Cryptocurrencies are continuously on the rise and hence it is important to know what is cryptocurrency. It is a digital currency that has revolutionised the business because it uses blockchain technology to store information that can’t be tampered with by anyone. This alternate coin can be used in lieu of normal currency wherever they are accepted. In the recent times, this e-money is used to complete a purchase transaction. This digital currency is an intangible asset because the one who owns it can’t touch, feel or even keep them in a physical vault to safeguard them.
There are many advantages and disadvantages of using a cryptocurrency. Let us mentally grasp what are the advantages that allure the people into the cryptocurrency Ecosystem.
- Nonexistence of inflation: Inflation is non-existent In the cryptocurrency ecosystem. The main factor that threatens the normal currency market is monetary inflation. But, in the virtual currency system, there is no tax inflation because of the unlimited supply of these coins. The lack of central authority to control the coin market enables any participant to supply more money to this market. This is the main feature that attracts the people to the cryptocurrency system. Furthermore, the value is going to increase due to the proof of stake protocol that acts as a check the phenomenal surge in price in an economy.
- Easy transborder transfer of money: This system doesn’t restrict you from working from a place of convenience. Anyone can transfer money from one country to another, within a blink of the eye. You can sit in Japan and render services to a company in the US. It is more interesting to know that money can be transferred the moment you click your computer button. The cost of sending money is very high in SEPA and SWIFT. Moreover, you will be wary of filling in lots of forms. Cryptocurrencies make your work easier by transferring money at a great speed and also at a reasonable cost.
- Secrecy of private information: The digital wallet used for trading is highly secured using a cryptocurrency protocol. Your personal details are safe unless hacked by a proficient hacker. This wallet can only be used by the person concerned to buy or sell coins using it.
- Transparency: No one can purloin the account unless you share your details with your nearest peer. There were cases reported wherein some people snooped into the system by unfair means. They were brought under control immediately due to the increasing transparency in the whole system.
- Difficult to comprehend: Since these types of currencies are slowly moving out of the shadows, it will take a little stretch of time to be recognised as a pretender to the fiat currency system.
- If you store money in the digital wallet, you should always call to mind the password because forgetting it may cost a lot of your money. Since this is not legalised in any economy, no lawyer can represent to help you to retrieve your lost money.
- Uncertainty: Cryptocurrency is considered as a bubble. Nobody can predict the fate of these currencies in the future.
These are the main advantages and disadvantages of cryptocurrency.