It comes as no surprise at all that technology has transformed our lives for the better, and is continuously doing so through countless means of innovation. The real question is – can we really trust each and every digital phenomenon bestowed upon us? How secure are these channels?
Then there was Bitcoin – digital currency also known as cryptocurrency, introduced in 2009.
According to the Accounting firm Price Water house Cooper LL, Bitcoin has a current market value of around $8 billion dollars, and up to 80 000 transactions occurring daily in the US.
However, it hasn’t been all smooth sailing for the “bitcoin phenomenon”, Mt. Gox – a Tokyo Bitcoin exchange, filed for bankruptcy last month after the company claimed that half a billion dollars was stolen by hackers.
South Africa, will be one of the first African countries that will have bitcoin atms installed. The bitcoin ATMs will be used for depositing funds in digital wallets, and for extracting funds from digital wallets and transferring them into hard cash ( in local currency). How secure are we?
Pros & Cons of Bitcoin:
- Pros of bitcoin include
-instant free registration, no id checks
-lower transaction fees, as there is no commercial banks involved
-no authority exists to report to tax etc. because bitcoin is not an official currency
-available 24/7 in demand
-increased anonymity and control over privacy
Bitcoins can be easily lost and are untraceable: There is no form of security or protection for people whose “digital wallets” are hacked. There is no way of recovering your Bitcoins. Read more here about securing your digital wallet.
Bitcoin is not backed by any central bank, government or physical assets.
Instant transactions are barely secure: a transaction can be made within seconds, but is cleared in 10 minutes. Criminals can try and reverse payments during that time. Each confirmation exponentially decreases risks of reversed transactions.
Too volatile: Bitcoin price can increase or decrease in a short space of time due to its young economy, or even illiquid markets. Read more here.
However, we need to also keep in mind that Bitcoin is merely another way of making purchases online besides credit cards, and credits have been cloned to death. Credit cards also require you to distribute your personal information to the merchant, whereas Bitcoin doesn’t.
For now, we live on the speculative value of bitcoin. So the question still lingers: To bitcoin OR not to bitcoin? Only time will tell the bitcoin tale.
This post was contributed by Tina Nakanyika