Benefits of cryptocurrency:
Cryptocurrencies are unlike any other asset and they are using new blockchain technology for humanity and which has made it a competitive alternative to bank transfers and electronic payment systems, and even government money. Compared to existing financial instruments, cryptocurrencies have a number of advantages.
Most cryptocurrencies operate in a decentralized manner, depending on their algorithm, and they are not under the control of government bodies also all communication centers have the same rights and are equal to each other. And in networks such as Bitcoin, even developers and cannot change the algorithm of their operation.
- Low transaction costs
Reducing network maintenance costs allows you to significantly reduce transfer costs. Unlike banking and electronic payment systems and users have the ability to independently set the size of the commission and even send transactions without it.
- Fast payments
Cryptocurrency transactions have a high processing speed. Moreover, after adding a transaction to the blockchain, it becomes irreversible. The irreversibility of transactions helps prevent the falsification of records and fraud in the system.
Privacy is one of the main advantages of cryptocurrencies. To use the system, you do not need to provide any personal data, which allows you to remain anonymous and hide your costs. The government, financial institutions, or marketing companies cannot know about your operations.
- You are the sole owner of your money
Access to crypto-coins on the wallet can only be obtained by providing a private key. Which is only held by the owner. This means that no one can write off coins from the account or freeze their movement.
Cryptocurrencies can become a way to protect your capital. For example, if the bank where the savings were kept declares bankruptcy or the government fulfills its obligations in bad faith. The coins in the cryptocurrency wallet remain subject only to the user and become financial insurance.
- Reliable data protection
When paying for goods and services. Then used against the owner. In cryptocurrency transactions, no personal data is transferred to the seller. So you can be sure that the information will not fall into the hands of intruders.
- Simple and affordable
In fact, they are available to everyone. Anyone can start using cryptocurrencies, even without technical skills and understanding of the system.
Disadvantages of cryptocurrencies:
After studying the advantages of cryptocurrencies, we can unequivocally state that it is a scalable technology that has great potential for development. But despite all the advantages, like any technology, cryptocurrencies are not without a number of drawbacks:
- High volatility
According to experts, this is one of the characteristics of cryptocurrencies that prevents their globalization. Currently, the rate of cryptocurrencies is very volatile and can move quickly over a wide range. It is likely that the initial volatility is caused by the novelty of the asset and as the number of users increases. The cryptocurrency rate will become more stable.
- Risk of piracy
Cryptocurrencies exist digitally, which means they can fall prey to cybercriminals and also cryptocurrency services must have a high level of security to prevent theft. Note that this vulnerability is not caused by the peculiarities of cryptocurrencies. But by the security of the storage of access keys.
Additionally, cryptocurrency networks are susceptible to the so-called 51% attack. That person has the right to make independent decisions about transactions. This situation is fraught with double-spending, discouraging transactions from other users, and selfish mining.
- Criminal use
Confidentiality and decentralization of crypto-currencies. It is attractive to the underworld and a means of money laundering. The saddest example was the use of Bitcoin to pay for drugs and forged documents on the Deep Web Marketplace. But according to this principle, you can endanger the cash, because it also participates in criminal schemes.
Cryptocurrencies are a new technology and are the reason for the modernization of the economy. Already now, a large number of people are using crypto-coins for payment and participating in their products, and making money from the volatility of the market.