What are the disadvantages of Bitcoin?
Disadvantages of Bitcoin:
- Price Volatility
There is no central authority governing Bitcoins, so if a large group of corporations decides to dump Bitcoins, their prices will drop drastically. When Elon Musk tweeted that Tesla will delist Bitcoins as a mode of payment, the price of Bitcoins dropped nearly 40% from the record high of $64,801 in April.
- Scams and frauds
The Bitcoin network is complex and not easy to understand for a common person. Anyone who lacks knowledge about cryptocurrency may fall for the Bitcoin investments scams such as fake websites, fake crypto exchanges, etc.
- No Refund
Once the transaction is executed on the blockchain, it cannot be reversed. So if you send Bitcoins to someone and there is a need for a refund, the receiver may not be able to refund the coins until and unless he decides to do so.
- Black market activity
International and national legal systems do not have the authority or proper regulations for Bitcoins. This is why Bitcoin is popular for criminal activities such as money laundering as its difficult to trace the bitcoin-related black market activities.
- Cyber hacking
Due to Bitcoin’s anonymous feature, hacking and illegal ransomware is very common to extort money from the victims. Cybercrime such as cryptojacking is also popular in which hacker hacks into a person’s system to mine cryptocurrency illegally and unknowingly.
- Wallets can be lost
If you lose your wallet’s private key or the hard drive crashes or the wallet files get corrupted, you can essentially lose your Bitcoins stored in the wallet. The coins stored in the wallet will be permanently orphaned and there is no way you can recover them.
- No Physical Form
Bitcoin is a non-physical currency so, in reality, they do not exist. If a merchant does not accept Bitcoins or other cryptocurrencies then it would always need to be converted to fiat currencies.
Despite all the drawbacks, Bitcoin has the potential to become the most used and valuable cryptocurrency. It gives the power of ownership to people which is not given by financial institutes or any banks. Also, allow the holders to make their own money-related decisions without any intermediaries. Bitcoin is also a great source to store value but there is no guarantee whether an unregulated currency will be accepted as a viable alternative to fiat currencies.
For all your Bitcoin-related quires please contact our team for assistance.