Trading bitcoin today is more than just a trend, as it comes with numerous benefits that will make the bitcoin lifestyle worth it for anyone who has decided to follow that path. However, trading bitcoin has both upsides and downsides, some of which are highlighted below.
1. User Anonymity
Bitcoin allows you to stay anonymous in the sense that your address, private and public keys, and transactions are all encrypted in text strings. This will ensure that no one can link the public address to the true owner of the account. The system has been designed to protect your privacy and although your public transactions will be recorded, you remain anonymous. A bitcoin user can rather be identified via public keys, numerical codes, and pseudonymous usernames.
2. A Potential Source of Income
Bitcoin could be a quick and lucrative means of making money and certain people take advantage of the highs and lows. They buy when the price is low and sell when the price is high to make more returns. Interestingly, anyone can hop on this, as it does not require any form of expertise or special knowledge.
3. Transactional Freedom
Bitcoin doesn’t have any third party involved in transactions, which makes the process easier. You don’t have to deal with the fees and legal hurdles like you would with traditional currency. There is also a lesser risk of your money being manipulated. You could send bitcoin to another user and they will get it within a few minutes. This simple benefit of easy transactions is one of the major things that encourage more people to trade and use bitcoin.
1. Security Issues
The absence of a third-party authority or institution like a bank makes bitcoin more susceptible to security threats. There is a survey on Security and Privacy Issues of Bitcoin that gives you an insight into the threats enabling user privacy and more.
There will always be cases of scams and frauds wherever finances are involved and bitcoin isn’t an exception. However, in this case, your money can’t get refunded if you lose it to internet frauds, as the transactions are anonymous. To prevent this from happening, every bitcoin user is encouraged to tighten their security. Avoid sharing your private key with anyone and also ensure the platform you trade on or the wallet you use is secure.
2. High Price Fluctuations
If you follow the bitcoin trend from the last 10 years, you would notice how the price has fluctuated so far. The interval between the prices is so high that you could lose a huge part of your investments if you’re not careful. However, to make the most of it, you must be ready to invest on a long-term basis. It just gets frustrating for those willing to trade on short-term to make quick money but with a better understanding of how the market works, you can still benefit from it.
There are no investments without pros and cons. Bitcoin may have its downsides but it is still a fast-growing cryptocurrency largely talked about in the world today. If you would like to get started on bitcoin training, it is advised that you learn the basics and acquire some level of knowledge before you delve into it.
Written by Adam Eaton