Topic: The risks of using Bitcoin - page 11. (Read 1437 times)

The risk of security as you stated to me is overrated because bitcoin transaction is highly secured as long as the user has access to the wallet, the blockchain has the most secured security system which even the government can’t tamper with that is why the decentralized nature of bitcoin made bitcoin regulation by government impossible.

If that does happen, crypto is probably the last that will get affected. The algorithm is used by others such as banking etc, and cracking crypto might not be as profitable as social engineering, doing ransomware, etc. Which is why most attack happens through spam e-mail, phishing link, etc.

I think that some of these risks are a bit overblown, some are certainly true and some I don't think are as much risks as they are issues for governments.  I think the biggest risk for bitcoin, and other cryptocurrencies for that matter , is the risk of loss.  There are far too many people "in bitcoin" that have much of or most of their life savings inside it.  This is not the proper way to "invest" , or "store" bitcoin..you need a well rounded portfolio at all times.  To me, that is it's biggest risk.

The risk of advancements in technology to crack cryptography is probably another one. I don't know how severe that problem is and people say the algorithm could quickly be adapted, but if somebody cracks the algorithm I doubt that will ever become public knowledge until the harm done is really extraordinarily big. There are a couple of threads discussing the influence of quantum computing with pros and cons, but assuming that Bitcoin's algorithm might stay strong forever may also be naive to believe. [/list]

in my view, here the 3 risks very higher and even the government is not approving bitcoin because of these few cases government is worrying in money laundering will uncontrollable if it’s legal.

we users risks, using btc it’s the breaking of laws. the government has made provision for punishment here, especially in my country, new laws are being enacted to prevent its use.

Thanks Kimberl for taking the time and effort to elaborate on "Risk analysis" that i suggested you should write a different post about.

Any sort of Risk analysis is a pretty professional endeavor and you will find MBA graduates doing it for companies and products. The benefit of this forum is that we can crowd-source information and opinions. Still, it is important to recognize the sources from which we derive that information and give due credit to the ideas. Accordingly, it'll be great if you can elaborate on the sources from where the "Risks for Bitcoin" thought has been inspired (It could even be originally your own post, i just want to be sure).

Additionally, there is lot of factual information in this post. (Like the regulatory status of Bitcoin in Germany, Japan and the years when that happened). I request that you put some references there too.

I don't get what Risk of Policy though. From the post it seems you are talking about a lack of the traditional fiscal and monetary policy as well as there not being any governing body to implement the same. That is more like a feature of Bitcoin rather than risk.

About "Risk of substitution", I doubt that it is possible to create the same, genuinely cypherpunk  circumstances that lead to the initial community of brilliant OGs building up Bitcoin. Satoshi leaving behind a stack of One million untouched. Nick Szabo giving away 10,000 BTC to buy Pizza. I don't think the same natural and genuine community can ever form again now that cryptocurrency has become de-facto money. Do you imagine any of these "Teams and advisors" you see on seemingly genuine crypto projects would give away millions in the hope of adoption and education. I don't think so.

This is why, the risk of substitution does not seem a risk at all to me. Looking forward to your and others' opinion on this.

PS: You can always edit the OP to update the formatting or provide references and credit like i mentioned.

EDIT & PS: I would love to know more about the experience of having an actual outlet where you tried crypto payments.

We can control these two risks ourselves. This is not all risks, you are right, but also opportunities. Investors can profit from it.

There are five risks in the use of Bitcoin:

• The risk of Policy
  From a macroeconomic perspective, due to the “constant total amount” of Bitcoin, its circulation will be accompanied by the flow of goods and services, which has a small transmission effect on inflation. Adding the weight of Bitcoin to the world currency can weaken the transmission effect of monetary policy.
  
  1) Bitcoin breaks the central bank's monopoly on currency issuance. Due to its technological complexity, innovation and global nature, it is difficult for the central bank to monopolize its issuance rights.
  
  2) Cash in circulation or deposits in the banking system may be replaced by Bitcoin, which will have an impact on the base currency and currency multiplier; in addition, the existence of Bitcoin has an impact on the speed of currency circulation and its price level.
  
  3) The global nature of Bitcoin obscures the national boundaries that restrict the use of currency, and it is difficult for a country's monetary policy to isolate the influence of other countries' economies and policies.
   
  The central bank will introduce policies from various aspects to suppress Bitcoin, so as not to affect its monetary policy.
  
  
• The risk of the law
  
  In August 2013, Germany announced the recognition of the legal status of Bitcoin and it has been included in the national regulatory system. Germany is the first country in the world to recognize the legal status of Bitcoin.
  In May 2016, Japan approved the digital currency regulation bill for the first time and defined it as property.
  On June 9, 2021, the El Salvadoran government passed a bill to make Bitcoin a legal tender here. From September 7th, it will become the country's legal tender. El Salvador will become the first country in the world to use Bitcoin as a legal tender.
  
  At present, Bitcoin is only protected by the laws of various countries as a virtual commodity rather than a currency.
  
  Only a few countries recognize this status of Bitcoin and do not support it as a major currency.
  
  In cross-border Bitcoin infringement cases, because countries have different legislations on Bitcoin and have different characterizations of Bitcoin, the resolution of related disputes involving Bitcoin is relatively lagging.
  

• The risk of Speculation
  Bitcoin does not have national credit or physical assets as protection, and the price may fluctuate sharply, which is extremely risky for investors. However, in my opinion, speculation is a high risk but also an opportunity, and it depends on the individual.
  
  
• The risk of  Money laundering
  Bitcoin has the characteristics of anonymity and freedom from geographical restrictions. The flow of funds is difficult to monitor, and it will be very easy to circumvent government supervision, making it easy for criminals to conceal the source and direction of their funds, which provides convenience for money laundering, terrorist financing and evasion of sanctions .
  
  They buy other people’s bitcoins through the exchange platform, and then bring the bitcoins to other platforms or their own wallets. Through multiple transfers, the tracking path is difficult or directly impossible to trace, and then through overseas trading platforms or black markets or directly Commodities purchased overseas are exchanged for foreign currency to complete a series of acts such as money laundering.
  

• The risk of Substitution

    Bitcoin still has shortcomings such as lack of credit guarantee, poor security performance, and easy to cause deflation. At the same time, it has to face the competition of various emerging altcoins, and there is a greater
   risk of substitution! Although I think this possibility is very small.