Every investment has inherent risks, and it’s the same with Bitcoin and cryptocurrency in general.
Before you dive in and spend your hard-earned money, here are 5 risks you should know about.
Bitcoin is Volatile
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In terms of volatility Bitcoin ranks high up on the list. During its life Bitcoin went up as much as $6,000-plus and dropped to mere hundreds. If you’re okay with this kind of ceilings and dips then you can go ahead and visit an exchange and get your investment.
Bitcoin’s volatility is a double-edged sword. You can either gain a lot of money or lose a lot, depending on when you invested and when you cashed out. That said, you should be careful and always keep an eye on when it might rise exponentially.
There are Scams and Theft Running Around
Because Bitcoin rose to popularity opportunists rode on the waves and began creating scams to make people lose their crypto coins.
Unlike stock trading Bitcoin trading has more potential for theft and malicious attacks, although the asset is actually secure and tamper-proof in itself.
Since Bitcoin exists on the internet there’s a great potential for it to be hacked and stolen. Bitcoin exchanges are online platforms and can be hacked as well. The problem is that these websites usually store their users’ assets, and one quick code or malware can bring it down or make the assets disappear.
You Can’t Use It Like Fiat Currency
The risk involved with buying Bitcoin is that it will most likely remain a digital asset. Most Bitcoin buyers get it because they want its value to rise so they could sell at a profit, but it wasn’t the initial design.
Bitcoin is a cryptocurrency that was designed to be exchanged by people the world over. Put it out of the digital world, however and you’ll be limited to a few dozen shops and websites that accept it as a method of payment.
This risk will be lesser the more Bitcoin stays though. Today, more and more physical stores and brands are recognizing Bitcoin’s value and are taking the steps to accept Bitcoin from their customers.
Bitcoin is Not Regulated
The reason why Bitcoin doesn’t have a regulation is because it’s made that way. Cryptocurrencies are inherently ‘decentralized’, which means it runs through a network of independent computers and not one single entity or person has control over the asset.
This risk is a boon to some, because Bitcoin transactions are anonymous and difficult to trace. Furthermore, transaction speed is lightning quick and there’s virtually no fee to do so. However, for some people who want their investment to be as secure as possible they’d skirt around owning Bitcoin and other cryptocurrencies.
Bitcoin is Very Young
In terms of technology Bitcoin is very new. It’s shaping up to be something that will stay, but it has a lot of potential and can affect the way we pay for goods and services in the future.
To get help in Bitcoin investment you can visit the bitcoin code website and register. It’s full of informative content and shows you how to make a profit.