency.

Most people are using Bitcoin for illegal commerce

Speaking about the abuse of using Bitcoin, there are plenty of examples. Another reason why this type of virtual money is not safe is that you cannot know where that money comes from if you are trading with a person or a company on the internet. For example, people can use Bitcoin for selling meds, money laundering, buying and selling weapons, etc.

Now that you know the risks of using Bitcoin, think twice about using this cryptocurrency!

As you can see, there are many negative sides of using this cryptocurrency. However, whether you are already using this virtual money or you are planning to start, we can all agree about one thing: the main thing about the risks of using Bitcoin is that the value is changing and it is an unsafe way of earning money.

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