You may have asked the question: is Bitcoin safe? on multiple occasions. Should you really think to put your money into Bitcoin? Well, Tim Draper is an investor with renowned opinions about the cryptomarket. He is an avid believer in the positivities of crypto and his bullish position has earned him many followers and detractors. On multiple occasions, his predicted forecasts have proved successful despite adverse scenarios, and this is something to take into consideration.
A few years ago, Draper predicted that Bitcoin would increase by more than 10k, a figure that only a few believed possible at the time. His prediction was met in about one year.
A month ago, Mr. Draper also predicted that Bitcoin would cost 250k by 2022. Quite a controversial and yet not impossible figure compared to Bitcoin’s previous performance over time.
This Thursday, in an interview for CNBC, Tim Draper spoke about the advantages of using cryptocurrencies over the traditional FIAT system. For the well-known investor, one of the most important aspects is that of security. If his opinion is to be considered once again, then it would seem that Bitcoin is safer than traditional fiat currency:
“Right now, your banks are being attacked all the time. The hackers are poking holes in your banks and going after your fiat money. And the bankers are pounding away trying to keep the hacks away, but they are getting hacked all the time. No-one has ever hacked the Bitcoin blockchain. It is the most secure place to put your money. And so, as a store of value, it is a great place to be. And if you’re in Argentina or Venezuela or Nigeria, you know that your currency is going to fall 30 percent every year, because, I mean, those countries tend to implode about every year. And people lose their fortune. Well, if part of your fortune is put into bitcoin, you’re not going to lose your fortune.”
Is Bitcoin Safe?
This statement is true, Bitcoin has never been successfully hacked but this still doesn’t make it infallible. Is Bitcoin Safe? Perhaps there could be the use of exchanges as trusted third parties to convert digital resources into cash — just like banks? However, there have been significant hackings into large exchanges resulting in multi-million dollar losses for investors, but this risk is equally there for standard banks. Hacking though in general, is caused by faults in the internal system of the exchanges, as well as by a security failure in the banks. Can it be really be considered a flaw in the actual economic system?
For this reason, it is always recommended to store cryptocurrency in a wallet (preferably a cold one) to avoid security breaches inherent in the use of third-party platforms. Mobilizing accounts to exchanges is only recommended for trading, and once finished relocating the crypto to a personal wallet is always recommended. So with that added element – an outside wallet holding your bitcoin, Its fair to say that that makes Bitcoin safer, whether or not more than fiat lies on several factors.
You can’t ask “is Bitcoin safe?” without considering another vital aspect that provides security to users; the decentralized nature of crypto. This characteristic means it is out of the control of third parties such as governments or economic influencers.
“If you are in Argentina or Venezuela or Nigeria, you know that your currency is going to fall 30% every year because those countries tend to implode about every year, and people lose their fortune. Well, if part of your fortune is put into Bitcoin, you’re not going to lose your fortune.”
This statement is critical because in these countries inflation exceeds the Bitcoin’s price volatility. Taking Argentina as an example, the country is so incapable of paying its debt that it had to issue 100-year bonds to try to alleviate the current crisis. A similar situation exists in Venezuela, where the State has stopped issuing official figures, and the calculations are based on figures published by news sites that claim to obtain their data from social networks such as Facebook and Twitter. Some sources even estimate an inflation rate of more than 1000%.
Other reasons given by Draper for preferring the use of cryptocurrencies over the traditional FIAT system are security, effectiveness, speed, daily use and the potential for additional developments.
Featured Image: twitter