Bitcoin

The Dangers of Bitcoin 2018

dangers of bitcoins

The Dangers of Bitcoin

Introduction

Bitcoin seems to be an ever-growing digital currency, which has caught the attention of far too many curious investors. It is fair to say that this currency is very successful, at least for now. But here comes a question growing almost as fast as the currency itself, “for how long?”  Many Bitcoin enthusiasts and owners have to a large extent, closed their eyes to the possibility of Bitcoin being a dangerous venture. There are actually actual dangers of bitcoin. There are so many reasons for the many dangers of bitcoin and here are some of them.

Analysis of the dangers of bitcoin

Let us start here; Bitcoin is money! It must fluctuate in value at one time or the other. We say one such unexpected downward slope in the Bitcoin growth curve in September 2017 because of only one country, China. Now, although the Bitcoin has no central control over it, the currencies exchanged for this decentralized currency have. China has no control over Bitcoin, yet when it had a domestic policy crackdown, the value of Bitcoin saw a fall. So, even if exchange rates don’t affect the actual transfer of bitcoins from one person to another, there is a danger that the fall and rise of domestic exchange rates can affect the value of money gotten by an individual, after exchanging Bitcoins for domestic currency.

Also, take a look at this. In 2014, a total of $350 million in Bitcoins was lost by MtGox, an exchange in Tokyo, Japan due to cyber theft. And yes, MtGox collapsed. Don’t think it was a danger for that time, years ago, because in July 2017, a Russian nationalist, Alexander Vinnik, who is also linked with the MtGox hack, was arrested for laundering over $4 billion for people including computer hackers and drug traffickers using a bitcoin exchange. The danger in the maintenance of the anonymity of bitcoin owners has also made it very difficult, at least for now to catch a hacker. Who really knows how much is hacked from wallet transactions daily? Every bitcoin transaction made is logged in the Blockchain, and these transactions can be tracked by Bitcoin miners to prevent counterfeiting, but if your transaction can be traced, then they are not anonymous. This, of course, is one of the inherent dangers of bitcoin. Many poorly secured Bitcoin wallets have also been hacked into and cleared up, and because there is no insurance, there are no means of retrieval. And no permanent solution to these dangers of Bitcoin hacking can really be provided.

Read about “how to secure your Bitcoin Wallets 2018”

Furthermore, Bitcoin mining stabilizes the price of this currency. And it has been agreed that only 21 million Bitcoins will be mined, has anyone considered the dangerous effect which the completion of Bitcoin mining might bring? Not to talk of the highly risky venture Bitcoin mining is becoming. Currently, it takes more than $20,000 to acquire the necessary mining equipment, in addition to the high cost of electricity. There is, therefore, a real danger in this process, because due to the competition in solving the complex mining math puzzles, the possibility of making returns alone is not encouraging, and the possibility of making a substantial profit is even much worse. It is not uncommon for miners to breach their contracts and quit from their mining pools and because the market for mining hardware is not large, there is an eventual loss of money. So with this, we see that the bigger this currency gets, the more danger it poses to its owners.

Related: TOP 10 BITCOIN MINING POOLS

About the author

Tayyab M

I love to talk about global tech-happenings, startups, industry, education and economy.

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