Cryptocurrency is predicted to be an upcoming method of monetary exchange. Out of all the cryptos, Bitcoins are considered to be the most reliable and successful cryptos to date. But as we all know, everything comes with good and bad obstacles.
People are investing blindly in cryptos, but it is necessary to have a look at the surroundings of this new virtual market that everyone is going for. Let’s go through some advantages and risks involved with Bitcoin.
Advantages of bitcoin:
1) Low Transaction Fees: Unlike other payment methods like banks, bitcoin’s transaction fees are very minimal. People are widely choosing bitcoin for their payment method, especially when it comes to international transactions as the transaction fees are very less and it makes sense for people to receive money in it. People are also using bitcoin for purchasing items online or for any other online service.
2) No central or government involvement:
People are loving bitcoin as it has nothing to do with the central or government, which means even if a county is facing turmoil, then also the crypto will remain the same. It is considered to be a great method for merchants to secure their wealth because bitcoin allows an individual to convert their currency into bitcoin and hold on to it till their country’s currency becomes stable.
3) The future currency: People believe that digital currency will replace the government regulated currencies. Several people are considering Bitcoin because of its method of modifying technology & innovation.
After the above mentioned advantages of bitcoin but it is important to know the risks involved in digital currency too. So, let’s go through and have a look at the risks of bitcoin.
Risks involved in bitcoin
Fraud: As everything is virtual in cryptocurrency, we must consider that hacking could be one of the possibilities for online fraud. Merchants exchange bitcoins virtually and bitcoin is quite popular among buyers and sellers, so some of the transactions can be fake also.
Restricted Usage: Bitcoin is considered to be a new monetary exchange. Companies like Overstock, Monoprix accept cryptocurrencies. Moreover, travel companies like AirBaltic, CheapAir.com also involve Bitcoin. But not every company accepts bitcoin as an authorized exchange medium.
Small or no management: All we all know is that bitcoin is working without any strict rules and the central or government has no control over it as well. There is no tax on bitcoin that makes it a tempting opportunity for investors. But no government control can be dangerous for normal people as it can go to an extent where people bear huge financial losses.
Technology-Based: Bitcoin is fully based on technology as the coins of cryptocurrency are mined online and transacted through smart wallets. Cryptos are worthless without technology. Other physical currencies are collateral but in online currency, there is no physical collateral. On the other hand, things like gold, properties, or other possessions can be exchanged, but as cryptos are fully based on technology, there are more chances of online frauds and cyber threats.
A big question on investment: Merchants buy bitcoins with the intention of investment as they can withdraw it and can use it whenever in need. However, some people also consider bitcoin as a retirement plan, but with constant fluctuation and no strict rules, and null physical collateral, people can end up losing every penny they are spending in buying bitcoin. Also, bitcoin can skyrocket anytime and can multiply the investment as well. So it would be better to make investments small and carefully.
Cryptocurrency is still a new technology and the history of bitcoin is not very stable as well. With various fluctuations in the past, no one can assure the future of this digital currency. It could be the wisest or dumbest decision of anyone’s life. So, it is advisable to take every step with caution to secure the investments.
After going through the major advantages and risks involved in Bitcoin we can say that the future of Bitcoin is highly unpredictable and hence everyone should invest every penny wisely.