The New Dealer

  • March 23March / April Edition

Advantages and Disadvantages of Cryptocurrencies

Mohammad Rahman, Reporter

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Cryptocurrencies, such as Bitcoin and Ethereum, are the latest craze when it comes to technology. Cryptocurrency is a form of digital currency that can be used as standard money where ever it’s accepted. It is not under the regulation of the government, and it isn’t issued by the central bank. It is its own unique form of money that can be used as regular currency. Cryptocurrencies don’t share the same level of protection and stability that normal physical currencies have, but that hasn’t stopped people from using it. Due to the recent cryptocurrency boom, many people around the world have started to use the different forms of cryptocurrencies that exist, mainly Bitcoin and Ethereum, since they have the most value. Many locations around the world, such as Singapore and Switzerland, are in high cryptocurrency use. Even nations which have high political restrictions, such as Russia and China, are considering the use of cryptocurrency. It’s important to look at all the advantages and disadvantages.

One of the major advantages of cryptocurrency is that people have easy access to them, it’s all available to the public, as long as they have a computer. Anyone can access cryptocurrency since it’s so decentralized, you can easily find various places online that accept cryptocurrency to raise funds for their projects or websites. This brings us to another positive, quick payments and freedom in payments. Making payments with any cryptocurrency is easy and fast, as long as people have the knowledge, it doesn’t require many details when making payments. All that’s needed is the wallet address of the person that the payment is going to be made to. There is also great freedom when it comes to using cryptocurrency since it’s not regulated by any nations, you can make payments from anywhere in the world to anyone without the need to worry about limitations. Privacy is also a major part cryptocurrency, when making a payment to someone you don’t need to share your identity or personal information that you would have to when making payments with a credit or debit card from a bank. All transactions made using cryptocurrency is kept on something called a blockchain. A blockchain is a digital ledger in which all the transactions are recorded and kept. It is available for public view and to anyone that uses cryptocurrency. All people see about you on the blockchain is your wallet address, your identity and personal information is hidden. Cryptocurrencies are also really good for merchants, they can use cryptocurrencies to conduct business and not be in the risk of fraud. Due to the public blockchain, it’s very hard to cheat someone and makes using cryptocurrency secure.

The use of cryptocurrencies also has its disadvantages, a main one being the lack of knowledge and understanding. Since this is a form of digital currency, those with lack of computer knowledge are already going to struggle using it. There is a learning curve when it comes to using cryptocurrencies, so people that use it without knowing how to might end up doing risky things and losing a lot of money. In addition, many companies and businesses that are accepting cryptocurrency don’t usually have a lot of people on their staff with good amount of knowledge on the subject. This makes it hard for people to help each other when it comes to using cryptocurrencies. Not knowing how the cryptocurrency and the blockchain system work, can lead people to be vulnerable to hackers, which can be very detrimental. Cryptocurrencies also aren’t widely accepted, a lot of businesses are starting to use it, but it’s still not enough to make cryptocurrency a norm. Another major disadvantage is if you lose your wallet, the cryptocurrency is kept as digital currency on your phone or computer, so if you happen to lose access to those devices your money is gone and you won’t be able to get it back no matter what. There is also no way to reverse any payments made using cryptocurrency, all you can do it ask the person for the money back and hope they give it back to you. Using cryptocurrency is also very risky and volatile, stocks and prices for most cryptocurrencies go up and down by large amounts, so using it can be risky and you can potentially lose a lot of money if the cryptocurrency bubble bursts.

Cryptocurrency isn’t perfect. It provides advantages that aren’t available when using physical currencies and keeping money in the bank, but it also comes with its disadvantages. Slowly and steadily cryptocurrencies are consolidating their place in the world, many nations are trying to let the public use it as a form of widely accepted currency. Cryptocurrency is still in development, and it might change a lot over the years. It might have its drawback, but then again, the physical currency and banking system we use today also have many drawbacks. In order for cryptocurrencies to be successful, people need to get a better understanding of what it exactly is, how it works, and not let their previous notions of digital currencies ruin their view of it. Cryptocurrency has a future, but it’s up to us to decide whether it’s going to be good or bad.

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Advantages and Disadvantages of Cryptocurrencies