Pros and cons of cryptocurrencies as a means of calculation and investment tool


Pros and cons of cryptocurrencies

In a matter of years, innovative digital currencies have gained immense popularity and surpassed world currencies in value and reliability. The opinion of experts on the account of cryptocurrencies and blockchain was divided. Many consider them technology capable of changing the world, others see a lot of shortcomings that impede their implementation. The main pros and cons of cryptocurrencies are discussed below.

The advantages of cryptocurrency

Cryptocurrencies are not like any other asset. They use blockchain technology, new to humanity, which has made them a competitive alternative to bank transfers, electronic payment systems, and even government money. Compared to existing financial instruments, cryptocurrencies have several advantages.


Most cryptocurrencies function decentralized according to the algorithm laid down in them. They are not controlled by government bodies, and all communication centers have the same rights and are equal to each other. In networks such as Bitcoin, even the developers cannot change the algorithm of their functioning.

 Low transaction costs

Transactions in cryptocurrency systems are carried out according to the P2P principle, without the participation of a central controlling authority. Reducing the costs of network maintenance can significantly reduce the commission for transfers.

Unlike banking and electronic payment systems, users have the ability to independently set the size of the commission and even send transactions without it.

Quick payments

Cryptocurrency transactions have a high processing speed. In addition, after adding a transaction to the blockchain, it becomes irreversible. The irreversibility of transactions allows you to prevent falsification of records and fraud in the system.


Confidentiality is one of the main advantages of cryptocurrencies. To use the system, you do not need to specify any personal data, which allows you to maintain anonymity and hide your expenses from the government, financial institutions or marketing companies.

You are the only owner of your money

Access to crypto coins on the wallet can be obtained only by providing a private key, which is located only with the owner. This means that no one can write off coins from the account or freeze their movement.

Cryptocurrencies can become a means of protecting their capital. In case the bank where the savings were stored has declared itself bankrupt, or the government is unscrupulously fulfilling its obligations, the coins on the cryptocurrency wallet remain subject to the user’s control and will become financial insurance.

Strong data protection

When paying for goods and services, the buyer always risks his personal data, which can be intercepted at the time of payment or stolen from the seller, and subsequently used against the owner. In cryptocurrency transactions, no personal data is transmitted to the seller, so you can be sure that the information does not fall into the hands of attackers.


Cryptocurrencies have a sophisticated inflation prevention mechanism. In particular, in the Bitcoin network, inflation is prevented by several features:

  • Limited issue of 21 million coins, which cannot be changed;
  • New coins are issued strictly every 10 minutes;
  • Every 4 years, the issue of coins is halved.

Each cryptocurrency network has similar methods, which allows you to predict in advance how many coins will exist in a certain period of time. In addition, there is no controlling body that could take a sole decision to increase emissions.

Simple and affordable

Many people mistakenly believe that cryptocurrencies are too complex a subject to study and use. In fact, they are available to everyone and anyone can start using cryptocurrencies even without technical skills and understanding of the system. It is enough to have a cryptocurrency wallet, get a few coins and have access to the Internet.

Cryptocurrencies are open and accessible to everyone, including people living in disadvantaged regions where other financial services are not available.

Cryptocurrency – an incentive for financial innovation

Digital coins have a new mechanism, which is designed to solve the shortcomings of other payment systems. In particular, to increase the speed of transactions, minimize costs, increase security, as well as implement the sending of micropayments to any corner of the world with minimal fees. The source codes of cryptocurrencies are presented in the public domain, which means that any developer can use them to create more advanced systems, which will inevitably lead to the improvement of financial models.

In addition, the blockchain technology used in most cryptocurrencies can be applied in any industry where data protection and storage are required. Already, research is being carried out on its implementation in the banking system, the real estate market and insurance.

Cons of cryptocurrencies

Having studied the advantages of cryptocurrencies, we can definitely say that this is a progressive technology with huge potential for development. But despite all the advantages, like any technology, cryptocurrencies are not without a number of disadvantages:

High volatility

According to experts, this is one of the features of cryptocurrencies that impedes their globalization. Currently, the rate of cryptocurrencies is very variable and can change over a wide range over short intervals.

It is likely that the initial volatility is caused by the novelty of the asset and, as the number of users increases, the cryptocurrency rate will become more stable.

Hacking Risk

Since cryptocurrencies exist in digital form, they can become the prey of cybercriminals. Cryptocurrency services must have a high level of security to prevent theft. It should be noted that this vulnerability is not caused by the very features of cryptocurrencies, but by the security of storing access keys.

Cryptocurrency networks are also subject to the so-called 51% attack, when most of the network’s power is concentrated in the hands of one person and he has the right to independently make decisions about transactions. This situation is fraught with double waste, obstructing the transactions of other users and selfish mining.

Criminal use

Confidentiality and decentralization of cryptocurrencies have repeatedly been reproached by them, since this makes them an attractive means of payment for the criminal world and a means of money laundering.

The saddest example was the use of bitcoin to pay for drugs and fake documents on the Deep Web trading platform. But according to this principle, cash can also be put at risk, because they also take part in criminal schemes.


Cryptocurrencies – a new technology that gave impetus to the modernization of the entire economy. Already, a huge number of people use cryptocurrencies to pay, participate in their mining and earn money on market volatility.

Today, cryptocurrencies are at the stage of formation and annually released improved versions that try to eliminate the shortcomings in the technology. But it’s already obvious to many experts that cryptocurrencies are the money of the future with great potential for development.

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