A cryptocurrency is a digital currency that has no middleman. It operates independently of any government or bank. This has led to government regulations in some countries. Anonymity, decentralization and transparency made cryptocurrencies highly popular. All of these assets have their downsides so here is a list of the pros and cons associated with most cryptocurrencies, including Bitcoin and Bitcoin Cash.
Cryptocurrencies are still young, and they are not very widely known. This is a limitation for people who want to use them in everyday transactions because there are not a lot of companies and businesses that accept them as a means of transaction. Another con is irreversibility of transactions. Once funds are transacted, the anonymity of users makes funds almost impossible to track. This means that users always need to be very careful when typing addresses and sending their funds. This type of anonymity makes cryptocurrencies susceptible to criminal activities. It enables criminals to buy and sell weapons and drugs for example, without getting caught. Finally, as many users know, cryptocurrencies are volatile and change in value happens often.
There are also a lot of pros that apply to all cryptocurrencies.
Transactions are transparent. When funds are transacted, anyone anywhere can verify them, if they have the proper knowledge (they are called the miners). One individual can hardly manipulate transactions and this is the biggest security feature.
Cryptocurrencies can be stored and transported easily using wallets, especially when large amounts of it are in question. Anonymity was listed as a con, but at the same time, it makes a pro. Thanks to it, transactions can’t be controlled and monitored by any organization which is another security feature.
There are pros and cons specifically associated with some cryptocurrencies, such as bitcoin and bitcoin cash.
These two are very similar and they even use the same blockchain but have different priorities. Bitcoin is still the most widely known cryptocurrencies that has no centralized governing body. Cons associated with Bitcoin are slow transaction time and high fees. Bitcoin Cash (BCC) on the other hand has faster transaction time but puts decentralization second place. A great pro for both is that miners can mine BCC as they mine Bitcoin.
Other altcoins have their own pros and cons, and here, two of the most popular altcoins will be listed. Ethereum (ETH) is popular for running smart contracts. It has a huge community but has higher inflation and is more complex to mine. Ripple (XRP) has a very short transaction time which makes it attractive to use but is often criticized for being backed up by the banks.
It’s important to keep in mind that cryptocurrencies are based on a very young technology that still needs to be developed, so in time some problems will most likely be solved and new features will emerge.