Advantages and Disadvantages of Cryptocurrency
Cryptocurrency Possibilities and Concerns
Advantages of Cryptocurrency
- High Return in Short Period
- Faster Transactions
- Local and International Transactions at same time
- Safety and Security of data
- Superior Blockchain Technology for functioning
- Mining is also possible
- No Physical space or Counting is required
- Accepted by High-tech companies and large businesses
- New generation acceptability
- No need for a bank account
Disadvantages of Cryptocurrency:
- High loss possibility due to higher rate of variations
- No reserve assets to back up the value
- Not all business firms accept it
- Most governments are not promoting or regulating
- More people prefer physical cash and bills
- Less even, fake currency presence
- No physical shape or size to feel it
- Unknown creators and algorithms
- Higher number of new coins every day
Advantages and Disadvantages of Cryptocurrency
The highest rate of investments nowadays is happening in Cryptocurrency. It has outplaced any other form of investment. In cryptocurrencies, Bitcoin is the maximum opted currency by worldwide investors. The reason for this is due to its history and value. Bitcoin is the first-ever such currencies in the world. It is also the highest valued currency. It is not only used as a money or fund exchanging medium, but also as an investment. The highest value and wider acceptability make it the most preferable name in the category. Its complicated algorithm and related safety are other reasons.
The first-ever thought of cryptocurrency was started in the year 2008 by Satoshi Nakamoto in Japan. In 2009, the first-ever virtual currency was launched with the name Bitcoin. Today, the total number of cryptocurrencies is more than 6000 in the world.
Cryptocurrencies are the fastest-growing money or investment in the modern world. It has the highest standard of safety than other forms of investments. The transactions are easier even if they are international ones. It takes only seconds to finish a transaction. Safety due to its format of blockchain system makes it transparent and error-free. To make a fraud, the whole participants in the blockchain need to do a similar action.
One of its benefits is its mining possibility. That means it is not only trading, one can mine and create stock in their vault.
The safety and security in mining are also as good as its trading function due to its linkage to cryptography. So, doing fraud on the mining side is also not an easy task.
The cryptos are getting faster growth due to the vulnerability of official currencies in some countries. An example is Lebanon.
Advantages and Disadvantages of Cryptocurrency
Another factor of its popularity is the digitization of the world economy. Nowadays, almost all financial transactions are happening online. Physical cash or bill transactions are getting lesser and lesser every day. This trend of virtual financial documents boosts the importance of virtual currencies also. So these currencies are getting more popular and acceptable among users worldwide.
Major investors like Tesla’s Elon Musk are finding cryptocurrencies as an investment and transaction mode. Not only Musk, Canadian investor Kevin O’Leary and American investor Ray Dalio are also depending on cryptocurrencies as trading and investment option. These kinds of actions increased users’ confidence to a higher level.
World financial giants Visa and Goldman Sachs etc. are also putting their weight being cryptos these days.
The most attractive factor of Cryptocurrencies is their high profitability over a lesser time frame. Even though this is due to high volatility, an investor who is capable of forecasting the turbulence factors prefers to go with cryptos.
Concerns over Cryptocurrency
Like in the case of profit, it stands to hand over a heavy loss also when the forecasts go wrong. Secondly, the majority of traditional and old-age business people are not so convinced about virtual currencies. They still prefer to go with traditional physical cash and bill transactions.
Even though business people like Elon Musk prefer cryptocurrencies, there are others like Warren Buffet who still keep their distance from it. This is a factoring concern for new users to adopt virtual currencies.
People like Musk are influencing the crypto business. This is an advantage and disadvantage at the same time. In case of a news release from him saying against cryptos, the price plunges like anything. The loss of market value will be high. So the risk for those who are having a sizeable quantity of cryptocurrencies is very high.
The basic issue of cryptocurrencies is their news value. Any news that spreads against the value of a currency will degrade it. This will affect the value suddenly. Sudden losses are another factor like in the case of sudden profit.
There is no reserve of assets against cryptocurrencies like in the case of physical currencies. It fully depends on algorithms. This makes the value of such currencies fluctuate drastically.
Another factor of concern is the non-acceptance of virtual currencies by nations worldwide. The majority of countries are not considering it as a medium of transaction to date.