Digital currency also referred to as cryptocurrency has become a real and popular alternative to cash. Digital currency operates on a global scale and is an independent way to generate and transfer money (essentially an independent financial system) without the use of a central bank/ centralized banks. This means that all digital currencies are exempt from government interference. The most used digital currency is bitcoin, and it has seen both rises and crashes in its value. No matter what reason you may be looking into digital currency, it is important to know about the pros and cons. Here is everything you need to know about cryptocurrency.
The Pros of Using Digital Currency
Here are a few of the advantages when using digital currency:
No Fees to Store or Use Your Money
One advantage of digital currency is that unlike banking systems or other financial institutions, there are no fees to keep your funds. That means no overdraft fees, transaction fees, or other transaction costs that can come with having a bank account.
Constant Tracking Available
With digital money you can track where your funds are, any time of day, at every single step. For many people this helps them feel secure and on top if their finances.
With a bank account large purchases such as a home or car, there is often a wait time in order to make the funds available. However, with digital currency there is no need for a middleman.
Improved Accessibility of Funds
You can use your digital money right away, no need to wait for deposit times or other verification methods to use your funds.
Your Identity is Protected
When you purchase things via your debit or credit card, you will have to provide personal information, which can be compromised. However, with digital currency there is no need to provide that information, and no need to worry about identity theft or fraud.
The Cons of Using Digital Currency
Below in more information on some of the cons that come with using digital currency:
Your Money is Prone to Hackers and Security Threats
New technologies are always being used to protect people online. However, virtual currency is prone to hacking and fraud. And so, keep that in mind when using or investing into virtual currency. One way to add security is to use trusted platforms like PayPal when buying or selling.
No Way to Know for Sure who Else is Participating.
Unlike government regulated funding, digital currency doesn’t have regulators. And so, can be easily used for money laundering, and criminal activity. And a lot of financial experts agree that this is already going on, as this system is easily accessible all across the world.
High Risk Industry
Similar to the stick market, or technology that are start ups, the cryptocurrency market can Come with volatility. And although there are experts that can analyze algorithms, there is never a hundred percent certainty of return. For example, in the past the value of bitcoin has gone through several fluctuations, with digital coins being worth little to a much larger amount overnight or even sooner.
Unpredictable for the Future
Unlike currency that exists within our financial systems, it is hard to tell where digital currency will go. Although many countries are starting to embrace and use cryptocurrency, as of now the longevity is not crystal clear, especially when compared to traditional payment methods, and payment systems.
As of now, cryptocurrency is here to stay. For many people, the pros of ease, flexibility, potential rewards of farming, and simplicity are what make digital currency apart of their digital wallet. For others, the risks, outweigh the advantages. No matter what side you are on, it is important to know as much as you can about both the pros and cons of digital currency!