Cryptocurrency has seen a rise in the past few years. Bitcoin is the oldest cryptocurrency of all. Now, this is for the cryptocurrency investors, who are curious to know if it’s a good choice to invest in bitcoins? Or if it’s worth it?
It’s important to understand the pros and cons of bitcoin as this can help fulfil your curiosity.
Pros of bitcoin include:
- User anonymity
- Mobility in payments
- No third party interference
Cons of bitcoin are:
- Limited utilization
- Transactions are irreversible
- No government regulations
Let us discuss the pros and cons a little bit in detail for better comprehension.
- User anonymity:
Anonymity is the biggest concern anyone would have who trades bitcoin on the blockchain network. Although it does not provide complete anonymity, bitcoin users are given alphanumeric strings and they are identified by those numeric addresses. Users can have multiple keys. And with this, the privacy of the user is ensured, and the transactions are safe from public view. The transactions cannot be traced back to the user. Only you would be able to know how many bitcoins you have, being the wallet owner.
The transactions are viewable but blockchain technology is such that it keeps you safe from fraud and potential threats. This ensures transparency on the blockchain network.
Even if the address of the anonymous Bitcoin wallet goes public, bitcoin wallets facilitate the generation of new wallet addresses to keep your personal information safe. You do not give out your personal information while signing up for bitcoin transactions, so there’s no risk of your details leaking.
- Mobility in payments:
With bitcoins, you do not require to go to a bank to make a transaction. You can send bitcoins to or receive from anyone and anywhere in the world without actually having to leave your seat.
No third-party interference:
Bitcoin being a decentralized currency, is not regulated by a government or central bank. Meaning that the government won’t freeze or claim any rights over your coins. This way the users have control over their money. This is one of the main advantages of the cryptocurrency that the users on the blockchain network have.
It only takes a couple of minutes or so to transfer bitcoins to other users. It can be utilized to purchase goods and services from the places that have started accepting bitcoins. This has made transactions overseas, meaning spending money and exchanging currencies has become a lot easier due to this. Selling bitcoins is also easy and you can quickly sell your bitcoins.
These are the benefits you get when you trade bitcoins. These are probably also the features that have gained cryptocurrency the much-needed popularity that it has now.
The cons related to Bitcoins are also there:
- Limited utilization:
The one limitation of bitcoins is that although it’s growing too fast and there’s a growing number of places and companies that accept bitcoins. But it’s still not accepted widely and that leaves very less room for bitcoin owners to utilize the currency.
- Irreversible transactions:
There is a lack of security since this currency is decentralized and is not regulated by any Institution or central bank, also the transactions are anonymous. Transactions of bitcoin are irreversible, meaning once a transaction is completed, nothing can be done if it’s sent to the wrong recipient or it’s the wrong amount that is sent.
- No government regulations:
No government interference is viewed as a benefit, it is also considered as a disadvantage. Bitcoin investments are not regulated, meaning you cannot turn to any authorized institution in case your bitcoins are stolen, or damaged or someone has made a hefty transfer from your account, these transactions are not protected under any regulations. All of this together makes Bitcoins more prone to scams and frauds. This is why this currency is known as the riskiest currency to trade.
Now, when you know the pros and cons of trading in bitcoins, I hope you have a better understanding of whether or not to invest in bitcoins.