Financial Technology: What Is Cryptocurrency?
By Competitive Technology
Currency is a type of money that is used to buy things. Most countries have different currencies as per the rules of each central government and the economic system of each country. Of course, traditional currencies are not the only things that can be used to buy products from the market.
In recent years, the emergence of bitcoin and other cryptocurrencies has helped to solve some of the common financial obstacles customers face in everyday transactions.
Growth in market trends related to cryptocurrency trading have surpassed stocks during the last two years, so it’s important to know the intricacies of digital currencies in modern use. In this article, we will discuss some very important advantages and disadvantages of digital currencies in greater depth.
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What is a Cryptocurrency?
Cryptocurrency is actually a digital currency that has no involvement with the government of the country when it is exchanged between two parties. It is an encrypted currency. While it’s exchanged between two parties either the public or private keys can be used.
For these reasons, the use of digital currency reduces processing fee as it requires no involvement with central governments or large financial institutions. Let’s further consider some advantages of cryptocurrency investments in the following sections.
Decentralization
In any country, the use of a currency’s transactional flow of is solely controlled with the help of government regulations and large financial institutions. But when using cryptocurrencies, consumer decisions are conducted on a peer-to-peer basis and this helps ease of use in a number of different technological areas.
Low Operation Costs
As consumers, we have all experienced cases where we had to pay extra fees, often levied by private organizations. But if consumers use cryptocurrencies, no extra fees are required for the transaction but a very low processing fee is paid by buyers.
Unlimited Transactions
Often things happen when we need to take out cash from the atm or banks and we get an alert that above a fixed amount we cannot withdraw or transfer in a single transaction or on a single day. In cryptocurrency, consumers do not find any such limitation. Here you can do as much transaction as much you want that is two without limit of a number of transactions on a day.
No Delays in Transfer
Most often it happens that when we transfer money using a traditional bank, which often takes a few days to reach the particular account. But with the cryptocurrency, you will not have to face any such problem. Here the speed of transaction is very very fast as the number of mediators in this transaction is already removed. So not much processing and very quick transaction.
Universal Currency Options
Most of us face the problem of changing the currency and then posting it in the bank account or transfer it to any other international account. Due to different currency, we have to face may barriers here also. But with the use of this cryptocurrency, the is no more like a barrier.
No Bans on Address or Location
When we go to a bank to open an account, the bank asks many documents with us and also take many days to open an account. Herewith cryptocurrency, everything is easy. In the case of cryptocurrency anyone having internet and a device anytime they want. It also doesn’t need a special document to open the account.
Transparent Transactions Every Time
In cryptocurrency, every transaction is passed under the observation of blockchain so everything is clear where and how much cryptocurrency has been used. If you want to keep your identity hidden you can, and if you want to let others know your cryptocurrency address, you can also do that. Both options are available here in the blockchain.
Disadvantages of Cryptocurrency
Even though this cryptocurrency has so many advantages, some of its advantages may prove not good for us and the advantages convert to be disadvantages with no time. Some of them are as follows.
Money Paid Can’t Be Reversed If Recipient Address is Wrong
Have you ever gone through the situation that you were paying someone else and actually paid someone else but you were not late enough you did try to revere the process and got your mistake corrected. But it doesn’t happen the same in case of cryptocurrency.
One of the biggest cons of this cryptocurrency is that if once you pay someone either by intention or my mistake you can’t get back your money unless the person whom you transferred the money, transfers it in your account back.
Vulnerable to Hacking and Other Illegal Activities
As we know that cryptocurrency is volatile in nature means it moves from one account to another very fastly, it is always at high risk by the terrorist and other illegal hackers. Since there is no role of the gov in its a transaction, the risk of hacking the account becomes even more.
Still Not Accepted in Many Countries
As we have discussed above that this is the currency that can be transferred without the barrier of conversion of one country currency to another, it makes it not fit to be used in many countries. Many countries have still not accepted the use of cryptocurrency within the country as they don’t find it safe for the country.
Conclusion
As we have seen above that there are many advantages and disadvantages to the cryptocurrency, we should use it wisely and very carefully. If a single step can make your dream come true, the same can go wrong if done without proper thinking. This topic is not so small that it can be covered in just one article. However, I hope this provided you with very basic and important things to know.
Nowadays, when we play video games on mobile devices or do some online shopping, we earn some points which we can redeem on the next purchase or sometimes we can redeem these points also. Cryptocurrency is also something like this. This is not the actual currency but can do many of the work which a normal currency can do but in a different way.
