When the use of bitcoins for doing transactions online became prevalent, the controversies with its widespread use have also increased.
Bitcoins and their use have resulted in many questions and debates about the currency because it is unregulated and has no third party access. This means that there is no middle man or banks that often provide security regulations for every transaction being made. Plus, there is no depositor insurance coverage in using bitcoins.
Other than the above, there are four reasons why bitcoin transactions have been considered a big deal for some people. Learn more about the details below.
1. Bitcoin transactions are irrevocable – The features of traditional payment methods such as bank drafts, wire transfers, credit cards, and personal checks are insured, and any transaction involving them can still be reversed by the banks they are associated with. Whereas with bitcoins, every transaction made is considered final since there are no insurance protections.
2. Bitcoin transactions circumvent banks – The use of bitcoin wallets cannot be frozen, seized, or audited by law enforcement agencies and banks. Plus, since there is no middle man, no one can impose any limits on the spending and withdrawal of bitcoins. Therefore, any user can decide how he or she wants to manage his or her virtual finances.
3. Bitcoin transactions are unregulated – Doing transactions with bitcoins is considered a threat to government control and taxation because these transactions are not trackable by any regulatory body such as law enforcement agencies. In fact, bitcoins have been prevalently used by black markets to trade in contraband and for money laundering.
4. Bitcoin transactions are gradually changing how people manage their wealth – Since the power of currency has been handed over to banks, people are made to believe that these banks print, store, and move their money while being charged for the services done by the middle man. However,bitcoins offer a different approach that is opposed to bank practices. Bitcoins can help individuals manage their wealth very well since bitcoins have actual values.
With these controversies, it is important to note that bitcoin transactions should be regulated so as to provide a proper avenue for users to transact. Eventually, this will also allow users to gain accountability in case of data loss.