What are the Advantages and Disadvantages of Cryptocurrency?

Disadvantages and Advantages of Cryptocurrency: A digital or virtual currency known as cryptocurrency is the main topic on the mainstream internet. Created by computer system employs cryptography to safeguard its transactions and regulate the generation of new units. The cryptocurrencies are the decentralized form digital currency, meaning uncontrollable by either a government or a financial institution.

The earliest and best-known cryptocurrency, Bitcoin, was developed in 2008. Essentially, cryptocurrency is a sort of digital currency that controls the creation of new units and employs encryption to safeguard its transactions.

Popular Cryptocurrencies

(a) Bitcoin

The bitcoin digital money and payment mechanism is basically the product of Satoshi Nakamoto’s imaginative mind. Blockchains are decentralized open ledgers where network nodes record and cryptographically verify transactions. Bitcoin is the most recognizable cryptocurrency around the world and one of the distinct for digital currencies that limit the maximum supply 21 million of it.

Because of its potential as a payment system and its price stability, Bitcoin is attracting interest from businesses and individuals all around the world. Bitcoin is a decentralized digital currency that may be used to make anonymous purchases of goods and services.

(b) Ethereum

Based on Blockchain technology, it is a software platform where individuals can create different digital technology. Ether is the native crypto currency powered by Ethereum blockchain. The creative mind of Buterin and Joe Lubin is behind in creating this project. They are the founder of blockchain software company, ConsenSys.  

(c) Litecoin

(d) Bitcoin Cash

(e) Ripple.

Advantages of Cryptocurrency

There are several reasons why investors love to engage in the cryptocurrency. However, the most important fact is that crypto eliminates the need for intermediaries or third parties like bank while transferring. It is one of the main reasons why certain investors embrace it.

With this feature, individual directly transfers their portfolio and asset with their negotiator easily. Talking about the same, fund transfers may also be less expensive because of fewer processing costs.

As cryptocurrency becomes more broadly accepted and enables mobile payments and accessibility for more individuals, it should provide increased payment convenience and decreased volatility.

Cryptocurrency supporters claim that because all bitcoins would have the same value at the same time rather than fluctuating in value depending on the country, exchange rate risk can eventually be eliminated.

Disadvantages of Cryptocurrency

(a) Cryptocurrency volatility is a major concern because prices have the inclination to rise and fall. Volatility in monetary terms is not advantageous because it makes crypto holders less likely to spend their money.

(b) Some coins can be used for unlawful conduct since they are anonymous and/or untraceable.

For individuals who can handle high volatility and risk, cryptocurrency is a solid investment, stated by Cody Garrison, a co-founder of Clearblock, a Web3 consulting company. He always states a crypto mantra: “Never invest more than you’re willing to lose.”

Is Cryptocurrency the Future?

I am pretty sure: if you are imagining the future, you might see realistic robots, autonomous vehicles, and 3D printers in every house. These are the future of the world. So, if you look these things in the future, you’re likely to see cryptocurrency as well.

Talking the same, it is the initial phase of cryptocurrency. There are several other significant things to come in the future. According to an expert, “Crypto adoption will continue to grow, especially among institutional investors and retail customers.” The expert also states that in the coming years, people may lead multicurrency lives in which they may save their money in a portfolio that includes bitcoin, UDSC, Ethereum, Dogecoin and other cryptocurrencies.”

In fact, Coy Garrison, a former SEC counsel and career staffer, agrees that crypto has a promising future. Saying more, Garrison declares that “I really believe that cryptocurrencies has a great future in the coming years. It is the natural next step in an ever-globalizing, ever-digitalizing world.”

He thinks that the way people exchange money could be completely transformed by digital currencies. Using cryptocurrency for international peer-to-peer payments, often known as remittances, is one area that will continue to grow, according to him. The World Bank claims that typical remittance companies charge consumers who transfer money home hefty fees that range from 5% to 9.3% of the transaction value.

Instead, people can use cryptocurrency to send money to friends and relatives who live abroad so they can meet basic requirements like food, shelter, and clothing. The best option for this use case may turn out to be stablecoins because of their one-to-one ties to fiat money and lower volatility.

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