Here is the list of pros and cons of Bitcoins
So Lets discover the advantages and Disadvantages of it but first we must introduce the Bitcoin
What is Bitcoin?
Bitcoins is the world’s first decentralized digital person-to-person cryptocurrency and is considered to be a revolution In present currency/financial markets. Also Bitcoin was start in 2009 by a mysterious programmer under the pseudonym “Satoshi Nakomoto”.This digital currency is gaining huge popularity worldwide and mass adoption. As the popularity of Bitcoin and other cryptocurrencies is increasing, so is the eagerness of people to know more about it. Bitcoin has various advantages as well as disadvantages. We shall discuss the same in this article, in which I have listed out some of the benefits of Bitcoins.
List of advantages and disadvantages of Bitcoins
Benefits of Bitcoins
- Anonymous and Private
- Payment Freedom
- Low/Minimal Fees
- Lower risks for merchants
- It’s fast
- its safe People can’t steal your payment information from merchants
- You are able to make your own money
Anonymous and Private
Bitcoin transactions are completely anonymous and private. Unlike in payments through the bank, where the transactions can be tracked and identified, bitcoin transactions cannot be identified. Therefore A person can only know the addresses of the bitcoin wallet on which the payment has been sent and received. But to whom these addresses belong, cannot be identify. It’s like payment to a particular bank account can be track but to whom these accounts belong cannot be known. ( but if a person uses the same bitcoin address for every transaction for a long period of time, there is a possibility that the person can be tracked)
Paying through bitcoins provides the utmost freedom. So Bitcoin can be transfer to any person in any part of the world. No intermediaries in between. And no bank holidays/strikes. No boundaries or borders. No payment limit.
Paying through Bitcoin has very low and sometimes no transaction fees at all. It all depends on the priority of the person. If a person wishes that his/her transaction gets process fast, he has to pay a transaction fee which is still very low as compare to any financial intermediary or digital wallets.
Lower risks for merchants
Bitcoin transactions are secure, irreversible, and do not contain any customer’s sensitive or personal information. So This protects merchants from losses caused by fraud or fraudulent chargebacks.
Bitcoin transactions are very fast if compared to banking channels. A bitcoin transaction is as fast as an e-mail and can be processed within 10 minutes. Also, it can be instantly processed if they are “zero-confirmation” transactions, meaning that the merchant takes on the risk of accepting a transaction that hasn’t yet been confirm by the bitcoin blockchain.
It confirmed transactions are those which take at least 10 minutes to process. Credit Card or digital wallet services also provides instant approved transaction services but for this, they usually charge hefty fees, which is not in the case of Bitcoin as mentioned above. Bitcoin has very low transaction fees even for being super fast in terms of processing.
its safe People can’t steal your payment information from merchants
Perhaps this is the biggest benefit of Bitcoin. Most online purchases today are made via credit cards, debit cards, requiring you to enter all your secret information (the credit card number, expiry date, and CSV number) into a web form. This is why credit card numbers are regularly being stolen.
Bitcoin transactions, however, don’t require you to give up any secret information. Instead, they use two keys: a public key, and a private key. The public key, as the name suggests is public and anyone can see it (which is actually your bitcoin address), but your private key is secret. When you send a bitcoin, you ‘sign’ the transaction by combining your public and private keys together, and applying a mathematical function to them. This creates a certificate that proves the transaction came from you.
Perhaps, this is the reason why Bitcoin is call the Future of Money. Generally, the central government can get fiat currencies print as much as they want. When the economy is slowing down it is not able to pay off it’s national debt, the government orders to print more currency and inject it into the economy.
This causes the value of a currency to decrease as more people have more currency. Also printing more notes creates inflation and increases the prices of the commodity. It is because now more people are willing to pay for a particular commodity and the seller has to increase the price in order to make the sale. Thus, the person who had gained when the government injected more currency can now buy crypto with Commonwealth Bank more but those people who were not benefitted from have limited currency and now the prices of a commodity have also increased.
You are able to make your own money
As the central government can print its own money, similarly any person can also produce bitcoins by himself. This can be complete by mining bitcoins through computers. It is not any kind of physical mining. Bitcoin mining is simply a case of leaving the computer switched on, and keep the bitcoin mining software running. Read more about Bitcoin Mining.
Well, the above was just the benefits of Bitcoin. But it also has some disadvantages as well which are mention below.
Disadvantages of Bitcoins
- Rate of acceptance
- Ongoing development
- Possible government intervention
- Deflationary and Inflatable
- Lack of recourse
Rate of acceptance
Many people are still unaware of Bitcoin. Every day, more business organizations are accepting bitcoins but the list remains small and still needs to grow in order to benefit from network effects.
Bitcoin prices are very volatile and increases/decrease at a very high pace. Speculators wish to take advantage of it but genuine investors think of it as too risky and therefore all the investors do not invest in Bitcoins.
Bitcoin software is with many incomplete features in active development. New tools, features, and services are being develop to make Bitcoin more secure, convenient, and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance.
Possible government intervention
Well, the government may not take your Bitcoins away but can ban them in the country, which forces bitcoin wallets and companies to shut down. The bitcoins in these wallets are frozen and access to them becomes difficult.
Deflationary and Inflatable
We discussed that how Bitcoin being non-inflationary can be an advantage to the economy. But one possible negative factor attached to Bitcoin because of being deflationary is that if it gets in the hands of a speculator a huge recession will come in Bitcoins.
Bitcoins are limited in number and if the major chunk is held by speculators and investors, they will hold it for a longer period of time and won’t release it in the market. When the supply of bitcoin will be short and demand continues to increase, it will increase the price of Bitcoins, and then the speculating investors may get benefited.
Lack of recourse
If you lose your bitcoin wallet, you have lost all of your bitcoins in that wallet. You cannot regain it and they are simply lost forever until and unless you have backedup the wallet with a backup phrase code. This backup phrase code can be use to recover the lost bitcoin wallet balance.
In case a credit card/debit card stolen, we can call the merchant to cancel the card and request a new one but in the case of Bitcoins, as it is decentralized and no one has control over it, we don’t have any person/organization to call.
Overall Bitcoins may have many advantages and disadvantages but it is up to the people and society in which ways do they use them.
I hope you have learned some of the benefits of Bitcoins as well as some of the disadvantages of bitcoins through this article .You can Visit our site section below.