
Bitcoin is always in the news. There is always something about this cryptocurrency that is worth coming in the headlines. It is a digital currency that has changed the mind of people regarding the way of making transactions. You will be glad to know that a massive number of people are now investing in this digital currency, and no one wants to miss out on this great opportunity of owning bitcoins.
Bitcoin is an actual digital currency that offers so many benefits to its users. However, there are still some downsides of bitcoin that make this digital currency very risky. If you are a person who wants to invest in bitcoin but you are not sure, then this guide will help you in coming to the final decision.
On the other hand, if you are looking to invest in bitcoin, there are significant changes that you have heard about its benefits. In this article, you will read about the problems with bitcoin, so without wasting further time, let’s get straight to these points. For investing in bitcoin, you can consider the https://oilprofit.app platform.
It is not money
You need to know that bitcoin is not money. It doesn’t matter what the audience thinks of this digital currency, but it lacks the functioning of money. You should know that the three primary functions of money are a source of exchange, a store of value, and a component of the account. There are still a lot of goods and services which you can buy by using bitcoin. However, it is not accepted in the whole world as a means of making payments. There are a lot of bitcoin payment apps that get launched to promote the use of this digital currency. But the thing is that none of them help make the world’s daily transactions and facilitate payments.
Bitcoin doesn’t have the legal tender status, so it is not officially considered a means of payment. Therefore, you will need some digital device like a computer, laptop, or smartphone which has an internet connection for using bitcoin. It is the thing that makes it very unreal for the digital currency like bitcoin to become or take the place of money.
It is not a store of value.
You should know that only those things can become the store of liquid, be accepted globally, and have an enduring value. When we talk about cryptocurrencies like bitcoin, then they don’t contain any of such characteristics. It means that it will take very little time for these wallets to manipulate the market of this digital currency, which can result in considerable fluctuations in the price. The high volatility of bitcoin is the reason which makes it unsuitable for consideration as the store of value.
It has a fixed supply.
You should know that the maximum number of bitcoins is only 21 million. At the present time, there are already more than 18 million bitcoins in circulation. According to some of the predictions, the latest bitcoin mining will take place in the year 2040. Every digital currency is finite, and the speed of their uncertainty is not in control of anyone. The limitation of supply on bitcoin is the thing that makes it unsuitable to be considered as legal tender.
It is a market of speculators.
The supporters of bitcoin always say that it is a digital currency that is an investable asset. There is no denying that it is investible, but calling them an asset is not sure. In every financial asset, there is a kind of stream for income. Moreover, some of the assets have zero yielding value like the commodities, but the fact is that they are traded because they have some practical use. On the other hand, bitcoin doesn’t have an income stream, and its truth doesn’t have any practical use.
They are only priced and traded because of the speculation. It has value because we people think that it has value. When people stop thinking bitcoin has value, then the bitcoin will be of no value. It is why the price of this digital currency is vulnerable to considerable fluctuations in its price. It also brings up the second issue of bitcoin, which is the store of value.