What are the Real Pros and Cons for Bitcoin?

A few days ago, Google announced its decision to ban any ads related to cryptocurrency on its network. The International Monetary Fund also announced its decision to do the same, recommending an international crackdown on the use of Bitcoin and other cryptocurrencies for the purpose of money-laundering. After these announcements, the value of Bitcoin began to decline.

It appears that Bitcoin’s slump has ceased for now. In fact, the value of Bitcoin recovered slightly on Thursday morning. Many investors are left wondering, however, if buying into the trend is still worth it.

Bitcoin Dips Below $8,000

Bitcoin first declined below $9,000. The fall in the value of Bitcoin continued until it passed below $8,000, hitting a low of $7,676 early Thursday morning. However, within a few hours, the price of Bitcoin bounced back up. Currently, one Bitcoin is worth $8,190 (at 9:00 a.m. Eastern Time).

The recent volatility likely cannot be entirely attributed to IMF and Google. On Wednesday, some U.S. lawmakers expressed their distaste towards cryptocurrencies at a hearing at the House Capital Markets, Securities, and Investments Subcommittee.

Michigan’s U.S. Representative Bill Huizenga said, “This Congress is not going to sit by idly with a lack of protection for investors.”

California’s U.S. Representative Brad Sherman referred to cryptocurrencies as “a crock.” He said that “[cryptocurrencies] allow a few dozen men in my district to sit in their pajamas all day and tell their wives they’re going to be millionaires.”

If you’re interested in investing in cryptocurrencies, here are some of the advantages and disadvantages of Bitcoin that should help you make a more informed decision.

Bitcoin Advantages

Freedom of payment
One of the main advantages of Bitcoin is the freedom of payment. With Bitcoin, you can receive and send money from any part of the world and at any time. There’s no need to worry about bank operation hours, crossing borders, and other limitations that usually exist when it comes to transferring money.

Bitcoin grants you complete control of your money and provides a network that is unique in that it has no central authority figure.

Control and Security
Another advantage of Bitcoin is the control and security that it affords. Since users are in control of all of their transactions, this helps keep Bitcoin safe. Merchants must notify customers before adding extra fees for any transactions. Payments can be made in Bitcoin without providing personal information. Whether personal information is provided or not, no personal information is actually linked to the transactions. Therefore, Bitcoin protects customers against identity theft. It can even be encrypted and backed up to ensure your money’s safety.

Information is Transparent
Yet another advantage of Bitcoin is that information is transparent. The block chain makes it possible for all users to see finalized transactions. Any personal information is concealed. The only thing that is visible is the public address. However, no personal information is actually tied to the public address. At any time, users can verify transactions using the Bitcoin block chain. Since Bitcoin is cryptographically secure, no person, government, or organization can manipulate Bitcoin protocol.

Low Fees
The final advantage of Bitcoin is the low fees. As of now, there are no fees for Bitcoin payments or very low fees. In some cases, users may include fees for transactions to have them process faster. Transactions with higher fees have more priority. Therefore, these transactions are processed more quickly in the network. Digital Currency exchanges help with the processing of transactions by converting the cryptocurrency into flat currency. These services charge lower fees than PayPal and most credit cards.

The Biggest Disadvantage…

As shown by the recent Bitcoin slump, the main disadvantage of the world’s most popular cryptocurrency is that the value is constantly changing. In just a few hours, the value of Bitcoin dropped a few thousand dollars. The main reason for the volatility of Bitcoin is that there is a limited number of coins, and the demand for them increases each day. While Bitcoin is beginning to recover, it likely won’t be long before the cryptocurrency experiences another slump.

Regards,

Ethan Warrick
Editor
Wealth Authority


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