Where there’s a will, there’s a way….
In the same way, where there are Pros, there are Cons
The digital version of money is called cryptocurrency, which takes the form of virtual tokens and coins. Since it is virtual money you can use it to buy or sell items from people or companies that accept such payments.
The Pros of Using Cryptocurrency
The Pros of using cryptocurrency is listed below:
1. Open code for mining cryptocurrency
BTC applies the same algorithms that are used in online banking. The only difference between BTC and Internet banking is the disclosure of information about the users. All information about the transaction in the BTC network is shared (how, when), but there is no data about the recipient or the sender of the coins (there is no access to the personal information of the owner`s wallet).
2. No inflation
The maximum number of coins is strictly limited by 21 million Bitcoins. As there are neither political forces nor corporations which can change this order, there is no possibility for the development of the inflation in the system.
3. Peer-to-peer cryptocurrency network
In a peer-to-peer network, there is no master server, which is responsible for all operations. Exchange of information (in this case — money) is between 2-3 or more software clients. All installed by users’ program wallets are part of a bitcoin network. Each client stores a record of all committed transactions and the number of bitcoins in each wallet. Transactions are made by hundreds of distributed servers. Neither banks nor taxes nor governments can control the exchange of money.
4. Unlimited possibilities of the transaction
Each of the wallet holders can pay anyone, anywhere, and any amount. The transaction can not be controlled or prevented, so you can make transfers anywhere in the world with the bitcoin wallet user. The flexibility of doing the transaction without any limitation is one of the very good aspects of cryptocurrency.
5. No boundaries
Payments made in this system are impossible to cancel. The coins cannot be faked, copied, or spent twice. These capabilities guarantee the integrity of the entire system. Every month the number of online shops, resources, and companies to accept BTC is expanding.
Decentralization is one of the best advantages of Cryptocurrency. There is no central control authority in the network, the network is distributed to all participants, each computer mining bitcoins is a member of this system. This means that the central authority has no power to dictate rules for owners of bitcoins.
The decentralization helps keep the currency monopoly free and restrained. No organization and even the government has no authority to determine the flow and the worth of the coin making it stable and secure, unlike fiat currency which is under the control of the Government.
7. Cost-effective mode of Transaction
Most people use Cryptocurrency to send money abroad. Sending money using cryptocurrency is cost-effective. It helps in the transfer of a large sum of money within a lesser time period and charges are reduced to negligible or to zero. For there is no intermediate involved, it eliminates the need for third parties, like VISA or PayPal, to verify a transaction making it cost-effective and also fast.
The Cons of Using Cryptocurrency
The cons of using cryptocurrency are listed below:
1. Illegal Transaction
The privacy and security of Cryptocurrency are very high. It’s hard for the government to trace down any user by their wallet address or to keep checks and records on them. So many illegal activities can take place. In the past many Bitcoin users misused it to buy drugs or on the dark web. It has also been used by some people to convert their illicitly acquired money to hide its source, through a clean intermediary. It can increase the risk related to money laundering by terrorists.
2. No refund and cancellation process
When doing transactions, the concerned authorities should be very careful and conscious. Cryptocurrency is an Irreversible process. Once the transaction is made, it cannot be reversed or undone. If a sender sends money to the wrong account or if the sender sends the wrong amount of money, there is no hope of a refund or getting money back. This can be used by many people to cheat others out of their money. Since there are no refunds, one can easily be created for a transaction whose product or services they never received.
3. Susceptible to hacks
Although cryptocurrencies are very secure, exchanges don’t seem to be that secure. Most exchanges store the wallet data of users to figure their user ID correctly. This data is often stolen by hackers, giving them access to lots of accounts.
After getting access, these hackers can efficiently transfer funds from those accounts. Some exchanges, like Bitfinex or Mt Gox, have been hacked within the past years, and Bitcoin has been stolen in thousands and countless US dollars. Most exchanges are highly secure nowadays, but there is always a possibility for a further hack.
4. Risk of Data loss
The cryptocurrency was created in a way that it would be virtually untraceable, strongly hacking immune and impenetrable authentication so that it would be safer to deposit money in cryptocurrencies than physical cash or bank. However, if any user loses the private key to their wallet, there is no getting it back. The wallet will remain loved forever along with the coins inside. The user might suffer heavy loss from it
5. The power lies in a few hands
Although decentralization is one of the healthy and best features of Cryptocurrency, at the same time it has its own drawbacks. The flow, value of some currencies within the market are still controlled by their creators, some organizations, or developers which can increase the risk of manipulation of the coin value for personal benefits.
Every aspect has advantages and disadvantages. It’s upon us how to use it, in the best way to make the best use of it. You can use cryptocurrency and take the services it has to offer for its user. But make sure to be conscious enough to be not scammed or cheated by any person or parties.
Nepal has already made cryptocurrency illegal. Any person found using it or doing any transaction related to cryptocurrency is Punishable by the Law. So, it is best for Nepalese to not be involved in any sort of crypto transaction.
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