Bitcoin is still very much a mystery to many people, considering its tenth anniversary. The crypto currency has, however, been gaining more and more attention for some years now and is an important anchor point for the growth of digital payment methods. This digital currency is gaining immense popularity and mass acceptance globally. As the popularity of Bitcoin and other cryptocurrencies is rising, so is the interest of individuals to learn more about it. There are different advantages and disadvantages of Bitcoin which I am going to mention below.
Pros:
Personal and Anonymous
There are absolutely anonymous and private Bitcoin transactions. In comparison to bank transfers, where transactions can be traced and identified, bitcoin transactions are not recognizable. Only the addresses of the bitcoin wallet on which the payment was sent and received can be identified to an individual.
Freedom of payment
The ultimate freedom is given by paying with Bitcoins. In any part of the world, Bitcoin can be transferred to any person. No middlemen in between. No holidays/strikes for banks. No restrictions or borders. No cap on payments.
Minimum Transaction Fee
There are very low and often no transaction fees at all to pay through Bitcoin. All depends on the person’s priority. Compared to any financial intermediary or digital wallets, if a person wants his/her transaction to be processed quickly, he must pay a transaction fee that is still very low.
Less risk
Bitcoin transactions are safe, permanent, and do not include confidential or personal information from any customers. This protects retailers from fraud or fraudulent chargeback losses.
Speedy Transactions
Bitcoin transactions, when compared to banking networks, are very fast. A transaction with Bitcoin is as easy as an e-mail and can be processed in 10 minutes. It can also be processed automatically if they are “zero-confirmation” transactions, which means that the merchant assumes the risk of accepting a transaction that has not yet been validated by the bitcoin block chain.
Cons
Lower Acceptability
Several individuals are also unaware of Bitcoin. In order to benefit from network effects, more business entities embrace bitcoins every day, but the list remains limited and still needs to expand.
Inconstancy
Bitcoin prices are very volatile and are going up/down at a very high rate. Speculators want to take advantage of it, but real investors think that it is too dangerous, so not all investors invest in Bitcoins.
Development in Progress
Bitcoin software is in active development with several incomplete characteristics. To make Bitcoin more safe, convenient and available to the masses, new instruments, features, and services are being created.
Potential State Interference
Well, the government does not take away your Bitcoins, but may ban it in the country, which forces the shutdown of bitcoin wallets and businesses. Bitcoins are frozen in these wallets and it becomes impossible to access them.
Depreciation Intervention
Bitcoin can be an economic benefit as it is non-inflationary. But one potential negative aspect attached to Bitcoin because of its deflationary existence is that a massive recession could occur in Bitcoins if it falls into the hands of a speculator.
Laundering of Money
Bitcoins were originally used for money laundering and individuals working in black markets who did not want to disclose their personal details and secure payment. In money laundering, one source will collect money from middleman/intermediaries and pass it via Bitcoins to another source.