Pros and Cons of Using Bitcoin
Bitcoin is a relatively new option for transferring funds. As a matter of fact, 2019 is the year when bitcoin celebrates its tenth birthday and it really stands out among its peers, other cryptocurrencies. Bitcoin is one of the virtual cryptocurrencies which make it difficult to counterfeit and as such, it definitely represents the future of money. But it is still a type of currency, which means that it has its advantages and disadvantages. So, let's see what the pros and cons of using bitcoin are.
Pro - Bitcoin is an open, accessible system
Bitcoin is the most open financial system that exists at the moment. That means that you can use it anywhere, anytime. There is no banking system needed, so it is even accessible to the users who live in countries that do not have a developed banking network. There are more than 2 billion people in the world who do have Internet access, and yet they cannot approach traditional systems for exchanging money. Bitcoin is the perfect solution in such cases. It is also among the most popular online payment options.
Con - Bitcoin can be used anonymously, which makes it ideal for illegal actions
Unfortunately, the introduction of bitcoin and other cryptocurrencies has made it easier for some illegal services to be more approachable. We often hear that digital currencies are used as a payment method for:
- Illegal drug sales.
- Child pornography.
- Illegal weapon sales.
- Human trafficking and many other illegal acts.
Pro - Bitcoin has made international money transfers cheaper and faster
Not all traditional banks and banking services are approachable 24/7 which is exactly what bitcoin offers. Moreover, bitcoin has made money transfers cheaper by not asking for a transaction fee or a minimal sum. Actually, the fee can vary, but it rarely goes over 1% of the transaction. The network compensates a bitcoin miner with newly issued bitcoins. Many users do need a third-party service in order to maintain their wallets. Coinbase is one of the virtual places that can be used for such services as well as for exchanging bitcoins. Needless to say, you will have to pay some fees if you decide to use these services, but you would probably pay more if you decided to go to a bank.
Con - It all depends on the Internet
Even though there are certain efforts to enable offline payments in bitcoin, it is all still highly dependent on internet access. But, don't worry, the chances are that in the near future it will be possible to transfer bitcoins through satellites and radio waves. For the time being, if you are offline, so is your wallet.
Pro - Bitcoin is the most liquid of all cryptocurrencies
The Bitcoin brand is the most recognizable of all cryptocurrencies and its ecosystem is highly developed. Also, if we compare it to other cryptocurrencies, we will notice that Bitcoin users get to retain the original value when converted to fiat currencies (Euro, USD). Remember, you are the only one who is in control of your money here. There are no bitcoin banks that can change their terms and conditions in a way that does not suit you. We usually read about using bitcoin for buying products and services that we usually buy online. But it can be used for buying some groceries and small things, too. Lightning Network is there to provide that.
Con - The list of businesses accepting bitcoin is still rather short
Physical currencies are widely accepted, which is still not the case with cryptocurrencies. Sure, bitcoin is the most popular among them, but it is obviously not enough.Companies accepting bitcoin as a payment method are welcoming its advantages, but their workers are rarely well informed.
Pro - Privacy is guaranteed
Bitcoin respects your privacy and protects your anonymity. When you use credit cards, banking authorities have unlimited access to all your banking activities and records. With bitcoin, that's different since the users can see the public address, but the identity of an individual user remains protected.
Con - There is a certain number of risks when using bitcoin
Yes, there are quite a few risks of using bitcoin. Here are some of them:
- Your money is not entirely safe from hackers. Bitcoin does not have a central bank that you can complain to if this happens.
- The value of bitcoin changes all the time, and that might be the biggest risk of all. At least, that is what crypto miners think. Since the amount of coins is limited and the demand is rising as you read this article, the volatility of bitcoin is increasing. But its value will settle, as more and more businesses are starting to accept this cryptocurrency. Bitcoin reached its peak value in 2017 (around 10,000 USD). A year after that, it was equivalent to less than 7,000 USD. At the end of 2018, you could only get 3,500 USD for a bitcoin. At the moment, you can exchange it for about 10,000 USD which is a similar value to the value it had two years ago.
- Bitcoin transactions are irreversible. That means that if you make a mistake and send your bitcoin to a wrong company, you will probably not get it back. There is no refund for you, so you really need to think twice and doublecheck everything before you approve the payment.
To conclude, there are many advantages as well as disadvantages of using bitcoin for acquiring goods and services. Whatever you might think of cryptocurrencies one thing is for sure - they are here to stay. And they are slowly taking over the field that used to be reserved for cash and credit cards only.