Advantages And Disadvantages Of Bitcoin

925 Words4 Pages
Bitcoin is a technology comparable to traditional currency, but with unique features making it one of a kind. It is a solution for transaction problems that exist in the digital world. The technology’s characteristics make for advantages that benefit individuals who adopted the peer-to-peer system. These advantages obviously outweigh the risks posed by common currencies
Advantages
• Untraceable – This poses both as a risk and benefit for Bitcoin users. One of the comforts it provides is its inability to be traced by any concerned governing bodies. All bitcoins are out of the reach of organizations, as they are ultimately owned by the user and the user alone. Furthermore, Bitcoin transactions allow for a user’s full anonymity. Yes, the transactions
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Disadvantages
• Technicality – Bitcoin is not exactly the go-to currency for the layman, mainly due to its sophistication that exhibits an intimidating status. The technology requires a certain degree of understanding before it can be employed. Nevertheless, this is one disadvantage that can be leaped anytime; endless information that tackles Bitcoin is at anyone’s disposal with the presence of the Internet.
• Untraceable – The double-edged trait of Bitcoin is found in this feature, as it attracts criminals who launder money, and purchase illegal items over the internet without the risks of being traced. This element may bring unwanted attention from the government that could possibly outlaw virtual currency.
• Too compact – If credit cards are stolen or someone hacks into your bank account, there is still a good chance to recover what was lost as banks offer services that exclusively cater so such issues. With Bitcoin, every user has to be careful where they place the digital coins, be it a hardware wallet or cold storage, safety precautions should be followed at all times. Keeping backup data of your wallet addresses is one measure that may help reduce this
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Not every e-commerce or online merchants accept the virtual currency as payment, which make options a little less for its users. However, online exchanges are readily available should you opt to convert bitcoins to fiat money in any case.
• Volatility – Currency, the prices of Bitcoin go up and down in a seemingly unpredictable manner. Throughout its existence, prices have skyrocketed to above $1000, and now settling to a number just shy of $300. This unpredictability may turn off potential users. Although this aspect is placed as a disadvantage, there are instances where the volatility of Bitcoin is useful, namely for binary options and forex trading where these situations prove to be an advantage for traders.
Clearly, these advantages obviously outweigh the risks posed by common currencies. The drawbacks of Bitcoin are normal and unavoidable. The beauty of it is these disadvantages can be smoothened out as time passes. Innovation is always around the corner, and Bitcoin awaits these improvements that will aid its applications for mainstream
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