Although the cryptocurrency revolution brought about a total change by which one views currency and the power that digital currency can harness, it does have some very critical drawbacks, and these should not be taken lightly.
Illegal in many countries
One of the main benefits of using the bitcoin was that people were able to transfer funds digitally pseudonymously. But, some people took advantage of this and ensured anonymity while making transactions on online stores like Silk Road to purchase and sell illegal drugs.
Due to the emergence of such reports, governments of various countries feared that the bitcoin paved the way for many criminal activities. A currency that was decentralised and lacked any regulation was quite worrisome.
“The bitcoin needs to be understood as a tool and a useful tool used by everyone who finds it useful so just as bad people use the cell phone in the car bad people are going to use bitcoin and people shouldn’t fear that or worry about that.” – Eric Voorhees, CEO, Coinapult
Cryptocurrency can be hacked into
Contrary to popular beliefs, Satoshi’s bitcoin can be easily hacked via the following:
Keyloggers can be installed into your system by downloading email attachments that wraps a malicious executable code, visiting websites that will automatically install the keylogger software or vulnerable USB sticks connected to your device.
This keylogging software will sneakily copy all your passwords, pin numbers that will give easy access to hackers to your cryptocurrency.
Bitcoin phishing websites
Many websites claim to send out legit bitcoins but in reality, are just tricking the visitors to enter their passwords and private keys.
Unsafe cryptocurrency wallets
Also, people store their crypto-money in wallets that do not use secure algorithms to safeguard it against hackers. Check out this article that illustrates the security issues with cryptocurrency wallets.
This further worsens cryptocurrency’s cause because its existence highly relies on investors who see its potential. When they analyse such risks associated with investing in cryptocurrency, they hesitate to invest further.
Its fluctuating value
When investors restrain from investing in cryptocurrency, its value decreases. Also, predicting the value of the cryptocurrency can be quite tough. There is a new study by which bitcoin’s price can be forecasted by the use of deep learning algorithms.
When people see this instability in the cryptocurrency’s value, they refrain from investing in it which further decreases its value.
Featured image by Andre Francois
Certified ethical hacker. Writer at Candid.Technology. Truly believe that to know everything is to know that you know nothing.