What Are the Risks and Benefits of Using Bitcoin in 2019?
3 on What Are the Risks and Benefits of Using Bitcoin in 2019?6 min read
Like it is in every other venture, investing and trading on Bitcoin comes with its own fair share of risks, but don’t worry, the numerous opportunities involved thumps the risk. One of its major risks is its appeal to criminal, considering its anonymous nature. With it, criminals may be able to carry our coordinated crime activities, without being noticed. If you are willing to trade despite these risks, then why not? You can get all the numerous benefits that are offered by the technology. Let’s highlight some of the most popular benefits.
Bitcoin Cannot Be Traced: While this can count as a risk, it is also an immense benefit on its own. No government authority, or in fact anybody can trace your transaction to you. There are millions of anonymous transactions going on at every time, remember? So there’s absolutely no way anyone can go on to trace your particular transaction from the millions of transactions that are happening over the network, even if they know the exact minute when you are making the transaction. Furthermore, transactions cannot be reversed, so once payment has been made to you for your service or goods, the buyer cannot reverse their transactions, except you will accept to pay back. To a large extent, this reduces the risk of fraud.
The Transaction is Simple and Cheap: Remember we talked earlier how it is easy to own a Bitcoin wallet and without not cost? Of course, that stands as a very big plus for the network. Unlike the traditional payment system, where you are charged commission by banks for keeping your money or for helping you perform any transaction, you are not charged a single dine as commission. Furthermore, trade is very easy. As long as you have a simple knowledge of the operation of a computer, then you can go ahead to make trades and other transactions on the system.
The Network Offers Lower Risk of Inflation: The characteristics of traditional money that make it be controlled by a central authority makes the currencies liable to being affected by economic policies of the respective authorities. Some policies can shoot up inflation rates, while others may have the power to bring it down. A government of a country will always print money, and with the printing of too much money comes inflation. The purchasing power of currencies generally drop as the value of money continues to drop. Bitcoin operates in a different manner. There is no central authority to make state policies that will affect its distribution, hence, there is no risk of inflation in that instance. Furthermore, the system that produces Bitcoin has been made infinite, so there is no worry about the coins being exhausted.
Bitcoin is Portable: Paper currencies may bring some level of challenges when it comes to moving them in bulk because with more of the currencies come bigger weight. But with Bitcoin, you can make as many transactions as possible from your online wallet, without needing to physically carry the coins around.
The imposing of gain tax on cryptocurrencies have been the major reason why unfavorable speculations hit the online currency market, and of course, with such speculations came to the massive sale of Bitcoin by a lot of investors. Investors in the United States had to start to sell off their currencies for the purpose of paying off this imposed tax.
Investors have been informed that they have to pay taxes for all the massive gain they made in 2017, especially with Cryptocurrency being declared as assets. This move has prompted people to start selling off their investment quickly as a way to avoid taxes. Such rapid sales brought about a massive drop in the price of the currency.
Furthermore, crypto-analysts reported that another major reason why the price of cryptocurrencies dropped massively is that Google and other sites announced that they had banned ads and other activities related to Bitcoin on their websites. All these have contributed to the volatile nature of Bitcoin to cause a massive drop in its price.
However, we expect to see some surprises in 2019. Analysts have been given their opinion on how 2019 will look like for investors. We know Bitcoin and other cryptocurrencies to operate in ways that are really surprising. Experts predict that Bitcoin will see a gradual rise in price by 2019; Although we do not expect it to hit $20,000 again, we expect a massive rise from the present $4,000 it is pegged at. So, it there is a time to start developing some confidence in Bitcoin again, it is now!