Launched nearly a decade ago, the peer-to-peer cryptocurrency payment system Bitcoin has been garnering much attention as of late. Simply put, Bitcoin is virtual currency that can be bought, sold, and exchanged without the need for physical banks and currencies.
Bitcoins can either be purchased through cryptocurrency exchange platforms or unearthed on the web, which is a process known as mining. Whether you purchase Bitcoins or mine them, it is paramount to be knowledgeable about the pros and cons of buying and trading such a currency that is still relatively new and not universally accepted.
Pros
Privacy: Bitcoin has a number of advantages, but one unique feature of the virtual currency system is that it offers anonymity to protect users’ private data. Upon getting a Bitcoin wallet, which is the storage space for your funds, you are typically not obligated to disclose any private information, which allows for transactions to be made securely to avoid identity theft and so forth.
Inventory: Another noteworthy advantage of Bitcoins is that there is only so many mine-able Bitcoins available. The stock of bitcoins is limited; unlike fiat currencies, no government entity can produce more Bitcoins once all the available Bitcoins have been mined.
Cons
Worth: While Bitcoin has its upsides, it is not without its downsides. One major issue associated with the virtual currency is that there is no assurance that bitcoins will maintain their current worth in the future. It is a volatile market.
Fraud: While it can be backed up, your bitcoin storage (wallet) cannot be insured like a traditional bank account. Meaning, if your account gets hacked, it is likely that you will never see your funds ever again. While some cryptocurrency platforms do have security measures in place to prevent scams and frauds, the risk always exists.
Though its introduction took place back in 2009, Bitcoin is still a new type of currency that most consumers and retailers have not yet adopted and feel dubious about. However, if you are looking for a sound investment in a market that is truly shaking the financial world up as we know it, it is recommended that you weigh the advantages and disadvantages of putting stock in Bitcoins.
Though there is no insurance and guarantees, there is immense potential to profit. Doing your research thoroughly and knowing what exactly you are getting into is of utmost importance nonetheless.
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