Have you been considering including cryptocurrency in your wallet? Maybe you’ve already started researching cryptocurrencies, and you want to know more about the advantages and disadvantages of cryptocurrency before you commit? Or maybe you’re just tired of soaring gold rate today in Latur or Kerala and want to try out something cheaper and wondering whether cryptocurrency is a sound investment. Check out this page for more info.
Whatever the reason, we’re here to help. In this article, we’ll be telling you the most prominent pros and cons of cryptocurrency—so you can form your perspective. So without further ado, let’s jump right in.
Table of Contents
The problems that plague traditional fiat currencies—inflation, corruption, political instability—are largely solved with cryptocurrencies. Because cryptocurrencies are not managed or tracked by any single government or entity, they are resistant to inflation and corruption.
In some ways, cryptocurrency is very transparent. Every transaction is recorded on a public ledger (called a blockchain) and cannot be tampered with once it has been recorded. This protects consumers from fraud caused by chargebacks and reversals (which can happen with credit cards).
Cryptocurrency transactions are encrypted and secure, and there’s no need to share your personal information on the blockchain. Each transaction made is recorded on the blockchain and cannot be altered. If a hacker tried to change just one character in a block; that block would be changed on every copy of the blockchain across the network. This means they would have to alter every single copy simultaneously to have any effect. This is why blockchain transactions are practically impossible to fake.
Cryptocurrencies can be used anywhere in the world where there is an internet connection—unlike fiat currencies, which may have international transfer fees.
5.No third parties
Transactions are peer-to-peer, with no banks or other financial institutions involved. You can pay for things and trade cryptocurrencies without involving banks, credit card issuers or other third parties. That appeals to some folks who think the third parties charge too much or are prone to censorship.
6.Minimum transaction fee
When cryptocurrencies are involved the transactions are done through blockchain where the holder only needs access to a computer and the internet. Hence they can transfer the required amount of cryptocurrency without there being any costs involved. Since there are no banks or third parties involved there are little to no overhead costs.
Disadvantages of cryptocurrencies
If you have been keeping up to date with the cryptocurrency ecosystem you would know that cryptocurrencies are no strangers to volatility. For instance, the price of bitcoin has in the past jumped from $1000 to $20000 and then dropped to $13000 and has still not reached consistency. This could be seen in other cryptocurrencies as well. This symptom makes cryptocurrencies highly unpredictable and therefore daunting as well. This is one place where you are better off with investments in things like gold which are rarely volatile. You can confirm this by merely looking today gold rate in Rajasthan or for any other city and keeping track of the prices for a week. You will notice that the gold markets rarely if ever show volatility.
Absence of uniformity of law
The laws surrounding cryptocurrencies such as the tax law or their general legality are constantly changing in different countries sometimes by the minute. Hence if you want to enter the cryptocurrency market this could be demotivating as it adds to the unpredictability factor of cryptocurrencies.