5 Legal Concerns About Bitcoin

Digital currencies like Bitcoin are a growing form of payment method used by businesses and consumers – especially for online transactions. Many people find Bitcoin more appealing than traditional coins because they aren’t under the control of a central bank. Demand for a digital currency determines its value. Unfortunately, legal concerns are prompting more scrutiny for Bitcoin – which could hurt the digital currency’s future value.

 

Many nations don’t like the fact that banks don’t control digital currencies like traditional legal tender.

Central banks yield a lot of power because they can (somewhat) control the value of their money and nation’s inflation rate. However, digital currencies threaten the monopoly that central bankers hold over their nation’s currency. That means politicians around the world are looking at new regulations to reign in Bitcoin. Unfortunately, investors could see steep losses if new laws clamp down on digital currencies.

 

Owning Bitcoin doesn’t protect you from theft.

Data thieves have figured out how to steal digital currencies from online accounts. Unlike a bank account in the United States (which is FDIC insured), your Bitcoin account has no protection from loss. Therefore, data thieves could steal your digital currency.

 

Investors have fallen victim to digital currency fraud schemes.

For example, someone interested in buying Bitcoin visits a scam website thinking they are buying Bitcoin when, in reality, they are being swindled out of their money. Make sure you research any site selling digital currencies before you spend your money there.

 

Many experts warn that the value of digital currencies is being illegally manipulated to inflate them.

That means the value of Bitcoin could continue to rise – or it could fall (dramatically). If Bitcoin loses value, investors stand to take huge losses. Therefore, you must invest cautiously when it comes to digital currencies.

 

Lastly, Bitcoin is a popular payment method on the dark web because it’s not tied to banks and therefore is hard for authorities to track.

For example, data thieves often demand Bitcoin as a ransom to unlock computer systems. In fact, victims of ransom attacks have paid out millions in Bitcoin to get back their stolen data files. Data thieves often use Bitcoin to demand payment from ransom attack victims or sell stolen identities for Bitcoin payments.

 

 

In short, before you invest heavily in digital currencies, carefully evaluate the legal concerns. As Bitcoin becomes a more popular way for criminals to conduct business online, legal issues will continue to grow.

That means you can expect for governments around the world to increase regulations on Bitcoin. Legal concerns might also hurt the future value of digital currencies.

 

Article Photo by Nils on Unsplash