The Core of Bitcoin – decentralization
Bitcoin is decentralized, so its users are in charge. Whenever they want to send cryptocurrency to someone else, the network checks all available transactions to confirm whether the sender already has the coins. If the coins aren’t in use anywhere else, the receiver can then complete their transaction. Each machine that participates in this network collects a list of all transactions ever made on the network, making it impossible for anyone to double-spend coins or manipulate records.
The cryptocurrency market
Many people invest in cryptocurrency. In fact, they get to select from more than 10,000 different crypto coins, which many have never even heard of. The cryptocurrency market is unique, as it allows users to buy and sell intangible assets that are not regulated by any government agency. Although digital assets, like cryptocurrencies, may be intangible, they fluctuate just like stocks and gold, thus making them easy to trade. The Bitcoin price is still one of the hottest topics for many traders globally.
Because cryptocurrencies aren’t regulated, they also don’t fall within the jurisdiction of any regulatory body. This means they can be used to facilitate many crimes, such as money laundering and tax evasion, and it is these very crimes that make cryptocurrency exchanges vulnerable to hackers and developers alike.
The Bigger problems
Tax evasion and money laundering are only the tip of the iceberg when it comes to cryptocurrencies. The underlying blockchain technology has far more profound implications for society, businesses, and government. Many governments fear that terrorist organizations and big mafia are actively using cryptocurrencies, and special forces cannot track them.
Blockchain technology has created a new financial market that allows businesses to operate in a tokenized environment. Initial coin offerings, or ICOs, are one of the major ways investors can participate in the creation of new cryptocurrencies. However, in many cases, investors are scammed because of a lack of regulation.
Benefits against risks
Many people buy BNB, Bitcoin and other types of cryptocurrencies, as they want to invest, trade, or just possess. But there are far more people who want to buy but are afraid to take the next step. Why?
Decentralization vs regulation
Decentralization is an essential feature of Bitcoin that offers customers a great sense of privacy. Since digital currency does not require personal details for use, users can remain anonymous and share information only when they want to. However, if their computer becomes infected by malware and hackers steal their virtual coins, there is little chance of getting it back because transactions cannot be reversed once completed
Transparency vs front-running
The transparency of cryptocurrencies can be a double-edged sword; while this feature is beneficial for legitimate users, it also makes you vulnerable to malicious actors. That’s because all transactions on the blockchain are recorded and made public. With this information, scammers can target users who they know have large crypto holdings and lure them into scams and front-running practices.
While the anonymity that comes with cryptocurrency transactions offers a sense of security, it can also shield your personal information from prying eyes. Because there is no way to reverse a transaction in the cryptocurrency world, it can be hard to recover lost or stolen funds. You also have no way of identifying the thief if your assets are stolen.
Overregulation of cryptocurrencies is one of the most relevant issues on the table. Many are concerned that regulations will impact cryptocurrencies negatively, as the whole idea behind blockchain is freedom. Restrictions that are imposed should not go too far, or else innovation will be stifled. Many entrepreneurs fear that too much regulation will suffocate the industry and encourage the black market rather than foster digital currency acceptance.
As cryptocurrencies mature and become more widespread, their regulation is going to become a serious topic of debate across the globe. Some countries have been very open and liberal about cryptos (Switzerland, El Salvador, etc.), but other countries want to regulate them more (like the US). However, overregulation stands to threaten the unlimited potential that cryptocurrency brings.