Advantages (and disadvantages) of cryptocurrencies
Cryptocurrencies are no longer an unknown reality. Currently, they constitute an innovative and stable technology. Thanks to its properties have become an alternative financial system capable of competing with traditional ones.
Although the recognition of their characteristics and the incorporation of their use is generalized yet, there is already a considerable number of companies that experiment with them or provide specialized services to manage them.
The increasingly widespread use of cryptocurrencies has made it possible to clarify the judgments about the advantages they provide and the risks that must be considered to get the best out of them:
They are global currencies
They can be used anywhere in the world with internet access. Many countries already recognize them as a means of payment.
They are decentralized
They are not regulated by any type of government organization (financial institutions or the state). They allow transactions without the intervention of third parties; however, in some countries, there are regulations for its use.
They are safe
Cryptocurrencies cannot be forgery or duplicate, thanks to a sophisticated combination of proven cryptographic techniques. Even more, the transactions cannot be reversed, which offers more security when it comes to e-commerce businesses.
Allow instant transactions
Cryptocurrency transactions don´t require intermediaries, which streamline the process and businesses' cash flow. Transactions are confirmed from seconds to minutes, depending on the cryptocurrency, giving you instant access to the funds.
They are simple
No advanced knowledge is required to start using them, which means that almost everybody could benefit from cryptocurrencies.
They are transparent
They promote transparency and unique records. Most of them allow free access to verify the transactions that have been registered, and cannot be modified later.
Low transaction costs
Unlike some electronic payment systems, cryptocurrency transactions do not charge high fees, easying international payments too.
They offer the possibility of keeping your transactions private. Although they are public open-source systems, they do not require your real identity.
Only you can control your money
You manage your funds with a private cryptographic key, no external entity can freeze or manipulate them. Therefore, cryptocurrencies are unrelated to the bank or government failures.
Stimulate financial innovation
They open up new strategic possibilities both individually and for the financial sector in general. The low fees and their safer and faster transactions enhance their acceptance by online retailers and smaller companies, as well as by bigger enterprises. The increasing valuation of some cryptocurrencies is also another attractive factor for investors and entrepreneurs.
Similarly, there are risks associated with using cryptocurrencies and you need to be aware of them. The main ones are:
the possibility of losing your funds due to the loss of private keys in the wallet;
the instability of its value in the market, with the exception of stable cryptocurrencies (it is estimated that the initial volatility will eventually stabilize);
the possibility of hacks due to association with unreliable exchanges or portfolios.
Both the arguments for and against the use of cryptocurrencies are debatable in practice.
Knowing them already offers you an advantage to develop in that world, to form your own opinion, and get the most out of them.