Bitcoin as a currency is gaining more and more popularity among economic agents; however, it is still limited used. What prevented it from becoming a universal international means of payment from the moment it was created, and why, despite of its numerous disadvantages, it keeps afloat and is continuing to be introduced into the economy, we will cover in this article.
✅ Bitcoin is not controlled by any state or private entity. Blockchain is actually a register spread over many participants. Unlike banks, which may freeze your account or reverse a transaction, a blockchain let you fully control your savings.
❌ Nevertheless, this is also a disadvantage - since there is no regulation of this system, it is impossible for a user to protect themself from fraud or error, for example, if a coin is accidentally transferred to the wrong address, the money will simply be gone for good.
VOLATILITY AND DEFLATION
❌ Digital currency, not backed by anything, depends solely on user confidence in it, and any news may result in its crash. It discourages potential investors and slows down the widespread introduction of cryptocurrencies into the economy.
✅ On the other hand, with regard to long-term investments, cryptocurrency attracts investors with its deflationary nature. This is due to the very algorithm structure on which the bitcoin is based - you cannot farm more than 21 million coins, while fiat money can be issued in an almost unlimited amount.
CONTROL OVER YOUR CAPITAL
✅ Unlike fiat money, which your bank can give someone at interest or invested, as well as can be stolen “from a piggy bank”, virtual money belongs only to you. The main thing is to always remember the password from your wallet.
✅ The coin can be transferred from one person to another in a matter of minutes. The transaction time can vary depending on the fee you are going to pay miners. After sending to the Net, a transaction gets into the mempool, where it waits for its turn to be included in the block. The block weighs about 1 MB, and the transfer size may vary wildly, therefore, those transactions are processed first that have a higher unit fee, that is, the ratio of the fee to the transfer amount itself.
❌ But sometimes the digital currency transaction speed can be lower compared to internal bank transfers. If the network is congested, and the user has not paid the commission, or has paid too little, it will take up to a day or even more to wait for the bitcoin transfer.
✅ The transaction fee is usually negligible in relation to the transfer amount itself and significantly less compared to the interest that banks tend to charge.
❌ If the user wants to withdraw crypto from the wallet and receive fiat money, they will have to pay a conversion service, which is also important to check for reliability in advance according to reviews.
✅ Bitcoin uses a cipher that cannot be cracked; it is also impossible to counterfeit the currency.
❌ You need to be careful when working with the stock exchange. Exchanges store wallet data of cryptocurrency holders, and this data can be hacked.
ANONYMITY; CANNOT BE TRACED
✅ Anyone can open an e-money wallet without verifying their identity. At the moment, it is not possible to trace the cryptocurrency movement to third parties.
❌ This feature of electronic money is used by fraudsters, money launderers and sellers of drugs / other illegal goods. This cannot but affect the reputation of bitcoin, so authorities treat it with some distrust.
NO WORLDWIDE TRANSFER RESTRICTIONS
✅ In the current economic and political environment, when foreign currency transfer to Russia is extremely difficult, Bitcoin will come to the rescue. The fee in this case will be the same as for transferring money within the country.
✅ A virtual wallet can be created absolutely anywhere where there is access to the Internet, and you can use it both from a computer and from a phone. This is especially beneficial for those living in third world countries where funding is scarce.
INVESTMENTS FOR EVERYONE
✅ To start investing in bitcoin, you do not need to buy a whole coin, since one bitcoin consists of 10^8 satoshi. There is no minimum threshold for investment here.
❌ Such a tantalizing accessibility of bitcoin may become a problem in the end. A lot of novice investors, without understanding the peculiarities of the crypto-money functioning, lose all their capital.
✅ Bitcoin is the most recognizable and widely used cryptocurrency after Tether and Ethereum. Many businesses that accept virtual money as a means of payment start a bitcoin wallet.
❌ We have already mentioned that electronic money has earned a controversial reputation for participating in illegal schemes. It can be expected with a certain probability that in the future the Russian government will prohibit the storage of cryptocurrencies and any transactions with them, which will lead to the loss of all savings, or part of them, if it becomes more difficult to cash out the crypt. Virtual currencies are already banned in a number of countries such as Vietnam, Kyrgyzstan, Morocco, Algeria.
Thus, one cannot predict whether bitcoin will be used as a means of payment in the future, although its unique advantages make it an attractive economic instrument in the eyes of investors and businessmen.
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