Cryptocurrency – A payment mechanism of the 21st century that defies all the limitations of the older payment mechanism. We already are aware of how and when this cryptocurrency came in trend. The recent developments in the list of investors of bitcoin, like MicroStrategy and Tesla, and many other investors led to Bitcoin being at its highest. This is becoming more of an investment than a payment mechanism. Hence, if you are planning to invest in bitcoins it can be a good decision.
But as it is with all investments, bitcoin also has its own advantages and disadvantages.
Advantages of cryptocurrency –
1. Security –
Cryptocurrency uses blockchain technology for its generation and security. This makes cryptocurrency the most secure payment mechanism, at least in digital payment methods. This security mechanism is mainly helpful for those who want to make covert and secure payments for purchasing various services like bitcoin hosting, web services, etc.
2. Anonymity –
Cryptocurrency employs public and private key mechanisms. This helps to make payments in an anonymous manner without taking the help of third party services. The bitcoin wallet will generate your private and public-key encryption.
Disadvantages of cryptocurrency –
1. Volatile –
Several big investors like Warren Buffett have shown backlash against this investment perspective. They blame that there is no base to this investment. The unexpected surge and fall in the prices of this investment have also led to volatility and distrust among people.
2. Cybersecurity –
In the previous years, we have seen that there are some cybersecurity issues with this mode of payment. Even though the cryptocurrencies advocate for user data security and privacy they haven’t been able to make this mode of payment 100 percent secured. There have been multiple ICO breaches that led to losses of millions.
If you want to invest money in cryptocurrency, you need to keep in mind the principle that “never keep all your eggs in one basket”. The reason for this is that even though we have witnessed several advantages of this investment, you can never be in denial of its disadvantages as well. What you need to do is to invest only a portion of their income in cryptocurrency so that you don’t lose it all.