Bitcoin is a form of digital currency. Unlike printed currency, bitcoins are transacted over an e-wallet system. Bitcoin was invented by Satoshi Nakamoto who launched it as open-source software in 2009. It is considered the first ever form of a cryptocurrency.
Bitcoins are transacted without any intermediary. The transactions are maintained by network hubs in a public ledger, commonly called as blockchain. Today, bitcoins are used by the users in every corner of the world.
In this article, you will find 3 pros and cons of bitcoins that define its potency as a currency:
Free From Frauds
The online payments are prone to frauds and scams as you are share sensitive information with the vendors. With the development of bitcoin payment system, the users are able to transact their money without any fear of theft or counterfeit. Since all the payments are made through a sophisticated e-wallet system, the chances of anyone misusing your money are diminished.
No Invasion of Privacy
The biggest advantage of bitcoin is that you do not have to provide your credit card access details or any personal information to a vendor. Unlike credit cards, the use of bitcoin does not involve any sharing of personal information and a user can easily transact money without showing his name, address or any other personal detail.
Low Transaction Fee
The transaction is carried out by the miners. Since the miners are hired by the network, they do not charge any fee for the transaction, making it a viable online payment option for the consumers. Unlike PayPal and credit card, the use of bitcoin saves you from wasting money on every transaction.
Bitcoin Wallet is Risky
Bitcoin is a risky mode of payment. It is particularly unsafe for the consumers who are oblivious to its accurate use as any technical error during the transaction can cause a loss of money. So you will not be able to get back your money as Bitcoin has no policy for reversing a mistaken transaction.
Still a Raw Payment Format
Although bitcoins have been in the online business for the past many years, it still lacks a proper framework to secure payments. Since this payment gateway is still in its formative phase, it is considered a less trusted way of making online payments. It would take several modifications in its system before it could become a fully-fledged system for the users to send and receive payments.
The value of bitcoins is volatile in nature. Therefore, you should not use them to invest in any business due to the element of risk. Using them in money market business or real estate industry can turn out to be a financial loss as this virtual currency tends to fluctuate every now and then.
Bitcoins still have to go a long way to become a mainstream form of payment. Although it does have some lucrative advantages, the disadvantages are far more detrimental to the users. If you have any opinion regarding this form of payment, let us know in the comment section.
Anna Marsh is a financial analyst cum blogger. She is an active blogger who aims to raise financial awareness and gives the essay help among the online readers. She likes to blog about financial security, personal financing, and financial forecasting. You can interact with him on Twitter, Facebook, and G+.