Cryptocurrency is one of the talked about virtual currencies at this moment trending worldwide with a mixed repercussion about its utility and potential.
It is a digital currency and it is used on the base of encrypted cryptographic technology, hence it has been named as a cryptocurrency, and it runs on blockchain technology.
Cryptocurrency can be converted to general currency (also called fiat currency) and it is completely decentralized with global acceptance. Cryptocurrency has earned considerable popularity worldwide because of some definite advantages. Let’s explore the benefits in order to understand the utility of accepting cryptocurrency in your financial management program.
Easy access and globally recognized
Cryptocurrency is readily accessible to all its intended users. It can be used by whoever it wants. It is a decentralized system of currency which can be used and accessed globally.
In the case of Fiat currency the value of Euro, Dollar or yen may go up or down, but in the case of cryptocurrency, the market remains worldwide the same.
Quick and easy payments
It is a quick transaction process. It takes hardly a few minutes to initiate a transaction. You have no obligation to disclose and share your personal details unless the details of your crypto wallet.
Only the payer and the receiver will get to know about the payment and transaction and that is completely secured. The simplicity and advantage of anonymous dealings are one of the advantages that is making cryptocurrency popular.
Facility of faster settlement
Unlike RTGS or NEFT payment method, you need not wait for getting your payment processing if you are doing your transaction using cryptocurrency. Being based on Blockchain, cryptocurrency works in the peer-to-peer algorithm and the payment settlement gets completed flawlessly almost immediately.
In terms of the faster settlement, cryptocurrency works faster than fiat currency and that is one of the definite advantages.
Private and secured
Cybercrime has become a global threat and doing online financial transaction has become extremely irksome die to the risk of identity theft, phishing, unwanted tracking of the regulatory body, non-transparency in the online payment system, etc.
As cryptocurrency works between peer to peer network and it remains extremely private even for the other users of the network. The blockchain integration makes the transaction 100% secured as no one can hack the system because of 100% hacking proof encryption.
Facilitate e-commerce trade
It is rightly called the age of e-commerce and it is a global trend. The use of cryptocurrency can abruptly reduce the risk of fraud, disruption of data and personal financial details as happens with the credit card, etc.
It is a global currency and there is no restriction of using or paying by this global currency, which is easier and convenient for business and shopping portals. If the ultimate aim of an e-commerce portal is to business, cryptocurrency transaction can simply facilitate that. If e-commerce is the ultimate of global business, cryptocurrency can be the global currency for facilitating the business worldwide.
Decentralized and free from 3rd party interference
Decentralization is one of the prime leverages of using cryptocurrency, however, its complete autonomy and total elimination of 3rd party involvement is again a vital advantage that is making the cryptocurrencies extremely popular worldwide. As every payment ordeal is a straight one between both the involved parties, there is no place for brokers or intermediaries.
Free from the risk of identity theft
Identity theft is one of the biggest risks of the online transaction but with blockchain integration in cryptocurrency, the risk of identity theft is not prevalent at all. While doing payment by using cryptocurrency you can keep your personal information secret, and that is the reason, the risk of identity theft gets completely minimized here.
Like every other side of a coin, advantageous cryptocurrency has its disadvantages too. It is always to stay safe while dealing with cryptocurrency by knowing its flip side.
It can be difficult to understand
Cryptocurrency is a new age currency and based on quite complicated blockchain technology. It has lots of tweaks and twists in its learning curve. Without understanding the nitty-gritty of cryptocurrency, it is unsafe to deal with it.
Uncertainty and volatility
The market for cryptocurrency is quite volatile hence it is unpredictable. It can be risky to invest in cryptocurrency without understanding its risk factors. Because of its volatile market, a group of people still feel uncertain about dealing with this digital currency.
Still not accepted by all
Although cryptocurrency is a global concept and people have gained adequate knowledge about it, it is not accepted still by all. Some countries in the world have not legalized the use of cryptocurrency, and that is the reason, buying and selling via cryptocurrency is still some uncertain.
No way to reverse the payment
Unlike check stop payment or request for cancellation of NEFT, it is next to impossible to stop the transaction of cryptocurrency once it is done. This irrevocable nature of payments may create a problem in business dealings, which cannot be countered.
If a user forgets his crypto wallet password, it is not possible to revive the lost data because of tight security encrypted blockchain integration, which can be disastrous for its users.
Problem of scaling
The cryptocurrency transaction speed can be limited due to the smart contract design. However, only by proven design, this problem of scaling can be solved, and it is expected also that in near-future cryptocurrency programmer will be able to sort out this scaling issue.
These are all about the advantages and disadvantages of cryptocurrency. However, as this digital currency is being counted as one of the on uses of near future’s fiscal transactions, it is extremely important to know its pros and cons. As the knowledge about advantages will help you to utilize its best leverages, the knowledge of disadvantages will help you to stay away from the pitfalls.