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Bitcoin for beginners: pros and cons

03.03.2021
Bitcoin for beginners: pros and cons

One of the most popular cryptocurrencies is gaining popularity, appearing in the headlines and breaking value records, but the coin is far from perfect. Today we are talking about the advantages and disadvantages of bitcoin.

Pros:

— Simple entry point for investors

In order to start conducting operations with bitcoin, you don't need to have a license or higher education. The required minimum is to register on a cryptocurrency exchange and create a wallet. Of course, the ability to analyze and make predictions won`t be superfluous, but you can start without them - this is a fact.

— Decentralization

At the heart of cryptocurrency creation is decentralization - Bitcoin is not controlled by a private company or government. And more than 10 years ago, the coin creator, Satoshi Nakamoto, stopped participating in the project, handing over its leadership to independent developers.

— Cheap international transactions

Unlike the usual methods of transferring money around the world, Bitcoin transactions and their implementation speed doesn`t depend on the distance between the sender and the recipient. The speed is also different: instead of several days, the transaction will take an hour. The commission is difficult to predict in advance, but it may not even reach $1.

But even with such indicators, bitcoin is no longer at the cryptocurrency forefront in these indicators: some altcoins are faster and better.

— Independence from world events

In times of global instability, bitcoin, unlike national currencies, copes much better with deteriorating conditions: it cannot be affected by inflation and hyperinflation. During economic crises, people are more actively transferring money to cryptocurrency assets in order to preserve and even increase their capital.

— Continuity of network operation

Even if hackers decide to attack the first cryptocurrency network in order to destroy it, they won't succeed. The most they can achieve are failures that are easy to fix. But this hasn't happened for many years, and the preconditions are not expected in the coming years.

Yes, there is a danger of a 51% attack, but experts are confident that miners and companies won't destroy their own source of income.

Cons:

— Volatility

Instant appreciation of the value, as well as the fall in the bitcoin rate, is not news. History shows that a coin can become 50% cheaper per day. Also, the cryptocurrency is influenced by news: after the statements of influencers on social networks, the rate can grow instantly. Therefore, not everyone decides to store their assets in this cryptocurrency.

— Opportunity to be outlawed

Bitcoin may rise in price greatly in the future, but at the same time it will be outlawed. If the countries'  governments prohibit owning cryptocurrency and performing transactions with it, then users will lose their capital, or spend most of it on cashing out funds.

— Scammers

Bitcoin is often used for illegal transactions. In addition, wallets and exchanges are constantly attacked by hackers, and often these "actions" are successful: the cryptocurrency owners lose fortunes due to security errors or their own inattention.

— Hard user experience

Due to the lack of a single managerial link, bitcoin owners face big problems. If an investor forgets the wallet password or loses access to it, then he can no longer return his assets. The same thing happens in case of an erroneous operation - the transaction cannot be canceled.

— High commissions for withdrawals

Unlike transactions within the system, cashing out can be very expensive: the commission will be taken by counterparties. The average cost is about 2-5% of the transaction amount. But, also, the larger the amount that the user plans to withdraw, the higher the likelihood that the exchanger simply won't have such money.

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