What Are the Advantages and Disadvantages of Bitcoin ?
People who are unfamiliar with how bitcoin or other electronic currency works might not understand how advantageous and attractive a move into bitcoins might be. A common misconception about electronic currency is that you need to have a bank account in order to use it. Making a simple online transaction in bitcoins can be very inexpensive. When performed in cash, especially in bitcoin, the expense is non-existent or practically non-existent. Bitcoins, unlike traditional e-mail and Internet banking, has no geographic restrictions.
Adoption of Cryptocurrencies
There are advantages and disadvantages associated with the adoption of this new currency, as there are with any new technological advancement. Advantages include low costs and fast transfer times. In contrast, there are some disadvantages that could limit the wide reach of bitcoins. The most notable disadvantages are concerns about government authorities and security risks, both of which are significant concerns with traditional physical currencies.
Risks of Bitcoin and how to Mitigate Them
While it is impossible to completely eliminate the risks inherent in using cash, there are measures that can be taken to reduce them. One of the most important disadvantages of Bitcoin is the ease with which information that is held by private keys can be accessed by anyone who knows the private keys. This is referred to as public key cryptography, and it is a major cause of concern for those who are concerned about privacy. The good news is that there are ways to improve on this problem. Two solutions to this problem exist, both of which deal with the issue of private keys and their availability to outsiders.