The Thing About Bitcoin…..
Compliance Webinars | Virtual Seminars for Professionals
The Thing About Bitcoin…..
Are they risky or can they be the decentralized wonder currency that can make monetary transactions just that much easier? The question abounds shortly after Hollywood Presbyterian Medical Center paid a ransomware to regain control over their IT systems after an 11-day battle with hackers. The payment mode? 40 bitcoins worth about $17000.
The issue now turns questioningly towards the non-traceability of a system that levels payment options for criminal activity and legitimate business ventures alike. But upon closer scrutiny - there’s ransomware, hijacking servers, and blocking access to patient records - all of which are the real risks here. Follow the breadcrumbs and the bitcoins in the end were simply a form of payment, not the cause for the security breach.
What’s the catch?
To look into a few other drawbacks of the system, it is difficult to buy them, sell them or even track them in the blockchain. However, with its lower inflation risk and lower collapse risk, the bitcoin seems to gain momentum despite these drawbacks. Amid its complex mathematical existence lies the simplicity of assuring payments to sellers. Revoking payments, such as a chargeback facility in a credit card, is not an option. Whether that serves as a drawback for you or a benefit is entirely circumstantial.
Where’s all this headed?
Hard to say. The market has seen a lot of ups and downs since 2013. The consistency lies in the open ledger system that records transactions – the blockchain. In fact Wall Street banks and venture capitalists have invested in the technology believing it could securely and efficiently handle cross-border payments or securities settlement transactions.
In 2015, the Washington Post lauded bitcoins as one of the six technologies that would change the world. For billions of people who lack the infrastructure to access a legal banking network, the bitcoin and blockchain represent a valid and secure mode of payment and holding securities. The conflict again lies in the ethical aspects of the network – it can be used as easily to fund terrorism as it can be to secure the financial resources of a pensioner in a politically-challenged province.
In the end, an almost incorruptible digital ledger – as the Post put it – remains the sole strength of the system. A few relevant figures that indicate the risks:
| The current estimate: 15 million bitcoin worth more than $5 billion. |
| FBI stats: Ransomware victims paid $18 million last year alone. |
| The surge and fall: In 2013, Bitcoin value surged over $1,000 apiece and current value stands at around $430. |
The bottom line
The risks are definitely there. But there are also those looking beyond traditional payment systems that have in place intrusive restrictions, particularly while conducting business long-distance. There are no fine lines to read, as in other investments, there is only an ecosystem that thrives on a software and a network of people. Investing heavily, in what is seen as a bubble by many, may not be the right call, but being a part of this global ecosystem can still open a few doors.
Additional Resource:
