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Hi guys, as you all know technology has been advancing rapidly and solving problems in every area of life. Bitcoin is the most popular form of cryptocurrency that enables digital transactions between two parties without the need of an intermediary, It is a decentralized network of computers that stores transactions in a ledger, using a blockchain system. The economic power which lies with the governments and financial institutions is at stake which has made them cautious of cryptocurrencies.
5 REASONS WHY FINANCIAL INSTITUTIONS ARE CAUTIOUS OF CRYPTOCURRENCY.
1.THE DARK WEB:
Dark web is the place where you can find illegal stuff. By using crypto currencies like Bitcoins people can make illegal transactions anonymously. Cryptocurrencies like Bitcoins are a way to empower such transactions across the globe which will ultimately result in increased cyber crime.
EASY SPECULATIONS
As of May 2017 the price of bitcoin value climbed above $2,000 and on December 2017 attain the all-time high of $19,783.21. There have been many fluctuation in the value of Bitcoins and this scenario is likely to continue. Due to the extreme highs and lows Bitcoins present a massive possibility for speculation. Just like trading in shares, trading in Bitcoins is massive and seeing the rise in traction around cryptocurrencies it is likely to grow further.SHIFT IN ECONOMIC POWER
The power that was vested in the governments and central banks is shifting to the masses. This revolutionary change in transaction handling has the power to change the economic structure. To bring security and Thorough inspection, central banks and financial institutions maintain a record of all the transactions undertaken by the people. Now with digital currencies, this economic power can be challenged by people.MONEY LAUNDERING
There have been implications that Bitcoins can be used to secretly launder money outside the country. Central banks across the world have been wary of Bitcoins as an uncontrollable and unpredictable form of currency. Cryptocurrencies are leading to loopholes in the current bank’s data about the money transactions leading to inability to track economic activities.THE EMERGENCE OF NEW MARKET
Cryptocurrencies have led to the emergence of new markets. Currencies like Bitcoin and Ethereum have opened gates for a new kind of market which unlike present money market is controlled by no one. Cyberspace will rise up as the managing body that will handle and maintain such disruptive markets. The near zero transaction cost along with other characteristics has made these currencies even superior to the traditional money we are accustomed to using.
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