Do you want to know if you should invest in Bitcoin? You must have been hearing about the increasing popularity of Bitcoin from everyone around you. And if you’re like most people, you are probably wondering if you should invest in Bitcoin.
Is an investment in Bitcoin a good option? By the way, check out this article to know what Bitcoin is.
So, back to what we’re considering; in this article, we will consider the pros and cons of Bitcoin so that you can make an informed decision about investing in this cryptocurrency. Note that this article is for information purposes only and shouldn’t be considered as financial advice.
Pros of Bitcoin
It is easy to send
Since Bitcoin is decentralized, you can easily send it to a friend anywhere in the world within seconds without going through any intermediary. This advantage alone makes Bitcoin a popular means of carrying out the financial transaction. Instead of waiting for days for a wire transfer to complete, you can make payments with Bitcoin within seconds or minutes.
It has a limited supply
Only 21 million Bitcoins will be mined. This limitation means that no more Bitcoin will be mined beyond 21 million. This preserves users’ purchasing power and makes the currency immune to inflation. The limited supply of Bitcoin also contributes to the increase in the value of the digital currency. People are not interested in a currency that can be inflated by the antics of a greedy government.
It is private
Contrary to the views of most people, Bitcoin is not anonymous; it’s private. All Bitcoin transactions that have been made can be seen on the public Bitcoin ledger.
However, the names and details of the people that executed the transactions are not revealed. Each transaction is connected to an address. So while people can see your address, they will not know that the address belongs to you.
Bitcoin is cheaper to transact
Visa cards and MasterCard charge some fees out of each transaction executed. Bitcoin, on the other hand, doesn’t charge these exorbitant fees; thereby putting money in users’ pockets.
Now that we’ve seen some of the pros of Bitcoin, what about its cons?
Cons of Bitcoin
Its price fluctuations make it risky
Bitcoin is known for rising and falling. Since it is traded 24 hours a day and 7 days a week, its price keeps fluctuating. So, it is not stable and many unforeseen circumstances can influence the price. To be safe, don’t put the money that you cannot afford to lose into Bitcoin.
Slow transaction speeds
Bitcoin is now notorious for slower transaction speeds and higher transaction fees. Other cryptocurrencies are faster and with cheaper transaction fees. Although the Bitcoin miners are working on fixing these issues, the price will keep being volatile until the issues are fixed.
Bitcoin transactions are irreversible
Unlike transactions carried out on a credit card, Bitcoin transactions cannot be reversed. If you send Bitcoin to the wrong address, there’s no way to get it back.
Thus, you need to be sure that you are sending it to the right address.
Those are some of the pros and cons of Bitcoin. Although Bitcoin has lots of great features, it is still risky. There are lots of unknown factors that affect it.
If you decide to invest in Bitcoin, research your options. Don’t purchase it from just any seller. Go for a seller that is reliable and reputable; not one that will overcharge you and even disappear with your coins. Considering the volatile nature of Bitcoin, don’t invest more than what you can afford to lose.