The ushering in of bitcoin and the other altcoins for basic use as a means of exchange for transactions did not lack the required anticipation and welcome as well. Many people all over the world had always thought of the possibility of a solution to the inadequacies of the fiat currency enabled systems.
Some of these inadequacies are the time required to successfully carry out payment transactions, as well as third-party interference from the financial institutions. Although the coming of the virtual currencies may be considered a breakthrough from all of these problems, we cannot conclusively say that there are no issues that must be tackled on this blockchain technology.
The ease and convenience that are characteristics of the use of cryptocurrencies are not devoid of their corresponding disadvantages and shortcomings. It is important that cryptocurrency users and investors adequately weigh their decisions to adopt bitcoin and its many younger siblings, as a means of value exchange, and for the other purposes.
This would help them determine how much tolerance they can have for the modus operandi of everything that has to do with the decentralized payment systems, as well as to help them understand the risks and uncertainties; this could make them place a bar to the extent that should go while making use of these important financial instruments. As for advice, the user must make sure that all of the behaviors of the digital currencies are well understood because this is key to maximizing all of the great prospects that abound, as well as a proactive measure that protects you from having your fingers burnt while you’re at it. The best way to get a thorough analysis is to have the pros and cons spread out, side by side.
Benefits of the crypto adoption
The relevance of the cryptocurrency idea cannot be overemphasized. This is largely the reason for the popularity it has gained and the prospects. Here are some reasons why a good number of people think the crypto solution is the bomb.
• Universal currency with easy access for all users
One of the reasons why bitcoin got so popular among such a large number of people around the world, is because of its accessibility to all kinds of persons, irrespective of country or region (except for the countries with very strict policies on cryptocurrency usage- which is not necessarily a fault of the cryptocurrency developers). This means a person in Africa can easily trade with another person in Europe, without the challenges of currency differences like we have with the central bank notes. Thus, there is no need for currency conversions each time a transaction is to be made. Asides this, the ease with which you can obtain the digital currencies, makes it more interesting; since you can get them from any of the numerous exchanges, as well as from individual to individual or some pretty regularized black market.
• Cryptocurrencies allow decentralized payments
The need for a decentralized payment option that is largely not affected or strictly controlled by a third party was on the rise. People the likes of Nick Szabo started the grand journey in a bid to put a solution on the table until the first cryptocurrency developer (under the false name Satoshi Nakamoto) came up with the bitcoin invention for public use in 2009. When bitcoin came, its catchphrase which was able to attract users and the few investors that had put in their money was the ‘decentralized payment system.’ Every cryptocurrency (which works on the distributed ledger technology), is immune against restrictions, and no central bank anywhere, stores all the information, or has the sole control over decision or policymaking. This is one beauty of the blockchain network.
• Payments using cryptocurrencies are fast and in.stant
This is another major plus for virtual currencies. The speed at which bank transactions anywhere are processed is nothing compared with the speed of the cryptos. Making payments with cryptocurrencies allow instant function, quick payments that cut off the influence and time-consuming requirements of a third party.
• Investor’s profit-maximizing entity
If you observe the price chart for most of the earliest cryptocurrencies, you’ll see a massive gain in price value just over a period of less than one decade. This is some mind-blowing data for the cryptocurrency investor who hopes to make a profit from keeping and selling the coins (or tokens) when the price is high. Thus it is not off point when some persona makes claims of massive financial profits from dealing with cryptocurrencies. Bitcoin, for example, has experienced a substantial rise in market price since it was first used. There are many other altcoins with such great prospects, and we don’t seem to know how much profits are held in their future.
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Although there is other significance of cryptocurrencies, the ones listed are broad basic reasons why any body would want to actively use or hold onto their cryptos.
Now, since it is believed that everything with advantage also has its disadvantage lurking around, it is necessary to make considerations of the issues and demerits of bitcoin and the altcoin families.
Challenges of the cryptocurrency experience
• Price volatility problems
This is one of the big issues that seem to be putting a clog in the wheel of progress. The virtual currency market has been characterized by an unprecedented instability and volatility in general pricing, and all of the known market-listed cryptocurrencies are sufficiently affected. This is bad for business if you have to make and receive payments by this means. In the long run, or in fact the short while, there is the possibility of making huge profits when the prices soar. But the risks are too enormous, and it is better not to have a heart attack. This trend has grossly affected the number of persons that have embraced the use of cryptocurrencies; both for transaction purposes and as a store of value.
• Scalability problems
Although the big names in the virtual currency world are in fact the players with the greatest scalability problems, we cannot overrule the fact that it also has its effect on the newly developed protocols (especially since bitcoin with a scalability capacity of not more than 7 transactions per second, acts as a reference standard for the rest). With the scalability issues, the speed of transactions will be negatively affected, and from antecedence, it is always accompanied by high transaction fees; the very things we thought we should escape when there is a decrease in the use of fiat currency systems.
With all of these, we cannot say with all certainty whether the cryptocurrencies have come to stay in the hearts of people. But then, everyone has something like a preference scale; the reasons why Mr. X enjoys the use of digital currencies may be way different from the reasons why Mr. Y does. So, if Mr. X think cryptos are the worst inventions ever, Mr. Y. on the other hand, may strongly think his friend is making the biggest mistake.
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