Bitcoin is one of those things that you either have a good idea about or you’ve heard of it but have no inkling what it really is. The media has not really mentioned bitcoin really is.
In simple words, it’s a digital currency and a payment system. A two-in-one online currency solution that is gaining popularity all over the world. In this article, we’ll examine the pros and cons of bitcoin.
At the end of the day, you will need to decide for yourself if bitcoin is your cup of tea. Whatever your decision may be, bitcoin is here to stay and is gaining popularity with more and more people accepting it around the world.
Let’s look at the pros first.
1. Low transaction fees
Fees charged by online payment processors can be steep if the volume is high. Many merchants may balk at the fees and exchange costs over time. Since bitcoin is not controlled, it has very low fees and it’s still secure since it doesn’t rely on one point of failure as is common with normal payment processors.
It’s also much faster since there is no approval process or verification required because bitcoin is extremely private.
2. Bitcoin is deflationary
One of the unique features of bitcoin is that only 21 million bitcoins will be created. That is the limit. That means the value of the coins will grow over time.
3. No taxation
There are no taxes involved with bitcoin. This should be music to many people. No need to pay additional taxes on your purchases.
4. High degree of privacy
Almost all bitcoin transactions are extremely secure and very private. Users of bitcoin use pseudonyms for their transactions. This high degree of privacy makes the use of bitcoin very appealing to many people.
5. Simple to use
Bitcoin was made for the internet and it’s simply a dream to use. To send bitcoin to someone, all you will have to do is key in the receiver’s address and send. It’s as fast as sending an email. No hassle. No waiting times. An extremely flexible form of online payment.
6. Bitcoin is not regulated
That means there are no banks or financial institutions manipulating bitcoin to attain their own agenda. Bitcoin eliminates all third party interference in the transactions. Nobody can freeze a bitcoin account.
Traditional money relies on trust. The people need to trust the banks that they place their money in. With the collapse of financial institutions, dodgy practices, runs on the bank, etc. many people have lost faith in banks and actually view these institutions as detrimental to society in general.
Now we’ll look at the disadvantages and there are a few that we must bear in mind.
1. Bitcoin requires some learning
There is a learning curve involved when it comes to bitcoin. Unlike traditional money that we are accustomed to using from an early age, bitcoin is relatively new. The concept requires some study and understanding.
There are not many comprehensive guides on the subject. Users will need to understand the terminology such as block chain, cryptography, mining, etc. All these can be learnt by using Google. If you truly wish to understand bitcoin, there is more than enough information online to make you well-versed on the subject.
2. Not accepted in many places
Unlike PayPal which has been widely adopted, most merchants have not started accepting bitcoin as a means of payment yet. So, if you’re a buyer, you may not be able to make purchases from many places.
3. Difficult to obtain
In the beginning, it was relatively easy to mine for bitcoin. Now, as the number gets higher, it is getting extremely difficult to obtain bitcoin. Thankfully, there are more bitcoin exchanges opening with more willing sellers.
4. Bitcoin transaction can be slow at times
Most bitcoin transactions are fast but since this a peer to peer system, there is a time set for confirmation on the transaction. The bigger the transaction, the longer the wait. You can opt for zero confirmations and not have to wait as long but it would be wise to wait.
5. Bitcoin can be stolen
Even though bitcoin is a digital currency, it can still be stolen. Many bitcoin owners store their data in digital drives and secure these drives in safety deposits to ensure they’re not stolen. You will have a digital wallet to protect your bitcoin but you must know how to do it correctly.
After weighing the pros and cons, you’ll notice that bitcoin is worth considering as a means of payment online and definitely worth exploring. Take your time to understand the system and see if it will work for you.