Bitcoin is the first cryptocurrency to have been launched in the market, it has many benefits, but just like any other asset has risks alike. Before we move into so many details, let’s talk about what bitcoin is and how it gains value. This will help you understand both the pros and cons of bitcoin trading.
What is bitcoin, and how can you use it?
Bitcoin is the first crypto that was introduced in the market and was made using cryptography protocols. This means that bitcoin is a decentralized currency that you can purchase as an asset.
This asset can also be used as a currency for making payments of daily items and expensive things alike. Bitcoin can be taken anywhere and exchanged for the local money of the country.
When you do so, you don’t even have to pay the exchange fees. Bitcoin also has other benefits and uses. The blockchain technology that came with bitcoin has made history by becoming the first ledger that is very efficient. Hence, not only bitcoin but the blockchain is also being used rapidly.
Why do you think that bitcoin has value?
Bitcoin has value for different reasons, and these also define why people buy bitcoins in the first place.
- Scarcity- More than 18 million coins have been dispersed. While only 21 million are to be mined, out of which 1.5 to 3 million are lost in the blockchain.
- Mining- As it is being mined by engineers trained to do so, they are charged. Additionally, the bitcoins have to be encrypted before they can be dispatched.
There, however, are other reasons as well, but these two are the topmost ones. Now, that you understood the basics of what bitcoins are, how they can be used, and what gives them value. Let us talk about the pros and cons of trading in bitcoins.
The Benefits of trading in bitcoins
There obvious are many benefits, and one of them is bitcoins being safe from breaches. Let us learn about the other benefits that bitcoin will bring you.
- Bitcoin is sent overseas without having to pay for the exchange rate.
- It can be used for making daily payments and expensive payments.
- The blockchain is the only ledger that allows its users to see all the activities done using bitcoins
- It can be used for keeping as assets and withdrawn in the future
- The blockchain can be used as a public ledger
- Bitcoins can be exchanged at any time you want.
- The increasing fame of bitcoin will result in a price increase
The Risks of trading bitcoins
Bitcoin is one of the digital assets. It is the magnet for crime, for this reason, the government has regulated it. The government has imposed laws that mention taxes on capital gains. This means the amount that you earn from selling your bitcoin will be subjected to tax. The other cons or risks are-
- The bitcoin that you have can be lost if you lose your private key
- The bitcoin that you lose will never come back to you or be recovered by anyone else.
- If the crypto exchange server you trade from crashes, you can lose your money even then.
- Bitcoins are banned in some countries, and they can not be used in places it is illegal.
- The prices of bitcoin are ever flatulating, making it volatile in nature (however, this can be a good thing as well).
Like any other investment or currency, even bitcoin is entitled to its own risks and benefits. Now, the decision is yours, will you put a step forward for investment thinking about its prosperous future, or will you not take the risk.
After follow this link will allow you to understand if at all, it is a good time for investment or not. If you see the prices are a little less, buy your share of bitcoins and store it for a long-term duration. This will help you to draw a lot of profit when you finally decide to sell it. But if you still are confused, take your time and find out if at all you will invest in bitcoins or not.