Bitcoin had been in the market for over a decade now, has been embraced by many governments and businesses. Those who have managed to use it have reported both benefits and drawbacks associated with it.
Among the benefits of using Bitcoins is:
- Widely accepted as a means of payment
Bitcoin’s mainstream growth is highly taking up the market. Thousands of merchants are accepting Bitcoins as a means of payment. You can now freely make payments even at the retail level using Bitcoin units.
- Ease of making International Transactions
Unlike regular currencies, there are no fees charged in international transactions. Intermediaries are also eliminated which makes the whole process much easier and reliable. There are no delays involved in transaction.
- Lower transaction costs
Bitcoin hardly charges anything above 1% of the amount transacted as fees. This is unlike other currencies which charge more than two or three percent. The fee is applicable on transactions made across international boundaries. This could be between countries in different continents.
- High privacy
Transactions made with Bitcoin S2F model are anonymous. Likewise, personal details are not required when making transactions. This ensures that no one can trace you back. Addresses change with each transaction. Additionally, information is encrypted preventing access from third parties.
- Built-In Scarcity
Though Bitcoin is of high value, it is scarce with its total supply being 21-million units. This ensures that it retains its value in the long-term, unlike other currencies whose value changes with change in consumption. It is therefore easy to predict the economy with Bitcoin.
- Exposure to scam and fraud
Bitcoin being the world’s most popular and high value cryptocurrency, has attracted so many people among whom are scammers and frauds. Most people have fallen victims to such schemes which area aimed at taking people’s money. Such schemes involve savings and interests plans in which people invest, only to realize they were a scam.
- High price volatility
Bitcoin is high susceptible to high price volatility. This may result into businesses, making huge losses. While it is the most liquid and high exchanged cryptocurrency, it is still not good enough for long-time investors. You can hardly use a legitimate payment method as its purchasing power keeps changing from week to week.
- Effects to the environment
Bitcoin mining still remains to be a threat to the environment. A lot of electric power, coming from dirty coal plants is consumed, yet it is dangerous even to healthy human beings. This makes it unsafe for outdoor activities.
- Potential replacement
Though Bitcoin is currently ranking top in the market, other currencies are making quiet significant moves and might replace it soon. Such currencies as Ethereum have been of late accepted as a means of payment. This poses a threat to Bitcoin’s position.
It is evident that Bitcoin is of both positive and negative effects to you. However, advantages outweigh the disadvantages giving you a reason to consider using it. Those effects are discussed above. By going through them, you will gain a better understanding of Bitcoin.