What are the Pros and Cons of Bitcoin?
The virtual currency Bitcoin has become incredibly popular today. Individuals are looking at it as a great investment option, while the governments and corporations are trying to use and bank on its blockchain technology for processing big-ticket transactions, securing banking products, preventing frauds, etc. However, it has its downsides too.
The following are some of the main advantages of Bitcoin:
- Payment Frauds Protection: Bitcoin is a digital currency, which means it can’t be counterfeited. It’s also based on a robust and highly reliable blockchain technology that focuses on anonymity and security.
- Direct transfers: The standard payment methods including credit cards mobile wallets, etc. involve multiple third-parties which process every single transaction that’s initiated between two individuals. Bitcoin eliminates this process and instead allows for a direct transfer which is not only faster but also highly secure.
- Low transaction fee: Large transactions, especially the ones made across different nations attract a high transaction fee which may or may not include currency conversion fee, etc. Transferring money through Bitcoin, on the other hand, is far cheaper because of low fee.
Bitcoin has its fair share of risks and drawbacks too, which are:
- Illegal activities: The fact that Bitcoin is a decentralized currency, that isn’t regulated or monitored by any central bank or government body, means that it can be used for carrying out illegal activities.
- Regulatory restrictions: Many governments across the globe are concerned because of the increased popularity of Bitcoin as they believe it could be used for money laundering, etc. and also possibly disturb the economy. Thus, they may impose strict regulations on the use of the virtual currency. In fact, some countries including Bolivia, China, and Morocco have already outlawed the currency.
In the big picture, Bitcoin has a lot of potential. However, it will need to go through a number of challenges to realize the same to its full extent.