Undoubtedly, the digital currency Bitcoin has been a great success in terms of financial investment. This type of currency without a real central bank currently holds the daily lives of many people willing to invest their money on the Internet. Provided that Bitcoin can offer various benefits, it is also linked to obvious risks that can be discouraging. Here are the 5 dangers to think about if you plan to invest in Bitcoin.
1. Unstable currency
As Central bank does not regulate Bitcoin, investors face extreme instability. There is a risk that can present considerable dangers to the entire investment. Indeed, it is not possible to accurately estimate the price of Bitcoin one year to another. With this money on the Net, the investor can gain or lose a few hours only half of his invested capital. The first Bitcoin economic crisis was in 2013, which rose to over 266 U.S dollars to drop to 125 U.S dollars by the end of the year.
2. Unsafe money
The virtual currency Bitcoin is a unique international currency, which can be a more profitable investment in case of great economic weakness. The exchange is done discreetly between individuals, without needs to pay for fees, taxes and VAT. In addition, capital is not guaranteed since these virtual currencies are not issued by a central bank. Unlike fixed investment, where any amount saved is normally guaranteed by the State, the investor in Bitcoin can lose his money at any time.
3. Limited Use
While this is possible, there are few commercial sites that accept Bitcoin as payment. At any time, the investor can spend its Bitcoins online, especially by making virtual games such as online poker and slot machines. By cons, to buy a car, real estate or clothes, dealers and shopkeepers rarely trust in Bitcoin as a payment method.
4. Cybercrime
The virtuality of Bitcoin can also be translated as a threat to the investor. From the time the investment is materialized by virtual numbers, it can become a simple prey for cyber-criminals. For example, the large Japanese market Bitcoin MtGox has been hacked by “cybermalfrats” these last years. The company has lost about 750,000 Bitcoins since then.
5. Danger to the State
According to economists, investment in Bitcoin is decentralized and can even be dangerous to the democratic and fiscal levels. This free exchange without charge or tax can be converted into a large fluctuation. For some countries, the tax system is based on the consumption and income of the population through the collection of taxes and VAT. The circulation of the virtual currency Bitcoin will therefore disrupt cash flow and citizens’ incomes. It can also disturb the tax levies necessary for the overall state funding.
