Login     Sign Up     |      Home      Regions      Verify a Certification     EBA Portal    

Do You Use or Invest in Bitcoin? Beware of these Risks and Date!

Bitcoin seems to get free ads from the onslaught of two malwares in recent months. People and governments are becoming more aware of virtual currency technology that evolves into a secure internet payment tool. Though unfortunately, it can also be used for cybercrime because of its anonymity feature. On the other hand, the value of the currency soaring height makes it become a very lucrative investment instrument.
Just imagine, based on coindesk.com, the value of 1 BTC before April 2011 is just under USD 1, and now its value shot over USD 2500! A very high growth, especially in March to June 2017 period when its value rose dramatically around 250%.
However, this investment is seen as very risky because there is no intrinsic guarantee for the cryptographic currency. This is a real threat because if the system that supports it fails, then a fall in the value of Bitcoin can occur, and it may be determined on 1 August 2017 to come.
Bitcoin is built on blockchain technology. As James Falahuddindescribed in his article in Detik inet, all Bitcoin transactions will be stored in a connected and updated block. Well, who made those blocks? This is where we get acquainted with the term MINER who is in charge of producing blocks with certain security levels for a fee of Bitcoin.
Block production is done with special tools to perform certain computations to produce a code that can be connected to the previous block. The analogue is like Domino games, MINER is a player who is looking for the right domino card (BLOK) to pair and NODE is a pit boss. In the blockchain world, NODE is a computer or server managed by Bitcoin users (vendors, exchangers, wallets, etc.) connected to each other, storing all blocks and information about all transactions.
When we play dominoes, there is often a branching when the player chooses to put his cards on different ends. This is called FORK and occurs also in the blockchain. The longest FORK will be chosen by NODE so MINER must compete to produce blocks that can be paid.
The system is built on decentralization with the idea of ​​equality and democracy based on anonymity. Like democracy, when disagreements arise that cannot be solved, usually what often happens is a split up.
On August 1, 2017, will begin voting for two and a half months among the NODEs to enable the SegWit feature. This feature will increase Bitcoin's scalability because now the network is already full so that it makes the transaction confirmation period becomes longer and the cost is bloated. For MINER, this feature will certainly cut profits.
This mechanism is a new mechanism, before that it was MINER who did the voting to update the software with new features. Dimaz in his article in Kriptologi conveys the risks that can occur due to the sharp difference between supporters and opponents of this feature. There will be two branches of the chain, the NODE chain and the MINER chain that have different rules and finally it will create 2 different coins. And if this happened, the value of Bitcoin will sink, so will your investment.
To reduce the risk of system changes above, Dimaz recommends keeping the private key of the Bitcoin address in the paper wallet or hardware wallet. Next is to delay transacting Bitcoins on those dates to avoid canceled transactions because on unused branches, the blocks containing the transaction data will be deleted.
In its press release, Bank Indonesia states that Bitcoin and other virtual currency are not valid currency or payment instruments in Indonesia. Bank Indonesia Regulation 18/2016 has also prohibited the Provider of Payment System Services to conduct payment transaction processing using virtual currency.
Investment law states: High Risk High Return, or High Loss. Bitcoin is not protected under Indonesian law, any risks associated with the ownership / use of Bitcoin are borne solely by Bitcoin owners and users of other virtual currency. You have a legal issue if you want to make a Bitcoin transaction in Indonesia, and you will face a greater issue on changing the Bitcoin system on the next moths.