Bitcoin is an awesome concept. But in recent weeks, it’s facing its first big challenge.
Symantec reported that hackers are now trying to steal Bitcoins from legitimate users using a Trojan Horse. Last Thursday, a Bitcoin user claimed he lost 25,000 Bitcoins, worth about $500,000 at that day’s conversion rates.
Although his story can’t be verified due to the anonymous nature of Bitcoin (more on that later), it’s certainly believable.
“I feel like killing myself now,” the user wrote.
In any currency, safety is paramount. If Bitcoin were to survive as one, it needs to be reasonably protected against hackers. For starters, Symantec recommends Bitcoin users to encrypt their wallets and choose a strong password.
Another problem is Bitcoin’s crazy volatility. Back in its early days a few years ago, Bitcoins were worth only 5 cents on the dollar. By June 9th, it had shot up to $28 per coin for a gain of 5,600 percent, according to Financial Times. Then, on June 10th, it plunged 33 percent in one day.
If Bitcoin wants to be a serious currency in the long-term, its value simply can’t fluctuate like that. Businesses and individuals need predictability so they can depend on their currency and plan for the future.
So why even bother with Bitcoin, given all its problems and challenges?
Bitcoin is worth the trouble because its soundness and anonymity is unparalleled.
Its infinitude is better than fiat currencies and even gold. As many citizens around the world are aware now, governments can print fiat currencies at will, dilutes their values, and extract the invisible tax of inflation. Even gold runs the risk of a mining boom.
Bitcoin is also the only anonymous digital currency. Other alternative don’t even come close.
In the aftermath of the global financial crisis and amid the growing mistrust of governments, the underlying demand is there for an alternative digital currency that’s anonymous and sound.
Bitcoin is the market leader in this regard. If it can solve its safety problems, its future looks bright.