US Senator Elizabeth Warren believes that Bitcoin is a cryptocurrency that can compromise the banking system. No government can reverse Bitcoin transactions or manipulate its supply, contrary to what happens with fiat money.
Bitcoin is a cryptocurrency that no government controls, so it is private, secure, and decentralized. However, regulators have said that it does not offer any confidence, as it does not belong to any central bank.
US Senator Elizabeth Warren claimed that Bitcoin is a cryptocurrency that can endanger the banking system. She argued that that the crypto asset makes the latter available to shadowy super-coders who use it at their convenience.
Volatility Can Lead to the Loss of Money
If someone bought 1 BTC at USD 145 in 2015, they would have USD 56,000 on May 11th, 2021. On the other hand, they could have USD 37,000 just ten days later, a loss of almost USD 20,000. However, Bitcoin is trading at around USD 61,000 and has accumulated growth of 10.6% in the last week.
Renowned US financial institution Bank of America ranked Bitcoin as the most profitable asset from 2010 to 2020. Although that comment does not come from a central bank, it is clear that the cryptocurrency is not that bad at this point.
The Investor is the Sole Responsible for his Money
Within the Bitcoin ecosystem, some wallets allow more effective protection to investor funds. However, the responsibility lies entirely with the owner of the hardware wallet, as he must protect his recovery seed phrase.
Bitcoin allows users to travel around the world with their holdings without technically anyone knowing about it. On the contrary, banks can limit withdrawals, leaving account holders without money.
BTC Users Have to Pay a Lot of Fees
One argument states that using Bitcoin requires paying a lot of fees and waiting for a long time. However, researchers reveal that the Lightning network allows paying with the cryptocurrency immediately and with charges below USD 0.01.
In October 2020, someone paid a fee of around USD 11 for sending a total of 88,857 BTC, equivalent to USD 1.2 billion. That person moved a billionaire fortune for just USD 11 while that sum went to miners.
The Government Does Not Regulate Bitcoin as It Does with Fiat Money
Although Bitcoin became legal tender in El Salvador, the rest of the world still considers it an unregulated currency. For example, China has taken the regulation on the crypto asset very seriously, banning its use in the territory.
In Bolivia, the government banned cryptocurrencies, but bitcoiners continue to use them in that country. Of course, people do not need certification from the authorities, contrary to what happens with fiat money. Besides, the government can print an infinite amount of fiat money while Bitcoin will only allow 21 million BTC in circulation.
Bitcoin Does Not Request Legal Documentation for Its Use
According to various specialized studies, hackers usually do not use Bitcoin to commit their illicit activities. In addition, most of the income and transactions of these criminals are in the form of fiat money, for which they use the banks.
Although some terrorist groups such as ISIS or Al Qaeda have used Bitcoin, fiat money like the US dollar is not completely clean.
Bitcoin Does Not Allow Reversing or Blocking Transactions
Banks can block the funds of the account holders, even if they are the ones moving them. In the case of Bitcoin, they can move all the funds they want without any organization stopping them.
Bitcoin allows people to travel worldwide with their money, just with their wallet and an Internet connection. Conversely, banks can request many explanations about why they are spending their money.
Of course, people can risk that the government will block their transactions with fiat money. Furthermore, they may decide to move their available Bitcoin funds without the protection of a bank.
Before Using Bitcoin, Investors Need to Do Some Personal Research
The use of Bitcoin requires prior research, contrary to when using a bank card. The reason for this is that this new technology may not be very straightforward.
People can choose between learning by themselves and going to the bank to have a qualified person serve them. However, those who invest in Bitcoin can learn from experts who share their experiences and knowledge to make the best decisions.
By Alexander Salazar
