Technology is advancing every day, and both major and minor companies are taking advantage of this situation. One thing that grew thanks to modern tech is cryptocurrencies. Considering that most businesses are exploring all means of trading that exist, it’s no wonder crypto found its way to many businesses all over the world. Today, even the commoners have heard of Bitcoin and similar digital currencies.
This is what made it easy for many companies to install them as a means of trading. But, regardless of how great are the cryptocurrencies, using them still has some drawbacks. This shouldn’t be something you need to lose sleep over, as they’re not enough to cast a shadow on all the positive sides. In this article, we are going to discuss the advantages and disadvantages of digital currencies for business. If you are a company owner or run a small business, you’ll find these useful. Let’s begin with the good sides.
Currencies decline; it’s just what they do. This has happened to many coins all over the world in many countries. Times passes, and they decline; it’s like a circle of life. Upon releasing a specific currency, the one who releases it only allows for a particular number to be on the market at one point.
With time, more gets printed, which devalues it. When it comes to cryptocurrency, most of them already have the exact number of available coins. It is because of it, with time, its value would only grow. When you look at this from the point of today and, let’s say, five years into the future, the possibility of inflation is almost nonexistent.
Privacy and Security
As the Internet evolved and became a public market, we all learned to value our privacy and security more. Cryptocurrencies started emerging one decade ago, and since the early days, their focus was on these two things. The first steps towards achieving them were encrypting the blockchain on which most cryptos rely on.
When compared to standard e-transactions, cryptocurrencies offer a higher level of security and safety. Most of them require users to use a pseudonym and two-factor authentication. Security and safety are one of the primary reasons why many big businesses are turning to crypto means of transactions.
When compared to regular currencies, crypto has one massive pro; it is decentralization. Unlike most FIAT currencies, Bitcoin and similar cryptocurrencies are decentralized. The power regarding cryptocurrencies lies in the hands of its developers, people who own a lot of coins, or in the hands of organizations that have crypto owners as members. There are multiple factors, and no fraction can’t seize control.
Cryptocurrencies are free of any monopoly, and thanks to being decentralized, no one is able to control it once it comes out on the market. The value is dictated by the market and not by any government or an individual. Most crypto businesses are thrilled with this state of affairs, as they work with a currency that is safe and stable but, above all, independent.
Now that we shared just a couple of positives regarding cryptocurrencies, the times has come to look at the dark side. Unfortunately, with all their good sides, cryptocurrencies also have some to be wary of. But, before checking them out, you could also visit www.digitalconnectmag.com, and learn a thing or two about BTC investments.
Cryptocurrencies can be Used on the Other Side of the Law
The owners of cryptocurrencies and exchanges put a lot of effort into safety and security that it also backfired on them. They put it on a high level, which is often impenetrable to government officials. So, once we have a breach of security and someone steals the coin, it comes down to authorities to find the culprit.
But, thanks to the levels of security installed by developers and exchanges, this sometimes takes too much time. Also, before cryptocurrencies attracted as much attention as they do today, BTC, for example, was used for many illegal transactions. There are recorded cases when it was used on the dark web for drug trafficking. Today, people on the other side of the law are often using crypto for money laundering. They take the dirty money, buy crypto with it, and mask it with transactions on the digital market.
Decentralized But Still Controlled
As we mentioned above, one of the bright sides of cryptocurrencies is that they are not centralized. As much as we enjoy this fact, it’s not all roses. When we say they’re not centralized, we state that they’re not under the control of power, such as a government. Even if this is the case, they’re still under the influence of their creators, developers, and in some cases, independent organizations.
Even if this is not done often, these organizations or individuals are able to influence the value of their coin and manipulate both price and the market. For example, many people still don’t believe that Bitcoin’s peak in 2017 wasn’t an accident. Everything is possible, and you should have this on your mind.
Cryptocurrencies Can be Hacked
Once again, we’re back to safety and security. These two things are the focal point of almost all crypto, but they can be breached by crafty individuals. Most cyber-attacks occur on exchanges. Cryptocurrencies on their own remain safe to an end, but exchanges often fall prey to hackers. Most of them require users to have an e-wallet and ID to be able to trade crypto. Data that is contained in these two things can be stolen, and it has happened in the past. Once the hackers have access to your account, they can do whatever they want with your coin.
In most cases, your funds get transferred to other accounts, and all trace of them disappears. You probably heard of the Bitfinex and Mt Gox accidents, when millions of dollars worth of crypto went missing. Thankfully the levels of security on exchanges increase every day in order to prevent things like this from happening.