Although many people have predicted that Bitcoin, a decentralized cryptocurrency without a central bank to oversee it, is doomed to failure, it is still going strong. Sure, cryptocurrencies might be prone to thefts by the hackers, but despite all its deficiencies, Bitcoin is not losing on its popularity. Some of the countries have even passed regulations to influence those trends.
Why is Bitcoin so popular?
The popularity of Bitcoin stems from the fact that it skips the traditional banking channels. Every transaction does not require any intermediaries – instead, the funds are transferred directly from the buyer to the seller. It means that everything is done anonymously.
Okay, but why are so many people using it?
The importance of anonymity
The anonymity of its users allows them to buy things which are illegal in their countries, like drugs or guns. You can even gamble online on websites like bitcasino.io, using your hard-mined Bitcoins, instead of real money. People who live in non-democratic countries might want to avoid their government knowing about every purchase they make. In such countries, a bank can freeze your account, making it impossible to continue with your life. There’s no such problem with Bitcoin – it isn’t regulated by the government or a central bank.
Even though cryptocurrencies are known to be volatile – often unexpectedly going up, and down, Bitcoin is probably the most stable cryptocurrency. That’s why in the countries where the national currency is prone to sudden changes and hyperinflation, internet-savvy people feel safer relying on this cryptocurrency, than a currency that is regulated by professional institutions. Still, we are talking only about the most extreme cases, like Venezuela, South Sudan, or Zimbabwe. Bitcoin is nowhere close to being as stable as the majority of the world’s fiat currencies.
Distrust of banks
The fact that fiat currencies are controlled by central banks makes them less likely to change their value quickly. It doesn’t mean, though, that it makes people feel perfectly safe either. Many people distrust financial institutions, and their suspiciousness is not baseless. The financial crisis of 2007-08 has shown that banks risk the life savings of millions of people, and when something goes wrong, they prioritize saving their own skin. That’s why people are eager to try alternative methods that sure, might be less secure, but which aren’t controlled by a corrupt elite. Though the threat of the hackers stealing your digital currency certainly exists, the security measures are constantly improving, which means that in the far future, it could become safer than fiat currencies.
Although saying that Bitcoin is safer than widely accepted currencies would be wrong, it faces similar challenges as real currencies. The thefts by hackers of the cryptocurrency that is unsecured on the computers are not rare. Just because individual people do not take any security measures, it doesn’t mean that the entire system is unsafe. After hearing a story about pick pocketing you don’t think “cash is the worst, it should be banned”. Yes, there are people who are willing to try every method to take the money you’ve earned (or mined), but it means that you need to be careful, and f.e. use digital wallets. The banks are not immune to the actions of the hackers either, though it must be noted that cryptocurrencies are much more frequently targeted by hackers.
Unfortunately, the same does not apply to most of the cryptocurrencies. Before you decide to try your luck with others, you should do comprehensive online research. As a general rule, it is best to stick to the most popular cryptocurrencies – they offer better safety.
The legal status of Bitcoin
The legality of Bitcoin varies in different countries, though in most regions, they are legal, though some restrictions are placed on them. The businesses that deal with bitcoins are usually required to enforce an anti-money laundering program. Japan, South Korea, Belarus, and Australia are among those that have gone one step further – they are actively inviting cryptocurrency companies to do business on their soil. Sure, there might be some security threats, but if cryptocurrencies are here to stay, it’s better to incorporate them into the system. Others, like Bolivia or Ecuador, have issued a ban on cryptocurrencies. Even if Bitcoin becomes safer than it is currently, it isn’t likely to replace other currencies, though it is impossible to predict what will happen in the far future.
What happens next?
Although many people use Bitcoin mainly to order drugs on the internet, it can be so much more than that. Although the security threat does certainly exist, there are things, like using a digital wallet that could increase the safety of the users dramatically. Despite its deficiencies, Bitcoin has proven to be surprisingly enduring. And it seems that it won’t be disappearing anytime soon.