With the technology revolution taking place, cryptocurrency is being seen as a positive addition on many fronts. Cryptocurrency has been around for a while now and has gone from strength to strength with numerous people investing in it. In addition, it has been praised by those who hold an interest in it as it gives them independence from government control over the money supply and payment mechanisms.
Cryptocurrencies have become common amongst those who invest as they can exploit market arbitrage opportunities. Cryptocurrencies allow anonymous transactions to take place between entities which makes some more favorable than others depending on the terms of the arrangement between the parties involved. You can also explore Today Profit for gaining authentic information about profitable crypto trading.
Other benefits include lower transaction costs and faster transfer times when compared with other methods of payment such as cards or e-wallets.
Cryptocurrencies are also seen as an excellent hedge against inflation by investors who value holding assets in this form.
Cryptocurrency can be considered to have a number of disadvantages when compared with fiat currencies.
Cryptocurrencies are unstable in terms of prices, especially in times of crisis which makes them unsuitable for use as a day-to-day method of payment.
Cryptocurrency is susceptible to market manipulation due to the fact that there are no certainties on what will happen next within the financial markets.
Cryptocurrency lacks security features such as chargebacks meaning that scammers have more room for maneuver with cryptocurrencies than they would have with other means of payment.
Cryptocurrencies are not easy to access for everyone due to their fluctuating nature which means that low-income earners may find themselves unable to access them.
Cryptocurrency as an investment or a way of paying for goods and services.
Cryptocurrency has also been known to be used by those involved in illegal activities such as money laundering and drug trafficking due to the fact that cryptocurrencies allow anonymity which prevents law enforcement agencies from tracking suspicious transactions.
Cryptocurrency is something that will continue to evolve over the years and it’s certain that we’ll see much more of it as time goes on, creating new pros and cons along the way.
The benefits
- Cryptocurrencies allow anonymous transactions.
- Cryptocurrencies allow the exploitation of market arbitrage opportunities.
- Cryptocurrencies give freedom from government control over the money supply and payment mechanisms.
- Cryptocurrencies are excellent hedges against inflation.
- Cryptocurrencies allow transactions to take place between entities without government control.
- Cryptocurrencies have lower transaction costs and faster transfer times than other methods of payment such as cards or e-wallets.
The Cons
- Cryptocurrencies are unstable in terms of prices, especially in times of crisis, and therefore unsuitable for use as a day-to-day method of payment.
- Cryptocurrency is susceptible to market manipulation due to the fact that there are no certainties on what will happen next within the financial markets.
- Cryptocurrency lacks security features such as chargebacks which means that scammers have more room for maneuver with cryptocurrencies than they would have with other means of payment.
- Cryptocurrency is not easy to access for everyone due to its fluctuating nature which means that low-income earners may find themselves unable to access Cryptocurrency as an investment or a way of paying for goods and services.
- Cryptocurrencies have also been known to be used by those involved in illegal activities such as money laundering and drug trafficking due to the fact that Cryptocurrencies allow anonymity which prevents law enforcement agencies from tracking suspicious transactions.
Conclusion
Cryptocurrency is a digital currency that is not issued by any government and it is encrypted in order to keep transactions secure. Cryptocurrencies such as bitcoin, litecoin, and Ethereum are gaining popularity worldwide due to their decentralized system of transaction verification and international availability.
However, there are many downsides to using cryptocurrencies. Cryptocurrencies can be used for illegal activities such as money laundering because they do not go through the same security checks as banks and hence cannot be tracked easily by law enforcement agencies (Sistema). Cryptocurrency owners do not have to provide personal information like bank accounts when transferring digital currencies which makes it harder for governments to monitor cash flow (Hileman).
If you would like more information on Cryptocurrency, please check out; Cryptocurrency Market Capitalizations – Exploring The Cryptomarket (April 2018) Blockchain Technology Explained, What Is A Distributed Ledger? (April 2018) Cryptocurrency Glossary, and Cryptocurrency Jargon Buster (April 2018).
