What are the pros and cons of cryptocurrencies?
Cryptocurrencies are assets that are still going strong. Their impact on society is not yet entirely clear, but there are many indications that they will replace standard money at some point. For this reason, it is worth finding out what are the advantages and disadvantages of this solution and which technologies currently top the list of popularity and market capitalization.
Advantages of cryptocurrencies
First of all, the fees that are charged for transactions are very low. Transfers abroad are made virtually instantly and you can transfer funds to the other side of the world in an instant. The account is very easy to maintain as the user is fully responsible for it. In this way, you avoid any fees for maintaining it, which significantly reduces costs.
Another advantage is security. Cryptocurrency trading is based on a very secure system that practically eliminates the risk of fraud unless the user himself makes a mistake. At the same time, cryptocurrency technologies are based on significant user influence. This means that the rules are transparent to everyone and everyone can have an influence on the formation of a particular network.
The security measures in place in individual networks are so complex that it is almost impossible to circumvent them. This means that funds secured on an account can be stored without fear, even in large amounts.
It is worth mentioning that most cryptocurrency networks are based on a limited amount of coin data. This means that their price stability is high, and mining software will step by step generate more blocks of the chain.
Moreover, cryptocurrencies allow you to make instant transfers which is once again worth emphasizing. This is especially applicable in interpersonal relationships but also in the functioning of businesses. Payments made in this way are transparent.
Disadvantages of cryptocurrencies
One of the biggest concerns about this technology is that a person is fully anonymous. On the one hand, this is a good way because wealthy people can better protect their capital, but at the same time, it can be used to conduct illegal transactions without being able to trace the perpetrator. For this reason, cryptocurrency technology is not very quickly approved by governments around the world, although several countries have recognized them as official means of payment.
As already mentioned, although transactions conducted using cryptocurrencies are instantaneous and very secure, there is no way to undo the transaction. While in the case of business-to-business transactions, the situation will be able to be unwound, if there is a mistake when making a purchase from another individual, the problem may not be solved. Much depends on the integrity of the other users of the transaction.
A big problem is the mining of cryptocurrencies itself. It is quite a long and complicated process and mining os quite a heavy load on the computer. Here, in turn, arises the problem of energy and hardware consumption and the availability of raw materials for the production of subsequent components. In this way a certain speculative bubble has formed and bought a new graphics card at a good price is practically impossible.
Due to the fact that this is still a young technology, it is not yet regulated. In many countries, you may have to pay large transaction fees because that will be the law.
In conclusion, there is no doubt that cryptocurrencies are a very important part of the global financial system and have very great possibilities. Especially interesting is the ability to make transfers around the world at an express pace. However, there are some issues that the technology needs to resolve in order for it to gain acceptance throughout society. Everything will come with time, but a lot of strength is still needed.