Advantages and disadvantages of cryptocurrency

Essentially, cryptocurrencies are the same investment with high risks. No one can guarantee that in a week/month/year the whole system won’t collapse and crypto-millionaires won’t lose their wealth.

Calling for an active purchase of virtual currency is inappropriate. Each person has to understand for himself/herself how he/she feels about such risky financial ventures. Some of them have already tasted all the delights of owning such assets, while for some others it is still a kind of fraud, which can take away everything in a moment.

Briefly about Bitcoin

To make it clearer, the advantages and disadvantages of cryptocurrency should be analyzed with the help of concrete example. It makes sense to choose bitcoin, which even those who have never been into the subject know about it. Before exploring in more detail, one should answer for oneself the question of whether I am willing in principle to get into it and take certain risks. If the answer is yes, then you can proceed.

Bitcoin was launched in 2009. The creator is an anonymous programmer known in cryptocurrency circles as Satoshi Nakomoto. The currency is based on blockchain, a distributive ledger with enhanced security against hacking.

Bitcoin has both pros and cons. When investing in it, you should be aware that it is the world’s first decentralised cryptocurrency that is transmitted from person to person. Bitcoin is considered to be revolutionary as it has created a real furore in the global financial market.

The merits of

Cryptocurrency is similar to the casino points a regular player earns. But the difference is that the latter do not get more expensive every day. Virtual currency, on the other hand, tends to rise in value. It turns out that playing slots is already less profitable than playing on a cryptocurrency exchange.

On top of that, virtual currencies have a number of undeniable advantages, including:

1. Eliminating inflation – cryptocurrency, from the moment of release, usually has a fixed value unlike traditional currencies.
2. Ease of management and maintenance – cryptotransactions are much safer because they are stored on the equipment of the developers or the miners themselves. The latter even receive some sort of remuneration. This is a commission for asset transactions.
3. Privacy – the blockchain contains various puzzles, which makes decoding much more difficult, if not impossible.
4. Decentralised – control is exercised by the developers as well as those users who own a large number of coins.
5. Cost-effectiveness – the ability to easily transfer money through cordons, as well as minimal transaction fees.

The convenience, speed and security of virtual currency has become a priority feature for those trying to find an alternative to traditional money.

Disadvantages

Despite their many advantages, cryptocurrencies also have disadvantages. For some, these can be weighty, while others can turn them into pluses. The main disadvantages are:

• Use for illegal transactions;
• Loss of information due to hacking/theft and consequent deprivation of financial assets;
• Although there is decentralisation, certain structures remain in control;
• Cryptocurrencies themselves are highly secure, but cryptocurrencies are not;
• There are no refund or cancellation schemes.
  Despite the risks, virtual currencies, particularly bitcoin, remain in demand.