Important things to consider before buying Bitcoin
When the central bank in Cyprus friels bank accounts and limiting the amount of cash that can be withdrawn from a bank account, it creates a large fascinated figure throughout the world. If consumers do not have access to money, how can they buy and sell things needed to continue in our modern world? The reality is that they cannot be consumers all over the world start looking for safer alternatives for Fiat currencies. Fiat’s currency is a currency that does not have real value than what the government has gives it.
Consumers are looking for ways to save their purchasing power to protect themselves from having a bank account frozen for an unlimited period of time. Many people start trading in Bitcoin. This is the currency of the Crypto which means it is not easily faked but before anyone starting to buy in this new currency will be wise to understand the risk.
Bitcoin is not issued by the central bank or the government so that there is no accountability at all. If you deal with dollars, euros or pounds you have a guarantee that the government behind it will respect the debt while Bitcoin does not guarantee anything. The fact that no one really knows who made this currency so there is no way to find out whether it can be stolen directly from under our eyes.
Bitcoin is stored in a digital wallet that can be encrypted on your computer. Even though this must provide a sense of security if your computer loses your bitcoin is also gone. It’s not like a credit card where you can get a replacement and continue as it happens.
While the security of this currency is worries so far the biggest concern is that value. The values perceived from Bitcoin can change in a moment and unlike Fiat currencies supported by hard assets owned by a country if the Bitcoin value goes down, you have no value at all.
There are several exchanges around the world who sell and buy Bitcoin, but you can’t buy them thinking they will rise in value. They are digital commodities that some people will be classified as “Fad”. Tomorrow it can lose all the real values and never recover.
So for risk recap, you don’t have real security with Bitcoin because they are not provided by the government. The value if it is very volatile and can be reduced to zero in the heartbeat and the simple fact that the currency has just been there for several years shows it is not proven to be reliable.
If you are looking for ways to preserve the value then precious metals such as gold, silver and platinum may be more useful because they have been used for centuries as an exchange media.