Know The Basic Disadvantages of Bitcoin

Of course, the Bitcoin software also has its faults. It is relatively new, and it is still open to all sorts of vulnerabilities. The question of volatility is the issue regarding Bitcoin exchange. The value of the Bitcoin is not as stable as compared to currencies and because of this issue; it can fluctuate drastically in a matter of days.

Merchants need to adjust the prices according to the value of Bitcoins. It can be likened to the stock market, and a user is in a way gambling his Bitcoins. A user must always be on top of everything and observe the Bitcoin exchange rate.

If a user wants to use his Bitcoins as a form of long-term investment, then factors such as hacking must be his utmost consideration. , and in case a hacking incident happens, the government cannot come in between the user and the Bitcoin bank.

In recent news, the first ever Bitcoin bank, Flexcoin, became a victim of hacking activities. The users lost all the Bitcoins that were placed in the hot wallet. By hot wallet, it means that the Bitcoins are available online and users can transact or do Bitcoin exchange with these Bitcoins put in the hot purse.

On the other hand, those Bitcoins that were placed in the cold wallet or storage were not stolen. This is because these Bitcoins are not online and the hackers were not able to access them.

The bad news is that the users cannot do anything about it. It is a lost investment, and there is no one to help them except themselves. The Bitcoin software is still at its advent stage, and there is still a lot to learn from all these hacking incidents.

There is news that even before Mt. Gox filed for bankruptcy, there were already reports of theft and hacking in the Bitcoin exchange. About seven hundred thousand worth of Bitcoins were already lost from theft and piracy. This figure is the one that is reported, but there are also speculations that other users may have lost Bitcoins, but they have not said it to the authorities because they know that the Bitcoins lost cannot be redeemed because of lack of a regulating body.

There is also the issue of malware. This is created to infiltrate the Bitcoin software and steal money from the Bitcoin wallets. There is about one hundred malware that was reported a year ago.

The Bitcoin exchange can also be a haven for the criminals. There is news that Bitcoins are being moved to funds criminal activities. It is also used in high-end gambling activities.