Bitcoin is word the majority of avid internet users has come to know, but few of us have come to truly understand. Bitcoin is a decentralized digital currency that works without a bank. You may have noticed from the many headlines over the latter part of 2014; Bitcoin is steadily increasing in value and some people have made A LOT of money from it. But….how safe is it. Hello and welcome back to Life’s Biggest Questions…I am Rebecca Felgate and today I am asking: Is Bitcoin Safe to Invest In? Before I get right into the nitty gritty details of this video, I want to remind you to leave thumbs up on videos you like and to leave comments so we can continue our discussion. Also, to all of you who are new here, please do feel free to go ahead and subscribe to our channel.
Bitcoin was established in 2009 and allows people around the world to trade via a cryptocurrency. The creator of Bitcoin goes by the name of Satoshi Nakamoto, but of course, that is a pseudonym and nobody knows who that person actually as. Initially, people were sketchy about Bitcoin, possibly due to its lack of an accountable creator, and largely due to the link between cryptocurrencies and drug purchases on the dark web. However, the world has changed since 2009, with more and more people seeing the benefits of a paperless, nonphysical money system as opposed to fractional reserve banking.
Now, over 100,000 merchants accept Bitcoin as a form of payment. These days, the value of one bitcoin is skirting around the 17,000 dollar mark – at the end of 2013, a bitcoin was worth 1000 dollars, and at the beginning of 2011, it was worth just a dollar. With these kinds of highs…a lot of people are interested in investing… but just how safe is it? – At this point I just want to make it clear that I am in no way a crypto expert or financial analyst, I am just giving you some factual highlights from hours of research on the topic. So…. In many ways, Bitcoin is safer than placing your money in a bank or building society.
For one thing, banks are notoriously corrupt, we have seen numerous banking crises and meltdowns thing. Bitcoins are in some ways more secure than cash too; you cannot forge a bitcoin like you can bank notes. Similarly, unless you give someone your private key password to your bitcoin wallet, it is pretty difficult for someone to steal your money. Also, with the process of mining, public ledgers of all bitcoin transations are created…which means there is a digital record of every payment. However, there are a few issues with the Cryptocurrency that are worth noting at this stage in the game. One of the problems with Bitcoin is the hype. A lot of people are buying into the currency for some kind of hipster street cred validation, which is a terrible reason to invest in something.
The currency hasn’t yet stabalized, which is why we are seeing such huge rises and falls in the value over the past few months. With such wild swings, it is difficult to affix a goods to currency value, making trading with bitcoin, at the moment, anyway…a slight risk. People are also feasibly concerned that the inflation bubble will burst, leaving investors who joined at, say , 15 thousand dollars to the bitcoin, out of pocket If the value crashes back down to its earlier US dollar exchange rate. The other issue with Bitcoin is that it is stored in online wallets. These wallets have pin numbers and if you forget that pin number, you cannot access your money. Also, you cannot reverse a transaction. If you send your money to the wrong person, you can’t get it back. Banks have safeguards for wrong payments, but Bitcoin doesn’t. There is no buyer protection.
The other potential risk when it comes to Bitcoin is that governments are suspicious of it, partly due to its chequered history with the drugs market and partly because they’re suspicious of tax evasion. Bitcoin is currently illegal in Iceland, Russia, China and is a huge grey area in the United Arab Emirates. There are economists who have better understandings of crypto than I do, but so far as I see it, Bitcoin has its pros and cons…its areas of safety and its areas of risk. Right now, things certainly seem hot for bitcoin, and as we move forward into the future, I would imagine a cashless world to be a beneficial one…however the concept of Cyrpto needs to become a bit more tangible for it to truly take off.
Do any of you guys have a bitcoin? What do you think? Can you help continue the debate in the comments section below? What do the rest of you think? Are you interested in investing? Let me know…as honesty, I would love to get a sense of what people think on this topic. For now, that’s all I have…I am your host Rebecca Felgate, please do leave a thumbs up on this video and click on the notification bell to be the first to hear a big answer. I’ll catch you in the next video, but for now stay curious, stay alert, and never ever stop questioning.
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