Bitcoins: pro and cons
Bitcoins are decentralized cryptocurrencies that are available globally through a digital platform. The transactions involving bitcoins use blockchain technology. It was created in 2008 and has been in the light ever since them. You get bitcoins for a process known as mining. As of now, you can use bitcoins for other currencies, services, and products.
Bitcoins are really helpful as:
- You get instant payments and transfers to anyone anywhere.
- These transfers can not be reversed for any reason.
- Third parties are really unnecessary for these transactions.
- It can not be manipulated by any other entity.
So what are the advantages of using bitcoins:
- Protect you from payment frauds
Bitcoin transactions offer payment security as once processed you can not undo the payments. This is really helpful where credit cards are used as a payment option.
- Lower chances of identity theft
As you use credit cards for processing transactions you give the merchant full control over your transaction history. However, when you use bitcoin you just give specific information that you need to process your payments. This is how you protect yourself from identity thefts as you only use your wallet ID rather than your personal details.
- Direct and instant transfers
As bitcoin eliminates the need for third party approvals, you get much faster transactions and much lower processing fees. You get safe and faster payment options as well.
- Access to several new markets
As there are several bitcoin services, all the people that are using the internet and mobile phones can create their own bitcoin wallets and start with bitcoin trading and exchange.
- Low transaction fees
Typically there are no fees involved in any bitcoin transactions as the miners are paid through newly generated bitcoin. However, there are several third party exchange services that are really easy to use and can charge you a minor fee in return for doing a transaction through their platform.
However, there are some downsides to this as well:
- Financially illegal
People still feel that bitcoins can be used for illegal activities. This is because there is no control of any government institution over bitcoin transactions. There are several cases of money laundering as well. Which is why the government is still hesitant to legalize bitcoins.
- Risk of losing money
There are lot of ways in which you can easily lose your money through bitcoins. For instance:
There is a serious lack of security for your bitcoin protection. Anyone can steal your bitcoin and you won’t be able to anything about that. There is no sure way of protection of bitcoins. However, you can use external hardware to protect your bitcoins. For online protection, you can get a private key for your bitcoins.
With increased regulations, the value of bitcoins gets fluctuated and this is why the value of this cryptocurrency gets affected.
As you get a fixed amount of transaction and speed, it is really difficult to see bitcoins as fiat currency.
There is a serious lack of applications for bitcoins which is why not every agency or service can use bitcoins.
- Extreme volatility
As we see bitcoins are extremely volatile which makes it really inconsistent with its value. Which is why bitcoins are limited to business trades. And why bitcoins nicht wirklich funktioniert.
You should consider all these factors as you get into the world of bitcoins.