If you’re already familiar with cyber currency you might be wondering what the critique or support over the particular cyber currency called Bitcoin in this article will be about. However, what about the following cyber currencies: Ethereum, Fatcom, MaidSafe, or Ripple? By considering the vast spectrum of crypto currencies as a whole in addition to the more popular crypto currency called Bitcoin, a lot can be learned about how crypto currency acts as an investment vehicle altogether.
First of all, all crypto currencies require two elements: an internet-based dollar to crypto-currency exchange capability, and supply and demand principles such as are exhibited in a typical stock exchange.
These requirements for crypto currency to exist also exist as their primary weaknesses. In order to exchange your dollars for your desired crypto-currency, you must purchase them like you would purchase a stock: you’d have to purchase through a crypto-currency brokerage. Governments such as the US Government seem to already be taking measures towards controlling those crypto-currency brokerages such as in this final rule generated by the Department of the Treasury:
As we continue to see the use of crypto-currency demonized by the media as the tool of criminals and dark-web abusing menaces with headlines, “It’s a very good time to be a money launderer, and you can thank crypto-currencies,” from a major news outlet such as CNBS it brings into question the long-term value of crypto-currency. There’s no doubt that there’s a legitimate concern as to when governments will draw the line and start controlling a, ‘dangerous,’ element that has the potential to bypass their control.
If we’re considering crypto-currency as an investment vehicle, it would be totally irresponsible not to worry that the use of it is demonized by major media outlets all while controlling governments are looming over them in such a way that threatens any investment in dollars you make on a crypto-currency.
However, unique to cyber-systems, crypto-currency is also vulnerably to denial-of-service based attacks that can be perpetrated by small groups of anonymous individuals, scamming on the part of brokers, and denial-of-service due to insufficient hardware to support unusually popular trading hours. All of the above have caused undue grief to many, and is a considerable complaint because of the second required elements of a crypto currency: supply and demand principles.
The addition of malicious denial-of-service attacks to crypto-currency networks as well as insufficient hardware has causing denial-of-service has created enormous volatility in the price of crypto-currencies when service is denied. And when this service is denied and the price is falling, you cannot save your hard earned dollars that you’ve put invested into crypto-currency. A visit to various Twitter threads of crypto-currency brokers will confirm that horror for you. This is besides the questionable practice of crypto-currency brokers being accused of scamming in the form of banning user’s accounts after they’ve made purchases.
In fact, as a perfect example for both major weakness of crypto-currencies previously stated, upon following a link to a formally popular Bitcoin brokerage named BTCe, I was greeted to the site with the following message: “THE DOMAIN FOR BTCe HAS BEEN SEIZED. Pursuant to a seizure warrant issued by the United States District Court for the District of New under the authority of 18 U.S.C…”
The link to see it yourself is here: https://btc-e.com/index.html .
With risks like the above a growing reality, denial-of-service a continual reality, and denial to exchange dollars to crypto-currency a growing possibility, crypto-currency is much closer to gambling than it is to investing. Crypto-currency may be a sexy, new, fast-paced, high risk investment, but if you are serious about investing for your future and making returns on your hard earned money, then crypto-currency is a bad investment for you.