Bitcoin is the first decentralized digital cryptocurrency, launched in 2009. Initially, it faced some criticism, but gradually continued to grow in popularity due to its advantages. Consider bitcoin in e-commerce. It is faster and more secure than other traditional currencies. Follow the given steps below for the advantages and disadvantages of the Bitcoin.
Private and anonymous
Bitcoin price transactions are completely private and anonymous, unlike payments made by banks. Bitcoin transactions is not traceable. The bitcoin wallet address will be visible if the person is not using a VPN. It is like the payment done in the account but do not who the accounts belong to. Do not use the same address in all places, otherwise, it can be traced.
Minimum or lower fees
Bitcoin transactions may or may not include fees as this depends on the priority of the payment. Faster processing requires a transaction fee but comparatively less. This is why it is preferable to choose Bitcoin transactions over digital or intermediary wallets.
Freedom of payment
Bitcoin Pay offers payments and can be transferred to anyone around the world. There is no third party or middlemen between them and the deal will never be affected due to the holidays. They are not bound by any borders or borders of any country, and there are no restrictions on payment either.
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They are irreversible, safe and do not contain any important information. As a result, it protects traders from any loss. Thus, you will see that so many people are considering investing in bitcoin.
No need for approval from any institution
The transaction does not require any approval from any institution or financial institution. Whenever you want to make a payment, you are ready to do it regardless of the time. Not only that, the recipient also receives the money within a short time. This means that for a short time the amount will be reflected in your wallet.
Bitcoin is very volatile and falls and rises at a faster pace. Hence, this may be one of the reasons why some people may not choose to invest in crypto. But, the disadvantage is turned into an advantage.
Degree of acceptance
Acceptance is another disadvantage, as some organizations are still in dilemmas about this. But over time, you can see that many companies accept Bitcoin transactions.
In the end
Overall, Bitcoin has more advantages than disadvantages. Basically, it depends on people how they want to use cryptocurrency. everyone can be mine cryptocurrency and this can be done by mining bitcoin through the system. In addition, there is no need to provide any personal information to complete the transaction. But it’s always important to remember where you stored your Bitcoin private keys. However, gets lost you will no longer be able to access your cryptocurrency.
When trading cryptocurrency, risks arise that can not only deprive the investor of profits but also lead to losses. This usually happens when people misjudge the risk and the strategy does not fit. Risk is an integral part of working with cryptocurrencies, and there are ways to minimize it and reduce the likelihood of losses to almost zero.
Arbitration by example
The abundance of unregulated cryptocurrency exchanges makes it possible to make money from arbitrage transactions, taking advantage of the fact that prices for the same asset vary widely across different platforms, explains Denis Voskvitsov, head of fintech company Exantech. As an example, the expert cited the so-called “kimchi prize”.
In early April, the cost of bitcoin on the South Korean crypto exchanges Bithumb and Korbit reached 77.9 thousand won ($ 69 thousand). But the average market price of the main cryptocurrency was at $ 58.5 thousand. In the field of digital money, this difference between quotations in South Korea and the rest of the world is called the “kimchi premium.” This concept arose back in 2017, when bitcoin was trading at $ 20,000, and on the South Korean exchanges its price rose to $ 24,000 (+ 20%). At the beginning of the month, the “kimchi premium” reached 18%. As of April 14, it is 11.6%.
To avoid losses, you need to diversify your investment portfolio as much as possible and select low-risk assets for it, says Apurv Gupta, co-founder of CAPHIQ and CMO at AMEPay . According to him, the better a crypto portfolio is diversified. The higher the potential return on investment, the higher the risks, he added.
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“Altcoins and DeFi products are on risk, so I would not recommend including them in your portfolio with a low-loss strategy, moreover SaurabhSingla, co-founder of CAPHIQ and contributor to INC42 .
The best scenario for breakeven trading is long-term investments in major cryptocurrencies such as Bitcoin and Ethereum, according to Binance CEO CZ. He advises to open a position not once for all available funds, but periodically buy additional assets in equal parts. This will average the purchase price and reduce the risks of entering the asset at the peak, adds CZ.
According to Denis Voskvitsov, it is theoretically possible to trade cryptocurrency without losses, using bitcoin futures with delivery in a few months – they have an impressive premium to the spot market. The expert explained that on some crypto exchanges the premium can reach 40%.
– What should a merchant do? Buy on the spot market and sell futures and, after a while, profit from the fact that futures and spot prices converge (when the expiration date approaches), ”says GMCoin founder Mehmet Ali Demirci.
The catch with this approach is that a short position involves borrowing money from a broker or exchange, warns Denis Voskvitsov. And this is not an interest-free loan, and payment greatly affects the final result, he added.