So now that you know what a cryptocurrency is, let's look at some of their advantages and disadvantages, beginning with the former.
The Advantages of Cryptocurrencies
Fees, if any, are lower than traditional methods of payment, such as using credit cards or bank transfers.
Transaction settlements are also much faster. For example, some credit cards and banks may have you waiting hours or even days for payments to clear, whereas, with cryptocurrencies such as Bitcoin, payments can be immediate.
Furthermore, due to its underlying immutable blockchain foundations, once a transaction has been committed, it cannot be changed or reversed, therefore mitigating the risk of fraud.
Cryptocurrencies cannot be counterfeited or double-spent. And don't worry if you're not familiar with the term double-spent, as we'll be covering the topic in more detail in our upcoming double spending article.
Finally, Cryptocurrencies are also far more accessible than traditional fiat currencies, allowing easy access to individuals who for whatever reason, may otherwise struggle to open a bank account
The Disadvantages of Cryptocurrencies
Cryptocurrencies are not universally accepted as a method of payment, so if you're looking to spend your cryptocurrency, you'll first need to ensure that it is accepted as a method of payment by the merchant you’re looking to buy from.
Legislation surrounding cryptocurrency is forever evolving and varies from region to region, which can make it difficult to keep up to date with the law.
Most cryptocurrencies have no inherent value, and their worth remains somewhat volatile, although, we are beginning to see new players link the value of their cryptocurrency to tangible and intangible assets, such as diamond or energy derivatives.