By Dr. John Beckem
Ask yourself a few questions:
Who governs Cryptocurrency?
What laws are in placed to deter predators from stealing your digital currency?
Who enforces these laws?
Any robbery or attempted robbery of a bank, credit union or savings and loan institution constitutes a federal crime. Police have measures at their disposal to catch bank robbers, such as well-armed SWAT teams and Forensic identification techniques.
A further factor making bank robbery unattractive for criminals in the United States is the severity with which it is prosecuted. Accounts at all U.S. banks are insured by the Federal Deposit Insurance Corporation, a corporation of the federal government, bringing bank robbery under federal jurisdiction and involving the FBI. United States Federal Sentencing Guidelines for bank robbery gives long prison terms, and parole is not allowed in the federal prison system.
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government. The SEC holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, the nation’s stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States.
A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
However, because cryptocurrencies are virtual and do not have a central repository, a digital cryptocurrency balance can be wiped out by a computer crash if a backup copy of the holdings does not exist.
Cryptocurrencies are not immune to the threat of hacking. In Bitcoin’s short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value.
Why exchange US dollars that are backed by the US Government for a currency that is completely digital and vulnerable with no recourse for theft?
Think about it!
Dr. John Beckem is a Personal Finance Expert, Educator & Consultant. He helps middle income individuals and families free themselves from debt and build generational wealth.