Should People Use Bitcoin?

It is possible to acquire buy bitcoin instantly without being a “minor”, which are members of the network. Online platforms are the intermediary between the bitcoin network and the Internet user who wants to buy or sell bitcoins for legal tender. But to use bitcoins without going through these platforms, people have to install the software and the database that goes with it. It is also necessary to secure bitcoins on a stored online network to protect against theft or loss. These are constraints that require a minimum amount of computer knowledge, which makes this currency not yet very accessible to the general public.

By limiting the maximum amount of bitcoins that can be created and by changing the rate of creation over time, designers organized the shortage of this virtual currency and, thus, conferred its highly speculative character. Advantages, however, are numerous. Bitcoin makes it possible to carry out person-to-person transactions all over the world, without the use of an intermediary. This involves much lower transaction costs than Visa, Mastercard or Paypal. However, the deadlines are longer. But most importantly, transactions are anonymous.

What are the risks of this currency? Its main problem is its extreme volatility. Until February 2001, the bitcoin was worth less than a dollar. During the Cypriot crisis in April 2013, it reached $230 per coin and was considered a safe haven. But a denial-of-service computer attack of a main bitcoin trading site caused the first significant drop. Then the price resumed its rise before suddenly collapsing when the FBI closed in on an anonymous online sales platform using the bitcoin on October 2, 2013, mainly because the site was largely dedicated to drug and weapons trafficking. Since then, the worth has exceeded the $1,000/per bitcoin mark.

Another major problem is that bitcoin holders can only sell them if other users wish to acquire them. Thus, the system can, at any time, collapse when investors want to relinquish their positions. Despite this, some traders still accept payments in bitcoins. The bitcoin currently operates outside a defined legal framework. But this could soon change, as these transactions are currently beyond the control and taxation of the states. However, if the issuance of a virtual currency can be regulated, its conversion into a legal currency requires, on the other hand, the obtaining of certain authorizations.