Risks associated with earning from Bitcoin / what to consider before thinking of earning with bitcoin
Everybody agrees that the Bitcoin is widely the most successful currency in the world today although some countries are not in support of it. However, the success of Bitcoin is not but without limitations. You may be excessively concerned with earning from Bitcoin, putting all your energy and efforts into the business, it is needful for you to know the risks associated.
Although earlier this year 2019, the bitcoin market capitalization just exceeded 70% of the its market since 2017. Bitcoin in December 2017 was around 20,000 dollars USD. Only a week later, the price of 1 1BTC reduced to about 14,626 dollars USD only. Bitcoin prices is never stable, and this has an impending impact on sellers (most especially, if you are a Bitcoin Holder). You can imagine investing a fortune on Bitcoin only for you to have a fall in the value for your Bitcoin. The market for Bitcoin is unpredictable hence making the return on investment not feasible at time.
This is very rampant in the crypto market. Don’t forget that Bitcoin currency is technology-based, hence, this creates high loopholes for cyberattacks. Even though you earn so much Bitcoin s. Your wallet isn’t free from attacks and theft. From a single attack, all Bitcoin s in a user’s account can be stolen. And as it is, tracing and retrieving lost or stolen Bitcoin s can be extremely difficult. According to a report, many miners often report loss of investments on mining and exchanges. Also, during exchanges such as buying and selling Bitcoin s, theft is very rampant. Theft has gone in smarter ways such that even if you have protection towards your wallet, you can still be defrauded.
Essentially, every new Bitcoin s are created via solving computational blocks anytime there is an online exchange. Hence, a block might be mined and hid by a mining pool, thereby making some members lose their investment block withholding is a serious issue in the mining business as only a selected few benefit and others are reap off of their Bitcoin s when blocks are withheld.
Constraints in Bitcoin usage
This is problem that may hamper your Bitcoin earning. Although, it is a step towards exchange, it is not widely acceptable. For example, while there are a few companies and countries that accept Bitcoin for exchange, many do not. And this possess a serious challenge to Bitcoin use. Also, attached to this problem is the fact that to use Bitcoin in some places, you would need to convert to cash and cash-conversion has its problems such as theft as well. Some online stores such as Overstock and Monoprix currently take Bitcoin as a form of payment, but some companies still do not recognize Bitcoin as a legal tender for exchange.
Reliance on technology
We can always hope that Bitcoin will be like paper money which is not technology-dependent. Bitcoin is reliant on technology. This is showcased in the fact that Bitcoin s are mined digitally, exchanged through smart wallet and kept using several systems. Virtually everything that concerns Bitcoin is technology oriented. The question we should be concerned with is that if technology is removed, what will be the future of Bitcoin and cryptocurrency in general. With full technology reliance, the issue still remains the same as users are prone to cyberattacks, fraud and so on. Even attacks can shut down the entire system leading to high loss of investments for investors.
It is advisable to trade bitcoin with trading software
while you opine to earn money on Bitcoin, you should guard yourself with the underlying factors and issues that may challenge Bitcoin earning.