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Between enhanced security and delayed transactions, we reveal the real advantages and disadvantages of cryptocurrency prices. Cryptocurrencies have the ability to transform the financial world as we know it, and even challenge the very existence of traditional financial institutions. But what are the pros and cons of cryptocurrency? How do you decide which one to invest in, or even whether to invest at all?
If cryptocurrencies seem complicated to you to understand, don’t worry. We’re here to explain their actual pros and cons so you can make informed decisions. And if those concepts are still a little fuzzy, check out our guide to getting started with cryptocurrency .
5 advantages of cryptocurrency
Although Cryptocurreny Prices are a relatively recent invention (Bitcoin, for example, was launched in 2009), they are already well established, and have been for a long time, with all the advantages offered. Between promises of big earnings and ultra-secure 24/7 transactions, the world of cryptocurrencies offers a lot of advantages – if you know how to take advantage of them.
1. High Risks…and High Winning Potential
More than 10,000 cryptocurrencies are present on the market today and each has its very specific characteristics. However, they all have one thing in common: their tendency to experience sudden increases (and decreases) in value. Prices are determined primarily by the supply of assets from “Bitcoin miners”, and the demand for those assets by buyers. This dynamic of supply and demand can generate high gains. The price of Ethereum, for example, almost doubled between July 2021 and December 2021. Investors who were able to commit at the right time must have been congratulated.
2. The blockchain technology behind cryptocurrencies offers maximum security
Some of the major advantages of cryptocurrencies are not related to the currency itself, but to the infrastructure that supports them. This is the blockchain , a decentralized data storage ledger that tracks every transaction undertaken through it. Once a transaction is entered on the blockchain, it can never be deleted. And since the blockchain is stored in a decentralized way on multiple computers, no hacker can access the whole chain at once: when they are entered, the information is secure for good.
3. Farewell to traditional banks, the time has come for a fairer and more transparent financial system
Generally speaking, our financial system revolves around third-party intermediaries who carry out transactions. Which means that when you make a transaction, you are giving your trust to one of these intermediaries, and with the recession of the early 2000s, many people wondered if it was finally a good idea. Blockchain and cryptocurrencies offer you another solution. They are visible to everyone, everywhere on the planet. You can therefore invest in the financial markets and carry out transactions without any intermediary.
4. Cryptocurrencies are available 24 hours a day
Another advantage of cryptocurrencies over banks is that their market is always open. With cryptocurrency mining and round-the-clock transaction logging, you don’t have to wait for the NYSE, NASDAQ, or other stock exchanges to open to start buying, selling, or trading cryptocurrencies. This has had such an impact that traditional stock exchanges are in turn looking for ways to trade outside of bank hours…but we are probably still a long way from that. For investors who are attentive around the clock, cryptocurrency could thus be the best way to generate income outside normal working hours.
5. Cryptocurrencies could allow investors to counter inflation
Cryptocurrencies are not tied to a single currency or economy, so their price reflects global demand rather than national inflation, for example. But then, what about the inflation of cryptocurrencies themselves? As an investor, overall, you can rest easy. The number of assets is capped, so the quantity available cannot get out of control, and therefore, no risk of inflation. Some currencies (like Bitcoin) have an overall cap and others (like Ethereum) have an annual cap. But in any case, this approach avoids inflation problems.
