Investing in Bitcoins – Pros and Cons
Have you ever wondered whether you should invest in cryptocurrencies like Bitcoin? Unfortunately, the information that is out there about this is conflicting at best. This is something that Prescott Regency, who provide a cryptocurrency trading platform, aims to address. They do so by providing people with information on what Bitcoins are, and what their pros and cons are. Overall, however, Prescott Regency aims to eradicate world poverty by ensuring everybody has access to a proper financial management system.
What Are Bitcoins?
Bitcoins are a form of digital currency. Essentially, it is money that exists only online. It can be exchanged for physical currency, however, and you can use fiat currency to purchase cryptocurrency. However, its main difference – and for many, this is its key benefit – is that it is decentralized, rather than being managed by central banks or governments.
Advantages of Bitcoins
- It is very easy to send money because you don’t have to go through an intermediary bank. Money can be on the other side of the world in an instant.
- There is only a limited supply. In fact, only 21 million Bitcoins were ever mined. In other words, it is not possible to print more money.
- It is private. That said, it is not 100% anonymous. Rather, all transactions can be seen in the public Bitcoin ledger, which is the Blockchain. However, this does not show any identifying details, only that it is linked to a specific address.
- It is very cheap to make transactions, as there are no fees attached to sending or receiving money through Bitcoin. This is why more merchants have now started to accept them, as they don’t have to pay the expensive MasterCard or Visa charges.
Disadvantages of Bitcoin
- It is a risky currency with significant price fluctuations. Indeed, its value often drops by 20% to even 50% in a matter of day. This is because the Bitcoin market is open 24/7. Sometimes, the price really tumbles, as it did a few years back with the Mt Gox hack. It tends to recover, but there is never any guarantee of its price.
- The transaction speeds can slow down somewhat, which is in line with digital developments. This is addressed by Prescott Regency, however, by also offering other, more modern cryptocurrencies that do not face this problem.
- A Bitcoin transaction cannot be reversed. Hence, if you make a mistake and send some money to the wrong person, it is theirs to keep unless you convince them to send it back. There are stories of people being hacked and losing all their Bitcoins in an instant.
So, are Bitcoins and cryptocurrencies good investments or not? As with all investments, there are pros and cons, risks and potential benefits. Only you can decide whether you feel those risks are worth it or not. The overall consensus, however, is that cryptocurrencies are the way forward and that this is where the next big dot com bubble will be, with many people making millions.