With Bitcoins’ boom in popularity, more and more people are getting into the world of trading cryptocurrencies. What exactly are the advantages and disadvantages of trading bitcoin and cryptocurrencies? It doesn’t matter if people are trading Bitcoin or other cryptocurrencies like Ethereum, Litecoin, etc. People will get into the business and make a few bucks themselves.
So, for any aspiring crypto-traders out there, it may be best to know the advantages and disadvantages of trading bitcoin and cryptocurrencies before getting right into it. After all, it’s best that one does their research before getting themselves into anything new.
Want to know how trading Bitcoin can benefit you? There are several ways that it can do so. So as not to scare anyone off, we’re going to be starting with the advantages of trading with Bitcoin.
ADVANTAGES of trading bitcoin
Freedom to Pay
The freedom to pay is a big advantage in Bitcoin. Let’s say you’re in the United States and you have a friend in Africa. Sending money to your friend is possible through Bitcoin technology. Since Bitcoin is a form of currency that exists digitally, it is possible to send and receive money anywhere around the world. With Bitcoin, you also don’t have to worry about limitations for transferring money such as crossing borders or bank holidays. Since Bitcoin also has no central authority figure, no one else but you are in control of your own money.
You can also use an online marketplace like Paxful to truly take advantage of this bitcoin perk. Paxful is one of the biggest peer-to-peer bitcoin marketplaces that offer more than 300 payment options for you to have the freedom to choose how to get your hands on bitcoins.
The Transparency of Information
Whenever it comes to transferring money, the transparency of information is always going to be a priority. That is another big advantage that Bitcoin has. With its blockchain technology, all of the final transactions become available for the public eye to see Although all the transactions are available for everyone to see, your personal information is hidden. This means that your wallet address is visible, however, your details are not. This also gives a certain type of security to using Bitcoin since the protocol cannot be manipulated by any person, organization, or government, which brings us to our next advantage…
Control and Security
The control and security of your money should always be a priority when it comes to handling any type of finances. The beautiful thing about bitcoin is that it allows users to be in control of their own transactions which allows your bitcoins to stay safe and tucked away in your digital wallet. Bitcoin also has protection from vendors that want to charge extra. Since these vendors cannot charge anything from the customer unnoticed, they must talk with the consumer before adding any additional charges. We can back up bitcoin and encrypted to make sure that the users’ money stays safe. Personal information is not required when it comes to transactions. This helps to protect users are against identity theft.
Vendors Have Fewer Risks
One of those looking at Bitcoin technology to make money? You’re in luck. With Bitcoin, merchants have fewer risks since transactions cannot be reversed, do not carry personal information, and are secure. Sellers are more protected from losses that might come from fraud. Bitcoin also allows sellers to do their business in dangerous places, where crime rates and fraud rates may be high. The blockchain protects them with the use of a public ledger.
Low Fees
This advantage is self-explanatory: no one wants high fees right? Another beautiful advantage of Bitcoin: low fees. Usually, the fees depend on the exchange, but there are little to no fees within Bitcoin payments. Although having low fees is the norm, additional fees will be included. Transactions with higher fees are faster and prioritized in the network.
Although it seems that after reading those advantages, everything is rainbows and sunshine and it seems that Bitcoin technology seems perfect and easy to use. Do not be fooled because accompanying the many advantages that Bitcoin has are several disadvantages that may make you want to rethink getting into this form of trading.
DISADVANTAGES
Risk and Volatility
The risk and volatility of Bitcoin have always been one of its biggest issues. Some say that volatility is an advantage and disadvantage of trading bitcoin and cryptocurrencies. It is usually what scares people away from investing in Bitcoin. The volatility stems from the fact that there is a limited supply of coins (21 million bitcoin and at least 80% of that 21 million has already been mined) and the increasing demand for them. Behind all this, the volatility will go down. More businesses, media, and trading that accept bitcoin can affect the volatility of bitcoin price. If they start accepting bitcoin, the price will eventually settle down. The price of bitcoin, on the roller coaster ride that it’s on, fluctuates every day because of the current events that are related to digital currencies.
Bitcoin is Underdeveloped
Another reason that people often think twice about investing in Bitcoin is that it is still in its infancy stage. There are features that still need to be developed further. Features such as making the currency more secure and accessible. Development of new features, tools, and services are still going until now. Bitcoin has a lot of potentials but that’s all it is right now: potential. It has some growing to do before it reaches its full and final form. It needs time to work out its own problems just as any currency in its infant stage should do.
Paired with the fact that Bitcoin is still in its infancy stage, many people still do not know a lot about it and do not know about a lot of cryptocurrencies in general. People need to be educated about cryptocurrencies to be able to use them in their daily lives. Although Bitcoin and other cryptocurrencies may have a lot of advantages, the list is still relatively short compared to those of the existing currencies we have.
Advantages for Businesses
The advantages are why more and more businesses are accepting bitcoin as payment, but again, Bitcoin still needs to develop and everyone needs to be able to see the advantages that it can provide. Business workers need to be educated on how Bitcoin works. If they accept bitcoin as payment, they need to help the customers understand how it works. The education of both workers and customers will take a lot of time and effort but it will benefit us greatly if more people started getting to know how it works.
In conclusion, it helps to know both sides of the coin before you start investing. It is important to do your own research about the advantages and disadvantages of trading bitcoin and cryptocurrency. Bitcoin is the currency of the future. It could bring so many advantages to our daily lives. We can apply those advantages through education. Let us encourage others to open their minds as we step into a world filled with the unlimited potential of bitcoins!
For more info about the advantages and disadvantages of trading bitcoin and cryptocurrencies, stay tuned here at Paxful Blog! Don’t forget to keep track of anything about Paxful by following us on our Facebook, Twitter, and LinkedIn!
