CRYPTOCURRENCY HAZARDS AND RISKS
Although Bitcoin has these advantages, it does not mean that it is independent of threats or risks. For example (BANetBitcoin, 2016):
Degree of acceptance: there is still a large part of the world population that is unaware of Bitcoin usage. Although many businesses accept cryptocurrency payments in order to benefit from the aforementioned advantages, their numbers are relatively small.
Variability: the volume of Bitcoin exchanged as well as the businesses that use them is small compared to what it could be. For this reason, small changes in the markets or business activities can directly affect the price of Bitcoin.
Continuous evolution: the software that supports the use of Bitcoin is constantly evolving as it has features that need improvement. New features, benefits, and services are still being developed that are not yet available to everyone. Also, many businesses do not provide any insurance. In fact, Bitcoin is still maturing. Alfidi (2016) also states that Bitcoin allows fraud and other criminal activity, due to the anonymity feature it carries. Conventional currencies are actually subject to money laundering and counterfeiting. Bitcoin magnifies these risks because it can only be exchanged anonymously and dominates the dark networks known for drug trafficking. Law enforcement efforts to shut down these networks will, however, end any economic operator’s ability to trade in Bitcoin even for legitimate reasons. This is because when the network is down, users’ available Bitcoin disappears. A conventional currency, however, does not work this way in real transactions. Banks and brokerage firms have backups of their activities when they are out of service. Stock markets and central banks maintain counterparty records. These mechanisms lack the anonymity of Bitcoin, but offset the resilience and credibility required in transactions.
In addition to the above important issues that pose serious financial threats to users, there are also more simple and practical problems. For example, Bitcoin cannot, at least yet, be made for simple daily purchases, such as in supermarkets, grocery stores, cafes and so on, since they are not physical, and also – despite the growth of Bitcoin accepting organizations – these are not acceptable by everyone (Petrich, 2017).
CRYPTOCURRENCY HAZARDS AND RISKS
CRYPTOCURRENCY HAZARDS AND RISKS
CRYPTOCURRENCY HAZARDS AND RISKS
CRYPTOCURRENCY HAZARDS AND RISKS
CRYPTOCURRENCY HAZARDS AND RISKS