Most financial experts say paper money as we know it is bound to undergo significant changes in the future. Some see our future as a cashless society whose every move can be tracked by your account transactions. Some countries such as Sweden, Norway, and Denmark use cash less than 7% of the time and have goals to be completely cashless in the near future. While going cashless help reduce crimes like counterfeiting, money laundering, and tax evasion other forms of digital currency have replaced it.
Cryptocurrencies such as Bitcoin are hard to trace back to real people because the only thing announced on the blockchain are account numbers.
Transactions are quick, anonymous, and Bitcoin always seems to be increasing in value. the downside is the currency isn’t backed by anything if you accidentally delete your wallet or your bitcoins get stolen it’s gone forever.
History of Crypto
Bitcoin is the first and most famous cryptocurrency that exploded in late 2013 when the price per Bitcoin exceeded $1200. There are a couple of ways to make money from Bitcoin. As you probably guessed some people buy Bitcoin and hope it appreciates in value. Other people (called miners) process transactions on the blockchain and get paid for it. Some people steal Bitcoins. In August 2016, the largest Bitcoin exchange Bitfinex got hacked and 119,756 bitcoin (roughly the equivalent of $72 million USD) were stolen by an attacker who got access to customers private keys and moved all the money into their account. As mentioned earlier all transactions are final, so there was no way to reverse this.
Is cryptocurrency really the future of money? If not there has to be a way to turn your Bitcoins into cash. Some sites such as Coinbase and Circle allow you to liquidate your Cryptocurrency. The downside to these services is you have to verify your identity.
Other sites like Localbitcoin let you sell you Bitcoin without having to verify your identity.
Question: Because Cryptocurrency isn’t backed by anything except itself do you think it’s a safe investment? Why or Why not? Leave your comment below.