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The Advantages and Disadvantages of Cryptocurrency Investing
Investments in digital currency, aka cryptocurrency, are increasingly prevalent throughout the world, including in US. Investing in cryptocurrency has begun to be in great demand by the public since the popularity of Bitcoin.
You need to know, Bitcoin itself is one of the Cryptocurrencies that has begun to be known to the public since the rise of the WannaCry virus. In this case, the victim who contracted the WannaCry virus was asked to pay a certain amount of Bitcoin to the hacker to restore the encrypted data. Now, this certainly provides a new perspective on cryptocurrency regarding its advantages and disadvantages.
1. Cryptocurrency Advantages
1.1. Avoid Currency Counterfeiting
The advantage of cryptocurrency is to protect against counterfeiting. One of the problems with banknotes and credit cards is that they are prone to theft and counterfeiting. Technically, there is the term "double-spend" in the digital world, which means that using the same money, a person can make transactions for two different things. Well, the blockchain scheme in cryptocurrency does not allow counterfeiting of currency.
1.2. Protect Privacy
Often some people do not want to be identified during transactions for privacy reasons. Not that people who want to maintain privacy like this are wrong. There are many reasons why people want to do this, one reason being fear of being misused.
For example, if you transact with a merchant online, debit or credit card data is commonplace for the merchant to know. Then, what if the merchant is not responsible, or hackers compromise their system, and then your data and other customers are stolen?
With cryptocurrency, transacting parties can only determine the nominal transaction, transaction time, and cryptocurrency wallet address used without knowing who owns the cryptocurrency wallet. Other investments rarely hold the advantages of cryptocurrency.
1.3. Speed and Ease
For information, It deliberately created cryptocurrency to solve the complexity of conventional financial and banking transactions. By using cryptocurrency, you can make transactions more quickly and practically.
For example, to transfer to an overseas account, you usually have to make the transaction on working days and hours. As for transactions using cryptocurrency, you can do it at any time without having to wait for working hours and days.
2. Disadvantages of Cryptocurrency
2.1. High Volatility
Cryptocurrency is a new currency that has recently been popular in the world community. The cryptocurrency itself has only been going on for about ten years. Therefore, the volatility of this type of currency is still very high. Currency values can suddenly increase drastically. Likewise, weight decline can also occur very quickly.
You cannot predict exactly how the currency will value in the future. The potential for losses could also be more significant. Sometimes the exchange rate of cryptocurrency such as Bitcoin is also considered unreasonable because it is too high. Volatility is one of the drawbacks of cryptocurrency.
2.2. Transactions are Somewhat Complicated
Some people still consider cryptocurrency transactions complicated. This is because you have to create a cryptocurrency wallet, manage shipping costs, make backups of private keys, and so on before transacting with cryptocurrency. This is natural because the cryptocurrency system itself is not known to many people.
Therefore, the application of cryptocurrency will be more difficult for people who are not internet literate. But imagine, with what is considered complicated, there is complete control that you get from cryptocurrency. You alone act as a bank for the transactions that are carried out.
Well, I hope this information is useful. Those are some of the advantages and disadvantages of cryptocurrency. This information allows you to understand more deeply about this currency.