The Pros and Cons of Cryptocurrencies

Pros of Cryptocurrencies:

Lack of Control or Manipulation:

Since there are no third parties such as government, banks or financial institutions involved, this eliminates the possibility of control or manipulation. There is transparency and it’s free from the vying eyes of third parties.

Ease of Fund Transfer:

Transaction in Crypto is fast as lighting speed as compared to traditional currency. As there are no throwing parties, there are less hurdles to cross.

Potential for Quick Gain:

Rafael Oliveira said that the Crypto market has skyrocketed at an all time high and there are a lot of coins to invest in today. As the supply from miners increases, the demand for it increases as well which boosts the value. Hence, an increase in value and return.

Promote Cross-Border Money Transfer:

Cross-border transaction has been made easy, thanks to cryptocurrency. Cryptocurrency can be easily converted to US dollars, Indian Rupee, European Euro and many more. The fiat currency can be easily converted to Crypto, across different wallets or borders, which is then converted to the destination fiat currency. All at minimal transaction fees.

Hedge Against Inflation:

Many believe Crypto can help best inflation as it can’t be penetrated by external influences as compared to fiat currency which can loose value as it is being controlled by the government. Plus, it is not tied by any economy, or business. It is a world class asset that is highly sought-after across the globe.

Safe Online Transaction:

Crypto is supported by a blockchain ledger which can be very had to decode. This offers far better security and privacy than any other form of electronic transactions.

Cons of Cryptocurrencies

Promote Illegal Activities:

Cryptocurrency has become a useful tool in money laundering schemes and are associated with several online crimes such as fraud and drug trafficking. Because transactions are somewhat anonymous, detection of crimes or culprits become difficult.

Not Widely Accepted:

Cryptocurrency is still not accepted by many countries. While some have banned it’s usage, some countries are beginning to regulate. This makes investment in cryptocurrencies more risky.

No Return or Cancellation:

Even seasoned cryptocurrency investors can recall a time when they mistakenly sent funds to the wrong address or sent the wrong amount. Unfortunately, cryptocurrency transactions can be reverted or cancelled, Rafael Oliveira Bitcoin says. You best bet is check and double check transactions before you click send, Rafael advises.

Risk of Coin Loss:

For a strong security, users have a private key to access the digital tokens in their wallets. Loss of the key means of loss of access to the wallet. And loss of access is loss of coin which unfortunately cannot be recovered in any way.

High Cost of Mining:

As much as anyone can mine Crypto as much as there is access to internet connection, yet a lot of energy goes into mining. Infact, energy as large as one a whole country will consume. This means mining is only limited to large firms who can afford the energy consumption. Plus, high energy consumption can lead to a high carbon footprint.

Concentrated Ownership:

Although cryptocurrency are meant to be decentralised, power still lies in the hands of a few who are their creators. That is why these coins can still be manipulated by the highest holders which can result in price swings.