So have you closed your Bank of America account and transferred your US $ accounts into Bitcoins?

For those not familiar with what Bitcoin is, it is an electronic currency created in 2010 by an anonymous person(s).  Bitcoins take the form of strings of numbers that can be electronically owned by and transferred among people and/or businesses without any third parties. 

What makes Bitcoin attractive is that its creator only created a ‘finite’ numbers of Bitcoins.  This appeals to the people that are worried about the easy money monetary policies of major central banks around the world which have been printing an unusual amount of money in the last several years and thus devaluing the value of their currency.  So the idea of having a currency that will not lose value due to inflation or a central bank policy sounds great, however there are many inherent flaws to this system.

First one would be the potential intervention by governments who would deem this currency as a threat and thus banning it.  Another one would be potential exposure to hacking or cyber attacks, as accounts can get hacked and Bitcoins stolen.  Thirdly there is also the risk that given the  huge daily volatility in the exchange price of Bitcoins which is not a  positive attribute for a currency this medium of exchange simply never gain the needed mass market acceptance.  And finally what if the person(s) who created Bitcoin changed their mind and add more Bitcoins!

So basically don’t buy into the hype and don’t close your Bank of America checking account!


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