Top 3 Advantages And Disadvantages Of Cryptocurrency Payments In The New Economy

We have talked about Cryptocurrencies (Bitcoin) in the last two articles. There we have learned how the digital world is facilitating the growth of digital currencies, popularly known as Cryptocurrencies. This article is a short guide to help you know about the pros and cons of Cryptocurrencies and of investing in them. Before you proceed reading this article, we want you to read the previous articles, “Cryptocurrency, A New Era In World Economics”, and “Top 4 Most Potential Cryptocurrencies for The Year 2021” for an insight into the world of Cryptocurrencies.

Cryptocurrencies are simply a digital form of cash, then “Why is there so much controversy about it?”  So, without wasting much of your time, we will dive straight into the pros and cons of cryptocurrencies to learn more about them.

Here’s a list of top 3 advantages of using cryptocurrency for transaction:

1. Transparent Transaction

What we find the best about Cryptocurrencies is that the transactions of these currencies are stored in an open ledger, known as “Blockchain”. This means that though the identity of the users is unveiled, the transactions done can be viewed by anyone in the world. This vouch for a great societal change and accountability while taking care of the user’s privacy.

2. Absence Of Intermediaries

The exchange of Cryptocurrencies is also quite cost-effective. This is possible due to the absence of intermediaries. Intermediaries like banks take a charge of verifying and approving transactions. This will save the users a good amount of money every time they make a transaction as the charges are very less due to the absence of intermediaries. 

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3. Quick Accessibility 

Another thing that impresses us about Cryptocurrencies is that they can be accessible 24/7. The absence of geographical barriers has made this easy access possible. Transactions can be made in way less time for as low as 4 seconds to as high as 10-15 minutes (this varies for different types of currencies) and users can use it without using a computer. This is a key feature responsible for the widespread adoption of Bitcoin.

Unfortunately, this digital currency comes with a set of disadvantages as well.

Top 3 disadvantages of cryptocurrency as the future of digital payments that it carries are listed below:

1. Lack Of Security

What worries us the most about these currencies is that there is no security involved. Cryptocurrencies are quite expensive and thus there are tons of scammers out there who are ready to mine them illegally. They use several techniques and tactics like assuring higher profits/ returns to lure the users or by setting up infected website links or emails on the user’s system. 

Considering another scenario, if a wrong transfer is made in this field, the user cannot ask for the money back due to lack of evidence.  as the identity of the sender and the receiver Is not revealed, this is many times used for illegal activities. Thus security of the users is a grave concern while using Cryptocurrencies.

2. Fluctuations In Value

The nature of these digital currencies is highly unpredictable. Their values keep changing in the flick of a second. Therefore the returns or the profits do not remain the same always. These dramatic fluctuations affect the expectations of the investors. Some of them like “Bitcoins” are extremely sensitive towards micro-economic changes and thus there can be a drastic downfall in their value at times.

3. Comprehending Is Difficult

The creation of Cryptocurrencies involves the use of complex codes and technologies that is difficult to comprehend if you are not tech-savvy. The concept of decentralized financial systems and blockchains is hard to grasp without proper knowledge of coding. This is a threatening situation as scammers are taking undue advantage of investors or people who are taking their help to get a proper understanding of this field. 

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Final Thoughts:

Cryptocurrencies, a trend that has got a boom in recent times come with their own set of pros and cons. It is important to be informed about the same as it can be the next big thing in this era. Investors and financial analysts are taking great interest in this as the profits that can be earned from this are tempting. In this article, we have summed up a list of the pros and cons of Cryptocurrencies for a quick view. Hope you have found this article helpful. Let us know in the comments section what do you want to hear next from us.

Shreya

I am a student of Mass Communication and Journalism. I write on technology and cryptocurrency.

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