Advantages and Disadvantages of Cryptocurrency

Most of the cryptocurrencies are hard-capped at a certain range. For instance, only 21 million Bitcoins will ever be issued. This practice ensures an increase in value as the demand surges thereby preventing inflation.

This also provides stability to cryptocurrencies and minimises volatility.

Unlike fiat currencies, cryptocurrencies cannot be counterfeited or double-spent. They are safeguarded with advanced cryptographic puzzles. Now, you know why these digital currencies are named ‘cryptocurrency’.

Cryptocurrencies are decentralised and thus, not influenced by central authorities like banks or even governments. Cryptocurrency transactions aren’t managed by a sole authority either. It is regulated by thousands of nodes on the network. These nodes are rewarded with crypto incentives to maintain the integrity of the network.

Cryptocurrencies fuel peer-to-peer transactions. You don’t need to pay hefty transaction charges to third-party institutions like banks.

You must be wondering – How come something is transparent and private at the same time? The cryptocurrency network is asymmetric. This implies that anyone on the network can view your crypto transactions, however, they are virtually untraceable. This is made possible with public and private keys. Thus, cryptocurrency transactions are transparent and also provide anonymity to users.

Have you waited for wire transfers to reach your uncle abroad? Cryptocurrency effectively solves this issue. It doesn’t matter if you send cryptocurrency to your neighbors or in different corners of the world, crypto transactions are lightning-fast. For instance, Ethereum handles 15 transactions per second. Ripple, on the other hand, handles 1700 transactions per second. Some blockchains even claim to handle more than 50,000 transactions per second.

Ever rushed to the bank for some important purpose just to know it’s a public holiday? Cryptocurrency offers 24 hours of accessibility. You can send or receive crypto coins, whenever you want.

Cryptocurrency transactions require minimal transaction fees. This is achieved by eliminating the huge walls of intermediaries like banks and other financial institutions.

To use cryptocurrencies, you don’t need to fill different forms nor you need to be tech-savvy to use this digital currency.

To make transactions in crypto coins, you need a wallet and an internet connection. You can easily navigate the wallet’s software and make crypto transactions.

Ever thought it would be this easy to make transactions?

Cryptocurrencies can easily change hands with most of the fiat currencies. You can also use crypto exchanges to trade your crypto coin against another. This easy exchange enables you to use cryptocurrencies at your convenience.

Criminals leverage the feature of anonymity to fuel their malicious activities. It’s impossible to trace the identity of the users making cryptocurrency transactions. This allows criminals anonymously to provide financial aid to activities like buying drugs, funding terrorists, money laundering, the dark web, and much more.

Where do you go if you lost your atm card? Banks, right? However, in the case of cryptocurrencies if you lose access to your private keys you cannot recover your crypto funds.

Cryptocurrency mining is an energy-extensive process. It is estimated that cryptocurrency mining accounts for 0.2% of global electricity consumption. The good news is mining processes are slowly moving towards green energy sources.

Storing your crypto funds at a safe and secure place is crucial. If you are still using crypto exchanges to store your crypto coins you must look at other resources. Past successful hacks have resulted in the loss of millions of dollars. This proves that cryptocurrency exchanges are susceptible to hacks.

Once a crypto transaction is initiated it cannot be reversed or refunded. This is a boon for scammers. If anyone lures you with some unimaginable offers, please stay away from them. Remember, if you send your crypto funds to these scammers there is no way to recover your funds.

Cryptocurrencies are the talk of the town. However, it is also true that many people aren’t completely aware of this wonderful technology. This lack of awareness induces a sense of risk for crypto investments among people. This becomes a major hindrance to its mass-scale adoption.

As discussed earlier, like any other investments or even currencies, cryptocurrencies also carry a degree of uncertainty. As cryptocurrency is currently not accepted by many governments, the volatility increases manifolds. However, if you are aware of the know-how of the crypto space you can earn huge profits.

Cryptocurrencies are not legalised in many countries whereas some countries have started embracing the technology. Also, cryptocurrency technology is still in its emerging phase thus, there are some scalability issues still waiting to be addressed.