Advantages of Cryptocurrency
A cryptocurrency is a decentralized virtual currency designed to be used for secure digital transections over the internet. As opposed to a central bank digital currency, like US dollar or Euro, cryptocurrencies are completely decentralized, which mean that the users can exchange cryptocurrencies without the need of an intermediaries such as banks. Cryptocurrencies can be used to buy regular goods and services however, most of the people buy cryptocurrencies for investment purposes, as they would buy any other assets, like property or stocks, for the same purpose. Most of the people wonder what is cryptocurrency? And what are the advantages of cryptocurrency along disadvantages?
Advantages of mining in Cryptocurrency
User can get cryptocurrencies either by mining or purchasing from different crypto exchanges. As of now, only a fraction of businesses allow purchases with cryptocurrencies. In 2021, EL Salvador became the first nation to make Bitcoin, a type of cryptocurrency, a legal tender, which allowed the public to use Bitcoin to buy regular goods and services. Cryptocurrencies are mostly used for cross-border transections because of very less transfer fees.
The first cryptocurrency, Bitcoin, was launched in 2008 and values around US$20,000 as of now. Other famous cryptocurrencies include Ethereum, Ripple and Cardano. Bitcoin is by far the biggest cryptocurrency with market cap of over 371 billion US dollars.
Advantages of Cryptocurrency
Avoid unnecessary personal interaction
While making transections with cryptocurrencies, as opposed to conventional banks. users don’t need to provide any unnecessary personal information. This protects information of the users from being shared with the third parties without their consent.
Based on fact
Most of the cryptocurrencies are built on the technology know as Blockchain. Blockchain secures the user transections. The transections over Blockchain are checked and verified by large number of real people.
Easy to use
Cryptocurrencies make it very simple to transfer funds between the parties, that too without involvement of any intermediaries, such as banks. As compared with conventional mods, such as MasterCard or Visa, the transections fee associated with cryptocurrencies are also very less.
Reality based services
Cryptocurrency payments are irreversible. This saves the merchants from being defrauded by the customers.
Disadvantages of Cryptocurrency
Cryptocurrencies are highly volatile. Their prices spike and dip very fast which make investing in cryptocurrencies extremely risky. If you are someone looking for stable returns on your investments, cryptocurrency might not be best bet.
Although cryptocurrencies claim to be anonymous form of transection, the transactions are actually traceable. Cryptocurrency transections leave behind a trail that can be traced by the governmental agencies such as Federal Investigating Bureau.
Large number of MIT
Since cryptocurrencies are decentralized, their wealth is supposed to be distributed among many people on the Blockchain. However, an MIT study showed that around a thousand people own about 50 percent of the Bitcoin.
Cryptocurrency is not regulated in most of the countries, which mean that there is no oversight on it. Until cryptocurrency is approved and regulated by the governments around the world, cryptocurrency investments will be highly risky.
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