Bitcoins are a type of cryptocurrency invented in 2008 and released as an open-source software. It is the first decentralised digital currency. They have become a popular mode of currency transaction over the years. The article looks at the disadvantages of bitcoins.
As bitcoins are a popular cryptocurrency, their liquidity rates are high. Because of their demand, their value is susceptible to increase or decrease over a span of time. In other words, bitcoins are highly volatile as a currency. It may serve as an advantage for short-term investments but on the longer run, it cannot be used as a safe mode of money exchange.
The biggest concern that experts have with bitcoins is that there can be security breaches. With its popularity, it attracts a larger number of fraudsters and bitcoin-related schemes. Since it is an anonymous platform with a weak redressal option, it is a hotbed for financial crimes. Additionally, wallets can be corrupted with a virus or it can even get lost. This would be impossible to recover later.
Bitcoins are undoubtedly risky. And one of the reasons is that there are no options to get a refund. In case a user gets themselves embroiled in a transaction fraud, they do not have any redressal to settle the issue. The laws in relation to bitcoin are fairly niche and sketchy. Ultimately, users are responsible for their own money.
We rely on technology for everything but we forget that it is afterall, a machine. They are bound to glitch, make mistakes, and even breakdown sometimes. Similarly, the bitcoin system could also have technical flaws that can negatively impact a user or a heavy investor.
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Another concern that people have in regard to bitcoins is that it has significant environmental issues. Bitcoin mining consumes huge amounts of electricity. And high energy production has a detrimental effect on the already overburdened environment.