Muna Al Fuzai

There seems to be a new global trend on how to make quick money and become wealthy overnight! I am not a financial expert, but like everyone else, I heard about bitcoins and read stories about those who became rich in a few months. I kept wondering what is the bitcoin. Can we really trust attractive advertisements promoting it, and what are the guarantees?
The idea of becoming a millionaire is definitely seductive, as most of us today are troubled due to a shortage of money. So if there is an easy way to make a lot of money, many would say yes, let’s go for it. This is precisely why I think it is time to write about this topic.

The Web defines bitcoin as a crypto-currency and a digital payment system. There are many digital currencies in the world – however, the bitcoin is the most famous these days. In fact, it had stirred controversy since its inception. Some people have put their money and life savings into this new digital currency. But my question has not been answered yet!

It is known that bitcoin as a digital currency was not issued by any central bank and is not subject to any supervisory body. All its transactions are on the Internet and it has no physical presence. Its value has fluctuated sharply, and questions were raised about its performance in 2017 and its future. As of Feb 2015, over 100,000 merchants and vendors accepted bitcoin as payment. According to research by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a crypto-currency wallet, most of them using bitcoins.

One of the advantages of this currency is that its fees are low, with speed and secrecy in its dealings, because it is not tied to a particular country. This eliminates the control of central banks on the printing of currency that causes inflation and high prices. The reason this currency is protected from inflation is its limited number, with only 21 million bitcoins to mined by 2140. This limited number gives it great value in the market.

In 2016, a letter was issued from the Kuwait Banking Association to local banks asking them to warn their clients against using this so-called virtual currency, after noting that the currency was spreading in a way that would raise risk for its traders. Banks have been asked to strengthen their efforts to protect their clients from the spread of this currency, especially since it is a hypothetical digital currency that can transfer instantly to anyone anywhere in the world via the Internet.

The banks agree with the idea that the main problem with the use of bitcoin is that it is used without a central authority and supervision. They have fears of violating money-laundering laws or engaging in illegal activities. Germany is the only country that has officially recognized this currency as a form of electronic money.

I have read about well-known companies that started to invite the public to buy bitcoins, but people should be careful and must not rush to give away their savings, because this may open the door for suspicious operations and crooked companies too. It’s worth mentioning that not all economists are supporters of this currency due to logical concerns of risk and losses, so be careful to drift behind the unknown. I agree bitcoin ads are encouraging, but caution is essential.

By Muna Al-Fuzai
[email protected]


Check Also
Back to top button