As you might know, Bitcoin is a concurrency and it works on a peer t peer system. This was basically started in the year 2009 and the currency is traded and bought online. There are many people and businesses who accept bitcoins as a payment option and the payments in Bitcoins are processed through block chain.
In addition to this, it is possible to mine the bitcoin by solving complicated mathematical equations on your computer. There are many mining devices available which are nothing but the GPUs and CPUs with high processing power. The better way to own bitcoin is to buy the bitcoin and that can be done with help of exchanges that are available on the web.
Just like the coin, Bitcoin also has two sides and one of them is a positive side while another one is a negative side. So let us now look at the pros and cons of Bitcoins.
Advantages of Bitcoin
1. Less Transaction Cost
The main advantage of using the Bitcoin is that there are very less transaction cost when you transfer a large sum of money. This is not true with the wire transfers or the inter-bank transfers as a lot of money goes in the fee as well as the taxes.
2. Private and Secure
Bitcoin transactions are also very secure and they can be carried out on the private network. The encryption keys enable the secure transactions which takes a lot of effort and time to be hacked so virtually it is impossible to get into the transaction details.
3. Investment Gains
There are people who are now millionaires and billionaires because of their investment in bitcoins. The main reason for this is that the price of bitcoin has climbed the ladder and it was recently at arecord high.
4. Easy Access and Payment
It is also quite easy to access the payment network for bitcoin and you simply need a bitcoin wallet to access and pay via bitcoins. You do not have to go through a long process at all.
5. Privacy or User
Today, all the transactions are being monitored by the government but the governmentcan’t monitor bitcoin transactions and hence it offers a lot of privacy to you. No one can find the details of the transactions made by you.
6. No Chargeback
There are cases when people processes a transaction and then they opt for chargeback citing absurd reasons or fraud. This is not possible in case of Bitcoins and people can’t opt for chargeback.
7. Independent of Geographical Boundaries
You do not have to worry about the currency or the exchange rates while transferring money oversea as bitcoin transaction is independent of Geographical Boundaries. This also leads to areduction in transaction cost.
8. Transparency in System
Bitcoin also offers a lot of transparency to the people using it. It is possible to view each and every transaction happening on the bitcoin network but at the same time, the details of the people are hidden.
9. Quick Way to Transact
There are times when transferring money through bank takes a long time but this is not the case with bitcoins. Transacting money through bitcoins is quick and you can make payments or receive payments in nick of time.
10. Encrypted Platform
Lastly, the bitcoin transactions are done over an encrypted network and all the data is encrypted before it is being sent on the network. The encryption promises secure transfer without the concerns about hacking or data leak.
Disadvantages of Bitcoin
1. Hard to Understand
One of the major reason to avoid Bitcoin is that the cryptocurrency is hard to understand and it is virtually impossible to analyse the fundamentals of the bitcoins like you can do in the case of stocks. Even the working of cryptocurrency is quite complicated and difficult to understand.
2. Acceptability in Market
The fact is that the bitcoins are not accepted widely in the market and hence you can’t rely on bitcoins completely. You need to have an alternative option with you so that you do not really depend on bitcoins.
3. Legal Issues in Countries
Many countries have stated that it is illegal to deal in bitcoins and hence trading bitcoins or paying with bitcoins can attract legal actions against the citizens. Some of the countries have also imposed high taxes on the capital gain from bitcoins.
4. Prone to Hacks
The system used for processing the bitcoins is encrypted but the bitcoin wallets are still prone to hacking. This makes it difficult to trust the bitcoins as you can end up losing a huge sum of money to a fraud.
5. Uncertain Conditions of Market
The price of bitcoin is also very uncertain and the future of the bitcoins is also very uncertain. This induces risk in the cryptocurrency and in addition to this, the price of bitcoins is highly volatile.
6. No Chargeback Possible
If there is a fraud after paying from a credit card then you can request the credit card company for a charge back but this is not possible in case of bitcoin and hence you may end up losing money to the frauds.
7. High Crimes Rates
There are many people who are using bitcoins for taking ransom from people. There is ransomware in the market which can leave people without the access to their data and the hackers can charge huge amounts in bitcoins.
8. Technology Still in Development Phase
The technology is still in development phase and that is certainly a problem. There are many new cryptocurrencies coming in the market and that could decide the fate of bitcoin in coming future. In addition to this, you can also expect certain changes which again induces uncertainty.
9. Money Laundering and Black Market
Bitcoins are a favourite mode of payment for the people who use the dark web and who purchase stuff from the black market. Do you know that it is possible to buy uranium and all sort of weapons from the dark web and the payment can be made in bitcoins? This can even lead to compromised national security.
10. Untraceable Currency
Lastly, one of the major problem associated with the Bitcoin is that it is impossible to trace the people behind any transaction. This acts as an advantage but it is also a disadvantage as it becomes difficult to nab the criminals because of this anonymity.
These were some of the advantages and disadvantages of Bitcoin and each and every technology has both the sides. It is up to you to decide if the advantages of the technology outnumber the disadvantages of the new technology and you can use any new technology accordingly.