THE ADVANTAGES AND DISADVANTAGES OF USING CRYPTOCURRENCIES
Cryptocurrencies have gone a long way, with a very colorful history and wild value fluctuations. Since its first full-blown use in the financial markets, participants now see its pros and cons more clearly.
Cryptocurrencies offer a lot of advantages for users and traders, but it’s not without flaws. That much is clear for those who have already used it.
Cryptocurrencies provide very fast transactions. The speed is far more superior to any kind of banking transactions of today. Bitcoin takes a maximum of 10 minutes of validation, while Ethereum only takes about 10 seconds.
Cryptocurrency transactions are fully anonymous and it’s not possible to identify who has made a transaction with whom. The users will be using only the network address of the sender and receiver. Not identity of the participants will be released in the shared public ledger.
Restrictions on Payments
This is perhaps the most remarkable feature of cryptocurrencies. There is no restriction when it comes to the transactions performed. You as a user can send the currency anytime and anywhere. That means no time boundaries can restrict your payments.
Minimal to Zero Transaction Fees
Transactions made with the use of cryptocurrencies are usually free. If there’s a fee to be paid, it’s usually very minimal when compared to the current transaction fees charged by conventional payment processors.
When using bitcoin, you can perform transactions virtually without any regard to transaction fees. Sometimes users offer more speedy transaction speeds for higher transaction fees, however.
Cryptocurrencies are one of the most secure currencies today. It’s immutable, meaning the transactions that take place on the blockchain system are irreversible.
Lack of Information
It’s very common for people to dive right into the sea of cryptocurrencies without adequate prior knowledge of how the system works. That’s partly because of the heavy hype surrounding the names of such cryptocurrencies.
Even if the demand for cryptocurrencies is firmly growing, many governments have yet to give official approval for the use of cryptocurrencies in transactions. Because of this, the usage is very limited and is only done is specific areas.
You can see this one either a pro or a con, depending on how much you can tolerate volatility. Current market trends suggest that there’s an uncommon surge in the exchange rate of cryptocurrencies, especially with the value of bitcoin, the OG of all cryptocurrencies.
Ban from the Government
Governments don’t have the power to control cryptocurrencies. But they DO have the power to ban or make them illegal when it comes to transactions. This casts a massive shadow over large movements supporting cryptocurrencies.
Cryptocurrencies’ strength is also its weakness. If you mistakenly paid someone with digital coins, there’s no way to revert the transaction even if you managed to track who received the coins. This is a huge problem for users and big advantage for fraudsters.
Impossible Key Recovery
Most cryptocurrencies are decentralized, meaning there’s no central hub or authority that regulates all transactions. That means you have the sole responsibility of keeping your private keys private. Once you lose it, there’s no way to recovery it.