Bitcoin, the trendy digital currency, garnered some negative press in August when the U.S. Consumer Financial Protection Bureau warned about its potential pitfalls, like unpredictable exchange rates, hackers and scams.
Despite these concerns, the consumer bureau was quick to add that virtual currencies like bitcoin “offer the potential for innovation,” something that has captured the attention of casual consumers and big hedge funds alike.
Before dipping your toes into bitcoin’s often choppy waters, you should know that this particular form of digital money represents quite a double-edged sword. While some financial experts question its viability and safety, others are adamant that bitcoin is here to stay.
Here’s a look at how this disruptive technology works and what you risk losing – or stand to gain – by using it.