In the world of finance, today’s buzzword is cryptocurrency. After the success of Nakamoto’s brainchild, it seems as if every organization in the world is considering their own cryptocurrency. Just this past week, Facebook announced that it may issue a cryptocurrency in 2020 – GlobalCoin.
With the world in seeming awe at the world of cryptocurrency, what are the advantages and disadvantages of Bitcoin? Here’s a look.
Listed in the detail above are 5 advantages to Bitcoin. Addressing from top to bottom, the first advantage to Bitcoin is freedom in payment. Bitcoin makes it possible to send and receive money from anywhere in the world and anytime. The currency is truly borderless. There is no central authority over the Bitcoin network, making it completely control free.
The second advantage of Bitcoin is control and security. The world’s most well-known cryptocurrency puts users in control of their transactions, which helps keep the network safe. Fees are completely transparent. Bitcoin payments require approvals tied to personal information, although that personal information is kept private from prying eyes.
The third item on the list is transparency. Bitcoin information is easily viewable by anyone willing to watch the general ledger. What is visible is one’s public address, which means anyone at anytime can verify transactions on the Bitcoin blockchain.
The fourth advantage of Bitcoin is very low fees. Depending upon the platform one chooses for Bitcoin transactions, the fees are either zero or very low. In some cases, Bitcoin owners may choose to allow fees on a transaction in order to speed up a transaction.
The fifth advantage of Bitcoin is that there are fewer risks for merchants. Because transactions conducted using Bitcoin are not reversible, do not contain personal information, and are secure, retailers are protected from potential fraud. Amazingly, Bitcoin enables individuals and businesses to do business where crime rates and fraud may be rampant, but because of the public ledger nature of Bitcoin, the system is hard to cheat.
Three disadvantages are listed. The first is that Bitcoin has a lack of awareness and understanding. This unawareness makes individuals still skeptical of accepting Bitcoin.
The second disadvantage of Bitcoin is risk and volatility. Bitcoin prices, like some stock prices, fluctuate considerably. This volatility makes some businesses a little weary of accepting Bitcoin payments.
The third disadvantage is that Bitcoin is still developing. Anyone that has used Bitcoin will tell you that all the potential features of Bitcoin as a currency still have development in the works. The needed work also adds to the skepticism of Bitcoin credibility.
Overall, Bitcoin appears to have a bright future, although the risks associated with Bitcoin trading should not be thrown aside.