With cryptocurrency growing in popularity and usage across the world, many are asking themselves whether or not they should invest in Bitcoin or a similar altcoin. The following list of pros and cons aims to shed some light on this ever-emerging digital space.
Pros:No need for banks
It's thought that around four billion people worldwide have no bank account, seemingly showing that there would be a demand for a currency that can be accessed easily online. The lack of a need for banks results in decentralisation and allows individuals to have full control over their money, cutting out the third party.
With the growth of the digital world, having an easy way to pay online is becoming more and more essential. Cryptocurrency makes this possible, which also greatly increases the speed of transactions. Rather than waiting for several working days for money to process - as used to be the case with cheques - funds can be sent in just 10 minutes.
Cryptocurrencies are becoming more and more popular among young people, who have little knowledge about the stock market and see altcoins as a viable investment alternative.
Cons:Lack of real-world use
Although cryptocurrency’s usage is increasing, it lacks application in the real world. There are still relatively few businesses who accept Bitcoin, for example.
Lack of transparency and security
A lack of information and understanding about cryptocurrency transactions makes it difficult for governments to regulate or tax, leading to a host of criminal activity and problems for investors. Fears of exchanges being hacked are also a real problem and issues with wallets cause a lot of uncertainty.
Bitcoin mining uses incredibly large amounts of energy that could prove to be detrimental to the environment. Without reducing its carbon footprint, cryptocurrency could soon worsen the state of the Earth to disastrous consequences.
Because the value of cryptocurrency can change so drastically, investor confidence is compromised and it becomes difficult for anyone to feel certain of how much Bitcoin they actually hold.