All cryptocurrencies are on fire from last 1 year. Some of them like Litecoin have even doubled investors wealth in just a week. Do not get surprised that the most popular currency, Bitcoin has surged to 2000% in just 1 year. This is a mammoth return on any asset class. But do you think such gains are justified enough and do everyone knows well about these cryptocurrencies. In this post, you will know the dirty secrets of Bitcoin currency.
1.BITCOIN mining is causing power outrage:
According to Digiconomist, the amount of electricity used to mine Bitcoin all over the world is equivalent to Denmark, Serbia, Oman and Morocco electricity consumption. Bitcoin mining is essential for carrying out its transactions, therefore if Bitcoin becomes more popular then the demand for electricity will also increase. For the countries like China, which is heavily depended on coal-fired powerhouses, the high energy consumption of Bitcoin is leading to high carbon footprint which finally is damaging the environment. If the same growth rate of Bitcoin continues over a couple of years, then it will consume all worlds electricity by Feb 2020.
2. BITCOIN Transaction cannot be reversed
Bitcoin transactions are carried out by its miners. When a transaction is successful then its information is added to the block and attached to the blockchain. A blockchain is a shared public ledger on which entire Bitcoin relies. Therefore once the block has been attached to the blockchain, it cannot be reverted back. So if you or someone else accidentally carried out a transaction from your wallet then it is impossible to reverse it.
3. No Security against any fraud activity
As said earlier, any transaction which is carried out on Bitcoin willingly or as fraud, could not be reversed. There is another issue that all the transaction are carried out using a Bitcoin address which is not directly linked to a person or entity. However, a person’s identity could be associated with Bitcoin address through another means. It is very much necessary that we should double check the Bitcoin address before paying to anybody.
4. If you Lost your private key, Forget your money
Bitcoin wallets keep a secret piece of information known as the private key. This private key is used to sign the transaction which provides a mathematical proof of the owner’s identity. So if you have lost your key, you can never prove your identity while carrying out payment. Even if you forget the key, there is no one who can help you to recover it and your Bitcoin become unspendable.
5. Any harsh rule from RBI (Government) can lead to its collapse
The government of India has declared BITCON as not a legal tender. Therefore you cannot do any transaction as a merchant or seller using Bitcoin in India. At the same time buying Bitcoin as an investment is not illegal yet. But there is a lot of uncertainty from the Government regarding Bitcoin. If RBI takes any strict action against usage of Bitcoin then obviously future of Bitcoin will be jeopardized for India Bitcoin investors. The hard earned money of the investors in this cryptocurrency is in hands of RBI.
Currently, Bitcoin is most popular cryptocurrency in the world and account for more than 60% of all cryptocurrencies.