Weaknesses of bitcoin as a currency you should know

Extreme volatility

Volatility is the top reason why many investors are still scared of making a step to invest in bitcoins. Profit making is essential and it determines the kind if investing decisions that you should make. Investing in bitcoin seems yet more of an idea than reality however there is a lot of support from the public to ensure that crypto currency is recognized as an official means of transaction. The value of the product can be at the peak at one time and then reduce when the demand of the currency reduces as explained at It is this volatility which should not be associated with currency should one be sorting after stability. Because bitcoin is volatile, it is always wise to diversify your portfolio and consider other forms of alternative investment funds aside from bitcoin.

Not tangible

A lot of people are used to seeing their money when using it. Plastic money is the money you spend via the debit and credit cards. You should know that the intangibility of the bitcoin money raises questions on whether it is real money or not. What are the parameters that make currencies legal? Is bitcoin money a service or a product? Before being considered a currency, there are still a lot of growth stages that it has to undergo before getting the approval that is needed.

Do not invest before researching

Research is an important aspect of learning that can help you prepare for this currency before you invest in it. There are lots of unclear issues you need to learn concerning bitcoin and other forms of crypto currency before you part with your lifelong savings to purchase this digital form of currency. Most states are still hesitant to approve the use of the bitcoin as a legal form of currency and advice citizens to be rather cautious on how they handle this form of currency. You should in fact find out the risks there are to using the currency rather than wasting your time on making an investment on a Cryptocurrency which is best known for peer to peer transactions. It is only proper you treat cautiously to mitigate the chances of investing and going at a loss.

Unregulated form of currency

There lacks a central body or authority which can be used in the control and distribution of bitcoin as a currency. This makes it hard for people to understand whether it is legal or not. It is also among the concerns that limit the number of investments that people make today on crypto currency. The lack of a body to control the distribution of the currency means that any financial investigations could hit a wall should the wallet IDs that are used not match any persona details. It therefore becomes challenging even for you to get help should you experience fraudulent activities. This is the reason the currency experiences a lot of use by criminals since tracing the transactions can be hard when you do not know the wallet IDs of the parties involved in the transaction. The lack of central authority also increases the Ponzi schemes which are set by scammers in this industry knowing there is no involvement of authorities in the same.

Legality issues in many states

The legality of crypto currencies is yet to be ascertained as they are neither encouraged nor discouraged by authorities. For a long time debates have been around on whether the uses of crypto currencies like bitcoins should be made legal. While a few countries have seen it fit to legalize this form of payment, it remains undecided for many countries which discourage their citizens from transacting with these types of digital currencies. You should also know that dealing with this type of currency is highly discouraged by financial institutions.

Vulnerable to criminal and fraudulent acts

Bitcoins cannot be traced by legal authorities unless they have access to the block chain system of management. Conducting investigation for payments made via bitcoins or other forms Cryptocurrency can be hard for local authorities. This makes crypto currencies ideal options to use in criminal activities and payments considering how hard investigations can be if no personal details or addresses are attached to the wallet ID. In case you are a victim of such criminal activities there can be no help administered to you which increases the chance of criminal activities

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