Pros and Cons of investing in bitcoin
Bitcoin is the trending topic of the season. The recent hike in price (crossing the 14K mark) and the sudden downfall (falling to 7k) has put bitcoin under the controversial limelight. Since its invention the currency has gained traction and has garnered the attention of everyone from commoners to financial experts. While some believe it to be the future of currency, others are skeptical about it. Unlike paper currency, you can’t see bitcoin for real. It is an electronic code store one a vast public ledger call blockchain. The currency is decentralised, i.e., free from control of a specific authority, but is also highly volatile. Considering the buzz around it and its features, enthusiastic investors often ask whether or not they should invest in bitcoins.
There’s no specific answer to it. It all depends on your personal preference. However, understanding bitcoins and its benefits and risks can help you come to a decision. Here are some bitcoin pros and cons that will make it easier for you to arrive at a decision:
Pros of Investing in Bitcoins
Freedom in transacting
In the real world, if you wish to make cross-border payments, then you may face various obstacles. From the transfer time to rescheduling because of bank holidays, there are various limitations that may occur when transferring money. But, in the bitcoin world, you can buy, sell, transfer bitcoins anytime from anywhere in the world. Bitcoin is based on a cash system that is free from the control of any authority. All you need to do is register with an exchange and start your transactions. What’s more, the transactions are instant. It takes no more than a day to transact in this digital currency.
Free from third party frauds
Bitcoin is based on a decentralised technology. The blockchain technology underneath bitcoins is like a vast public ledger. When you make a transaction, details get record, verified, and stored in the form of blocks. From the transactions to the verification, everything is done by common people using or well-versed in the technology. No government or bank controls it. Since the transactions are direct between the buyer and seller, bitcoins eliminate frauds carried out by intermediaries.
Better control and security
The blockchain technology behind bitcoin is design to offer more control and security to the currency’s users. When you buy the currency, it is solely held and control by you. While there are merchants who facilitate buying and selling of bitcoins, the control of bitcoins in your wallet lies with you only. Transactions in bitcoin are stored on a distributed public ledger or blockchain. The information is transparent for anyone to verify. Additionally, once a transaction is verified and store on the blockchain, it cannot be reverse nor delete. Hence, there is always a proof of transaction, reducing the chance of frauds. Furthermore, transactions in the currency are done using anonymous names. Hence, it protects users from identity theft. This digital system provides users a safe and secure manner of transacting.
It is still evolving
Although it’s been quite a few years since bitcoin was invented (2009), the currency is still on an infant stage. A majority of population is either unaware or yet to understand the virtual currency. While many countries have accepted it, many still haven’t legalised it. The blockchain is also yet to be explored. Various applications are being discover to which the technology can be apply. And, applications of bitcoins also have to be understood and unfolded. With digitisation taking over the finance and other industries, this emerging technology seems to offer a great potential for enthusiastic investors.
Cons of Investing in Bitcoins
It is highly volatile
If you look at the bitcoin value shifts, then you will notice how violently it happens. One of the reasons behind this could be its scarcity. Only 21 million bitcoins can be mined ever. There is no accurate answer to what will happen once all the 21 million bitcoins have been mined. Whatever the reason behind it, the volatile nature of the currency can be risky. For those who trade in it, stand a chance to earn profits, but only if they have the knowledge and skills for it. But, for others, who are not well-versed with trading, can face a loss due to this nature of bitcoins. Make sure you research and understand the currency well before trading in it.
Prone to illegal and immoral activities
The currency lacks government control. In a way, the decentralised feature works to people’s advantage. But, because of this, the cryptocurrency space is being use by terrorists, extortionists, and cybercriminals to their advantage. The currency is subject to illegal and immoral activities. As mentioned above, parties to a bitcoin transaction can remain anonymous. While it does protect you from identity theft, it also makes it difficult to uncover the real person. And, criminals are using this feature to their advantage. The lack of control and pseudonymous transactions, the system exposes users to risks of hacking, money laundering, terrorism financing and more.
Like life, bitcoin is not perfect. Bitcoin is young and new and seems to stay for now. Weigh all bitcoin pros and cons and understand it thoroughly and then come to a decision.
Best Business Loan from 1st LG Credit
In the event, you need money for your business startup may get in touch with 1st LG Credit. Our office is open daily from Monday to Friday 10AM – 7PM, Saturday 10AM – 5PM, Sunday 7AM – 6PM. As usual, our staffs are examining the market trend, therefore they are able to provide you with the best idea for your business developing and growing. 1st LG Credit strives to be best money lender offering business loan in Singapore.
We are located at 304 Orchard Road #02-29 Lucky Plaza Singapore 238863. If you are can’t find our office, please call us at +65 6299 6654