If you haven’t heard the word ‘bitcoin’, you probably have been living under a rock. The ‘new gold’ has caused a lot of controversy since it was created in 2009 by an anonymous programmer only known as ‘Satoshi Nakamoto’. This digital currency has sparked a lot of arguments with some taking the stance that it isn’t good to invest in and others proactively investing in it.
As Bitcoin is still in its early stages compared to other fiat currencies, time will tell if it’s here to stay or is just a blowing storm. It is no different from any other high-risk investment in terms of its practical application. This means that whether or not you should invest in it ,is determined by your risk tolerance and investment objectives.
One thing is for sure, whatever your stance on bitcoin and other cryptocurrencies in general is, it’s best to make an informed decision. You can check our series of blogpost about Bitcoin and other cryptocurrencies to help you. Meanwhile, let us look at the general pros and cons of bitcoin, and understand why some people advocate for it, and why some don't.
PROS OF BITCOIN
Bitcoin has a lot of advantages. The meteoric rise it gained over the past few years is definitely one of them but let’s get to other parts as well. For example;
1. Fast and inexpensive transactions:
With bitcoin, it only takes a few minutes to send any amount of money to any destination in the world. Just like the internet and email, it has no geographical restriction. If you were to transfer money from your bank account to another country, you’ll definitely pay a significant amount for charges, whereas with bitcoin, it is negligible or non-existent. This helps you in creating wealth as you spend less.
2. Decentralization
Bitcoin is a decentralized currency and so cannot be regulated, valued, created or distributed by any government or central bank. This truly makes it a currency for the people, removing the power from Fiat currencies. No one has the authority to freeze, charge, or demand your coins. They can't be stolen, and the government can't seize them under any condition.
3. Security and Transparency
Bitcoin enables buyers to conduct transactions without disclosing any confidential financial information, thereby keeping their accounts safe. The blockchain technology it uses hides transactions using cryptography, so transactions remain confidential. It is transparent in that it allows users to conduct transactions with complete freedom and users have complete power over it.
4. Profit:
As volatile as bitcoin and cryptocurrencies are in general, you simply cannot deny the fact that people have made massive profits from it over the years. Bitcoin in its early stages started trading at less than a dollar and now is worth over thirty thousand dollars. It has definitely created wealth for people.
CONS OF BITCOIN
1. Volatility:
Bitcoin’s volatility has been experienced throughout the years with rapid rise and falls in 2017, 2018 and most recently, 2021. This instability of the digital currency, unlike Fiat currencies, makes people wary of investing in it. Some investors are willing to take the risk and others aren’t because of the potential of huge losses. That is not to say that the volatility does not go both ways, because as much loss you can make can also translate to as much profit you can gain.
2. Lack of regulation and backing:
As Bitcoin has no regulatory oversight, you could be exposed to fraud and malpractice. With this, some governments do not support any form of cryptocurrency and there have been crackdowns on some crypto exchange companies over the years. It is best to stick with a crypto exchange platform that is duly registered, and you can trust, like Cordial Exchange.
3. The threat of online hacking:
Bitcoin is traded using mobile apps and websites and so this leaves them susceptible to hacking and theft of all your investment as hackers can gain access to apps and websites. This con has thankfully been address in some exchange platforms like Cordial Exchange, where security is paramount, and your rypto is highly safe in your bitcoin wallet.
4. Crypto Wallets can be lost:
If a virus affects your wallet file, you lose all your bitcoin. You could go from a rich bitcoin investor to bankrupt in a minute with no way to recover.
As you can see, Bitcoin has its advantages and disadvantages but one thing is for sure, you need to know what you’re getting into, gain valuable knowledge and make your decision. You can gain and you can lose with bitcoin, but the losses can be significantly reduced when you have accurate information and a good strategy. Now that you have more information on bitcoin, cgo ahead to share this article to enlighten others too.
As Bitcoin is still in its early stages compared to other fiat currencies, time will tell if it’s here to stay or is just a blowing storm. One thing is for sure, whatever your stance on bitcoin and other cryptocurrencies in general is, it’s best to make an informed decision.
