Once the central bank in bank accounts and limited the amount of cash that might be withdrawn from bank accounts it created a massive uproar that was felt around the world. If consumers did not need access to money how could they buy and sell what exactly needed seriously to carry on inside our modern world? The stark reality is they cannot so consumers all over the world started to find safer alternatives to fiat currency. Fiat currency is currency that has no tangible value besides what the federal government assigns to it.
Individuals are looking for a way to store their buying power to protect themselves from having bank accounts frozen for indefinite periods of time. Lots of people Spice started trading in Bitcoins. This is a crypto-currency which means it can not be easily counterfeited but before anyone starts buying into this new currency it would be prudent to understand the risks.
Bitcoins aren’t issued by any central bank or government so there is no accountability whatsoever. If you’re dealing with Dollars,Euros or Pounds you’ve the assurance that the federal government behind it will honor the debt while Bitcoins don’t provide any guarantees at all. The truth that no body 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 which can be encrypted in your computer. While this will provide a sense of security if your computer is lost your Bitcoins are gone as well. It’s nothing like a charge card where you can get an upgraded and carry on like nothing has happened.
While the security with this currency is just a concern undoubtedly the greatest worry is the value of it. The perceived value of a Bitcoin can alter in a minute and unlike fiat currencies which are backed by hard assets owned by a country if a Bitcoin value drops you’ve nothing of value at all.
There are a few exchanges all over the world that sell and buy Bitcoins, but you should not buy them thinking they will rise in value. They’re an electronic 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 being that they are not provided by way of a government. The value if highly volatile and could possibly be reduced to zero in a heart rate and the straightforward fact that the currency has only been with us for a few years shows it’s not proven to be reliable.
If you’re looking for a way to preserve value then precious metals like gold,silver and platinum may be more beneficial since they’ve been used for centuries as a moderate of exchange.
When it comes to investing you need to never make rash decisions but weigh the risks and potential payoff and remember that there’s no sure things in regards to digital currencies like Bitcoins so approach at your personal risk.