Pros and Cons of cryptocurrency

Pros and Cons of cryptocurrency

Pros and cons of cryptocurrency today crypto has become a breaking topic to discuss anywhere the price of bitcoin recently reached 50 000 on the other hand various payment platforms including paypal square and bidpay are now accepting payments in several cryptocurrencies including bitcoin investors are now putting more money in cryptocurrencies and it also becomes easier to trade them on established platforms and they have their coins as well cryptocurrencies are highly volatile and are not accepted everywhere.

the pros first we will discuss some of the advantages of investing your money in cryptocurrencies. such as bitcoin transaction fees are cheaper when you are conducting financial transactions with a financial institution. you often have to pay abundant fees this is one of the many reasons.

why the cryptocurrency is better than the traditional system. when you are making transactions in the crypto world you are cutting off the intermediaries which means no additional fees secure transactions since technology is advancing rapidly.

there are numerous ways that identities can be compromised let me tell you that the blockchain ledger is based on various difficult mathematical puzzles hackers cannot easily decode those mathematical puzzles which is one of the reasons.

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why crypto is considered more secure as compared to an ordinary electronic transaction moreover cryptocurrencies use pseudonyms that are not linked to any account or user although all of the transactions and identities are strictly secured in the crypto world. you might want to note that cryptocurrency owners are still vulnerable to hackers.

why because the transactions are permanent this means that once you start a transaction the fund will stay in an indeterminate state while entering the blockchain decentralized. the entire system is decentralized and resists the control of the central authority.

let me tell you that most cryptocurrencies are controlled by the people who hold a significant amount of that coin and the developers using it moreover organizations developing a cryptocurrency control it before releasing it into the market this decentralization keeps.

the cryptocurrency free from monopoly so no individual organization can determine the flow as well as the value of the currency growing acceptance over the past few years the usage of cryptocurrency has been increasing in fact coindesk.

Com published a report in 2020 and claimed that coinbase recorded 135 billion dollars in crypto merchant transactions in 2019 surprisingly this represents a 600 increase as compared to 2018 moreover a chain analysis report suggests that payment processors saw nearly 4 billion worth of bitcoin activity back in the year 2019.

Moreover you might also want to note that there has been a significant increase in btc electronic wallets during the last few years protection from inflation.

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we have seen that the value of many cryptocurrencies decreases over time due to inflation when a new cryptocurrency is launched it comes with a specific amount. let me tell you that the source code specifies the number of crypto coins. for example there are only 21 million btc released on the planet now as the demand for bitcoins increases the value also increases in the long run.

it will prevent inflation higher returns lastly the major reason why most people consider investing their money in cryptocurrency is the massive potential for returns. for example if you had invested a thousand dollars in bitcoin back in 2020 you would have made more than hundred thousand dollars today moreover recent initial coin offerings have created huge returns in a short time for instance stratus raised six hundred thousand dollars during their initial coin offering in 2016.

Since then they have seen a 63 000 rise in the value the cons these were some of the benefits of buying cryptocurrencies.

Disadvantages of this digital currency

it is time to discuss some of the disadvantages of this digital currency illegal activities as cryptocurrency transactions are highly secure it is hard for governments to track down a particular user by their wallet address.

let me tell you that cyber criminals have often used btc as a mode of exchanging money and various illegal deals such as purchasing drugs on the dark web furthermore some people use cryptocurrencies to convert their illicitly obtained money through a clean intermediary to hide the source volatility while investing money in cryptocurrency comes with the potential of high returns.

the crypto market is highly volatile and you might end up experiencing great losses as well why because the value of these coins can change widely in a short period moreover various issues like hacking incidents can result in losses tax implications it is worth noting that. the irs has suggested that virtual currency transactions are taxable by law this means that if you are a taxpayer you will have to report crypto transactions while filing your tax returns however it is yet not clear how taxpayers can report the value and what they will have to pay as taxes data loss results in financial loss.

you already know that the developers aim to create source code that is virtually untraceable impenetrable authentication protocols and strong hacking defenses have made it safer to put your money in cryptocurrencies.

Currency wallet

however if you somehow lose your private key to the wallet you cannot get it back without the private key your wallet will remain locked and you cannot take your coins out of it this will eventually result in financial loss no cancellation policy. another major drawback of cryptocurrencies is that if a dispute occurs between the concerning parties the sender cannot retrieve the coins and if you mistakenly send your coins to the wrong wallet address you cannot get them back.

let me tell you that we have seen several hackers and scammers cheating others to send their money potential mismanagement. it is worth noting that every single cryptocurrency is a startup a team of founders is running the currency a solid founding team is required for a cryptocurrency to navigate from the ico phase to mass market levels if you are considering investing in a crypto ico.

i would suggest that you ensure to look into the founding team’s background and evaluate.

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