A long time ago, pirates used to dig up for hidden treasures. Pirates of today are mining Bitcoins. Yet, it’s not just the miners that can come into possession of Bitcoins. Anyone with internet and the willingness to take the shot can have a Bitcoin. The idea of digital money was highly likely to stir a frenzy among all kinds of people, not just investors.
Bitcoins became more and more famous as time went by and ever since their price soared to over $ 18.000, naturally, more and more people started to view Bitcoins as the new gold.
However, as with everything that is strictly digital, Bitcoins involve some risks you should be aware of if you’re interested in dealing with cryptocurrencies, whether you’re buying or selling.
Here are the main risks for Bitcoin:
- Bitcoins are quite easy to lose
The nasty truth about Bitcoins is that if you happen to lose them, you lost them for good! And they are easier to lose than you would expect. Ask buyers that set up a wallet in 2010 when Bitcoins were just starting to hit the market; just a short while ago, when they figured they actually had a fortune, they suddenly realized they forgot the password of their digital wallet accounts.
Unfortunately, these accounts don’t work like the ones for email where you can tick the box with “I forgot my password” and set a new one. You simply get a unique private key to protect your wallet.
- As digital money, they have an unclear legal status
In most countries, Bitcoins are considered legal. However, each country has its own definition of “legal”, as some simply state that Bitcoins are not “illegal” or that governments cannot create a tax regulation framework for Bitcoins or other cryptocurrencies. Moreover, some countries have declared Bitcoins legal, but are currently taking into account the idea of issuing laws that would prohibit Bitcoin transactions.
For instance, in the U.S., the government tax collection agency recognizes Bitcoins as taxable property but not as a currency, whereas Belarus acknowledges Bitcoin as a legal currency in the country.
- Bitcoins are under constant exposure to cyber attacks
Digital currencies are one of hackers’ favorite games, especially now, since Bitcoins have become more valuable. They have already been the target of a cyber-attack and things won’t likely change for the better in the future. For the same reason worldwide governments couldn’t find a coherent method of labeling Bitcoins since they are not tangible assets, digital hackers that steal cryptocurrencies can’t be punished.
- Bitcoin value is just too volatile
Few people (if any) could tell what is the true value of Bitcoins, if they are just a bubble or a good investment. Bitcoin trading is definitely not dedicated to those who are faint-hearted. By far, Bitcoin investments are for adventurous people who are willing to take risks. Bitcoins are doing pretty good right now, probably better than many could have thought.
However, since they were launched in 2009, their price has been extremely volatile. Bitcoins have gone from lower than $1, reaching to around $200 in 2015 and up to $ 18.000 – the current value.
- Prospect of being overtaken by competition anytime
Many believe Bitcoins are the currency of the future and that they are here to stay. It’s wiser that you don’t believe in everything you hear because these are just assumptions. Bitcoins would be easily forgotten in a few years if other cryptocurrencies become more popular, especially ones that won’t require any mining.
As we speak, there are over 20 cryptocurrencies on the digital market and their number is growing, so a scenario in which Bitcoins could be replaced is very plausible.
- Bitcoins as payment not accepted everywhere
Bitcoins are still too new; they have only been around for almost 9 years. Apart from the fact that people, companies and governments don’t exactly know how to deal and define Bitcoins, you can’t buy too many things with Bitcoins.
Several websites, particularly those that provide services, allow Bitcoin payments.
Yet, due to still unclear legal matters, not many companies accept Bitcoins as payment, but this will likely change in the future. So, it is a risk for the moment, but if Bitcoin frenzy will last, this will turn into a benefit.
Evade the risks of Bitcoins by using a VPN
Clearly, Bitcoin trading is a risky business. Nevertheless, nothing is too risky if you know how to apply a few wise tricks. Yes, you should do a thorough research, evaluate good practices in investments and monitor the trading market. After you’ve done all that and decide to take the leap, use a protection shield such as CyberGhost VPN.
CyberGhost will help you keep your investments safe and sound. Using the 256-bit encryption technology, CyberGhost VPN makes sure all your digital activities remain hidden, thus untraceable.
CyberGhost blocks online tracking and secures your connection even on WiFi networks.
All your sensitive data will be secured if you connect to CyberGhost each time you go online. Download CyberGhost VPN!