Cryptocurrencies have all the potential to revolutionize the world of finance and question the very existence of traditional financial infrastructures. Is it really worth buying them? And what are the virtual currencies to bet on?
If you are confused, don’t worry. In our analysis, you will find everything you need to know about the advantages and disadvantages of cryptocurrencies. And if you still have doubts, take a look at our essential guide on cryptocurrencies.
4 advantages of cryptocurrencies
Although this is a fairly recent invention, if you think that Bitcoin was born only in 2009, one thing seems very likely: cryptocurrencies are not a fad and are destined to remain, with all the benefits and risks that come with it. There are plenty of transparent and secure platforms for trading virtual currencies and the potential benefits for end-users – if you know your way around, the world of crypto can offer you so much. However, there are also pitfalls in this world (for those, take a look at the section on disadvantages), along with some helping immediate edge products.
Who does not venture does not gain
Today there are more than 10,000 cryptocurrencies in the world, each with its own peculiarities. But they all share the fact that their value can suddenly skyrocket (or collapse). Prices are defined primarily by the supply of coins extracted by miners and by the demand of buyers. And it is precisely the dynamics between supply and demand that determine the final price. The price of Ethereum, for example, practically doubled from July to December 2021. However, we don’t want to fool you: volatility is also one of the biggest drawbacks of cryptocurrencies, and their price can also plummet just as quickly.
The blockchain behind cryptocurrencies is a secure technology
Some of the main advantages have not so much to do with cryptocurrencies themselves, but rather with the infrastructures that govern them. We are talking about the blockchain, the decentralized ledger for storing data that tracks every transaction carried out within it. Once register in the blockchain, the data can no longer be deleted. And since the blockchain is structure in a decentralize way on so many computers, hackers cannot attack the entire network at the same time. This is why the information save in the blockchain is safe.
Fewer traditional banks and fairer and more transparent financial systems
Generally, the financial system is center around third parties acting as intermediaries to execute transactions. In other words, every time you carry out a financial transaction, one or more “central” subjects are involve who are responsible for regulating the flow of operations. And the financial crises trigger since the early 2000s have led some to doubt the validity of this model. Blockchain technology and cryptocurrencies represent an alternative to this system: since they can be view anywhere and by anyone, they allow end-users to be more closely involve in the financial markets and in general also to carry out transactions without the need for intermediaries.
The cryptocurrency market never stops
Another advantage over banks is that cryptocurrency operations never stop. Thanks to uninterrupt mining and 24/7 transaction logging, you can buy, sell or trade tokens wherever and whenever you want. This aspect has such an impact that traditional markets are starting to evaluate the possibility of allowing the activity even outside regular hours, but it is a hypothesis that is still a long way off. For people interest in exchanging currencies at any time of day or night. and the world of cryptocurrencies could be an excellent opportunity from this point of view.