Drawbacks That Exist With Using Bitcoin
Cryptocurrency is arguably the next huge movement in the financial world. Due to the massive monetary freedom that it yields to users, it has become increasingly popular among players and movers of the financial market. Although cryptocoin hasn’t completely replaced the clearly outdated fiat currency, since most countries still regard paper money as their legal tender, that still doesn’t deter its global usage. Since the huge success of the first-ever e-coin; Bitcoin, which rose in value in a spectacular form, there has been a sporadic creation of other cryptocurrencies which are all termed Altcoin. As of now, none of the altcoins have reached, or even near the value range of Bitcoin, Ethereum is the closest and it is still several thousands of dollars away. It is a matter of fact, Bitcoin is undisputedly the most valuable entity in the crypto world.
Bitcoin like other financial assets is valued relative to other currencies like USD and goods with a monetary value like gold. And like other currencies, it can be used as a means of value exchange. The market for Bitcoin is ever-increasing with every passing day, as the demand for the cryptocoin continues to increase. In present times there are several recognizable corporate bodies that accept Bitcoin payment in their transactions such as Expedia. Moving on, multiple bodies that work online also use this ecoin as a means of payment. Bitcoin has an advantage over fiat currencies in online transactions in that it is faster and less costly to use. Online traders or business dealers prefer using cryptocurrency because of this reason.
Everything that has a good side also has its bad sides, so Bitcoin cannot be all good. What exactly are the drawbacks of this marvelous gift of the 21st century. Due to the popularity of the coin, it has attracted both the people that hope to make a profit from it through legitimate ways and those through exploring it for scams. From Ponzi schemes to full out hack attacks, Bitcoin owners are at risk of this scam, due to how Bitcoin is structured. Add to this, the operators of the black market are seemingly drawn to this currency, due to the financial freedom it gives its users and its detachment from every country’s financial record. Because of all these qualities, online criminals see Bitcoin as the best way to store their ill-gotten money. This casts a dark shadow on the cryptocurrency and might affect its reputation negatively.
Another worry for holders of this coin is that for any transaction made with this cryptocurrency is not subjected to any refund policy or chargebacks. Any size of Bitcoin sent cannot be reversed by the sender, only the receiver can ultimately choose to return the money. Most Bitcoin in circulation is mostly derived from a process called mining. The mining of cryptocurrencies, especially Bitcoin, was dubbed to have a negative effect on the environment. Bitcoin likewise experiences high volatility of price, that is, the change in value can shoot upwards or downwards without a forewarning. This is a double-edged sword since it can be good news for owners or equally bad.
Owners of Bitcoin should not be deluded that the coin is all good, and should try to be aware of the limitations that come with the cryptocurrency.