In the last few years, the awareness surrounding cryptocurrencies has grown, and as such, their accessibility has increased. More and more people have decided to make a hobby out of cryptocurrency and, more specifically, bitcoin because it is the most well-known of all of the cryptos. Trading bitcoin can be incredibly lucrative, but it can also lead to losses if you aren’t careful. Let’s take a closer look at the pros and cons of trading bitcoin.
The Advantages
There are several pros when it comes to trading in bitcoin. First and foremost, it affords investors a certain level of freedom they wouldn’t necessarily have when dealing with fiat currencies. Bitcoin transactions are immediate, and they don’t face the same scrutiny or restrictions as traditional transactions. You can buy Bitcoin today from any reputable sellers on sites like Paxful. They aren’t subject to processing times or delays which does make trading incredibly easy.
There are records of all the transactions made because they form part of what is called the blockchain. However, your personal details aren’t made public, only the details of the digital wallet. So, while the transactions are completely transparent, you can still expect some security. When dealing with bitcoin, there are no hidden fees to contend with.
Transactions must be approved by the sender, which gives you time to verify the sender’s details. Some digital wallets also have additional security features like higher levels of encryption or additional identity verification like passwords or even fingerprints, et cetera. The wallet houses your personal information, but only the details of the wallet are needed when making a transaction which minimises the possibility of identity theft.
The Disadvantages
There are also a few disadvantages that you should be aware of. Firstly, the cryptocurrency market as a whole is inherent with risk and market volatility. This volatility can lead to price surges as well as drops which depending on your investment strategy, could lead to losses. Bitcoin, and again cryptocurrency in general, is still relatively new, which could mean that, as it stands, the whole concept remains a little underdeveloped.
There are several aspects that could do with evolving further, but this is likely to happen over time anyway. In addition to this, because crypto is so new, the information surrounding them can sometimes be a little tricky to access for the layperson who doesn’t know where to look. This can make it difficult for investors.
In Conclusion
Arguably, there are more advantages than disadvantages to investing in and trading bitcoin, and this does speak to its increase in popularity and its more widespread use in the last few years. The use and function of cryptocurrencies, in general, will continue to evolve as time goes on, providing its users with more applications. Truthfully, the best thing that you can do if you choose to get into cryptocurrency is to educate yourself as much as possible before you make any commitments or spend any money. Ensure you are using digital wallets where possible and that you know how to protect your investments.
