We have all heard about Bitcoin and some other cryptocurrencies, and there is a trend of buying these digital assets in recent years, mostly because of their potential to get higher value in time and provide you with profit. One of the main reasons for such popularity is that cryptocurrencies are not under the control of any bank or the government, which means they are completely decentralized.
While investing in crypto and blockchain technology can bring you high profit, it is not easy to find the right one since there are hundreds of different virtual assets on the market today. Also, crypts are under frequent fluctuation, and you need to find the right time to invest in some particular cryptocurrency. There are many professional websites, like savingadvice.com, where you can find various articles, blogs, forums, and expert analysis related to cryptocurrencies and their potential. This website has a calculator that can help you to follow the current situation on the market and find the best terms for selling or buying the Bitcoin.
There are many advantages of trading with cryptocurrencies, but you are also under the risk if you don’t analyze the market properly. You can turn your investment in crypto into a real business, but it is necessary to be aware of all possible downsides as well. Here are the most important pros and cons of trading with cryptocurrency.
The Advantages of Trading with Cryptocurrencies
1. Great Potential
One of the main benefits of buying Bitcoin, Litecoin, or any other digital currency is that you can earn a lot of money if the value of them gets higher in the future, which is the main reason why trading is so popular in the first place. Also, there are many online platforms where you can trade, like Coinbase, Bitcoin Profit, Coin Tracking, and many more. These websites are the place where you can find the current value of digital currencies, and various statistics that can help you to make a choice and which one you should buy.
2. Simple Transfers
When it comes to the buying and transferring process, it is much easier than standard banking, and with smaller fees. However, it is necessary to create an e-wallet, which is a special software where you can store your digital money. There is no reason to worry about security since you are protected with blockchain technology, which represents a set of codes impossible for breaking. Every transaction is anonymous, and people can only see the number of e-wallets, without any private data.
Also, you have the flexibility to invest in many different digital currencies, which can improve your chances for a greater profit. Besides popular ones like Bitcoin, Ethereum, XPR, Litecoin, and some more, there are many cheap cryptos with a current value that is under a dollar but has a great potential to become much expensive in future. In that matter, you can invest in Ethereum, which represents a well-known and stable currency, and Cardano, which costs less than 1 dollar, but according to some experts, we can expect its value to be much higher soon.
What Are the Downsides
1. Frequent Fluctuation
While most people see that as an advantage, frequent fluctuation can also represent a great risk in the case that the cryptocurrency you invested in has some critical fall in price. Another great example is Bitcoin, which was worth over 20,000$ in 2015, while its price today is around 9000$. Also, its lowest point of value was only around 3000$ a few months ago. The demand for some currency has a big impact on its value.
In case of a scam, there is no way to sue anyone because cryptocurrencies are not under the control of any government. Furthermore, while currently there is no chance to break the blockchain codes, the technology is under constant development and hackers may find the way for that in the future. You could get into a problem with your taxes since there is not any regulation for the crypto market yet. And, it is confusing to determine the amount of taxes you need to pay. However, the biggest downsides are that there is always a chance that some digital currency will quickly lose its value over time, which will make your investment to be a complete failure. That is the main reason why you should be patient and informed before you select where to invest your money.
3. Potential Link with Criminal Organizations
Even if the system of blockchain is secure, you are still under the risk if you get an e-wallet from some uncertified developer, or buy coins on some platform that has a bad reputation. It is necessary to check online reviews and analysis related to both e-wallets and exchanges. Also, there are many problems with cryptocurrencies related to dark market and criminal organizations, since they are using digital currencies because of anonymity. For example, the only way to buy illegal products on the deep web is by using cryptocurrencies.
The Bottom Line
As we can see, there are both benefits and risks related to the market of cryptocurrencies, and we have to be aware of various factors that are affecting the price and stability of them. While it is important to follow trends, you should be careful when deciding about your investment. The best way to learn more about trading with cryptocurrencies is by visiting various websites like Savingadvice.com, and various forums where you can read about the experience of other people in this sphere. On the other side, it is natural for people who are selling some digital assets to praise it and tell how it has a huge potential. Always check several sources to be sure that you made the right investment.
We can expect that most of the countries will accept trading with cryptocurrencies as a valid way of payment. Some countries already did that, like Japan, Germany, South Korea, Vietnam, and many others. The biggest struggle is to find a way to determine the taxation process. The great advantage and reason why countries should accept digital currencies is that there is no central unit to control them. According to many financial experts, that can have many positive effects on the global economy. Plenty of these experts are also advising people that now is the right time to invest in various virtual assets because their value will become much bigger when they become a standard in the whole world.