The Advantages and Disadvantages of Cryptocurrency
Cryptocurrency is rapidly becoming one of the most popular forms of investment, both in the financial and private industries. A lot of investors have already switched from the traditional stocks, mutual funds, bonds and securities to cryptosurfers. This is because cryptosurfers are able to trade in numerous financial markets including futures, options, commodities, Forex, and indexes. In fact, there are more than forty different market types that this type of trading can be used for. However, with the increasing popularity of trading these diverse market types, a need has emerged for a standard reference that would classify different types of Cryptocurrency.
A typical type of Cryptocurrency is peer-to-peer distributed ledger Cryptocurences. These are usually based on the distributed ledger technology that is used in the traditional banks and financial institutions. The major advantage of these cryptosurfers is that the records of every transaction that occurs are kept in the network itself. Consequently, all the users of this type of cryptography are able to view the entire database at any point of time. This also creates an accountability level and transparent suitability for the entire system.
Another type of Cryptocurrency is the centralized Cryptocurrency. This is mostly used by businesses and larger financial organizations. Large companies such as the Microsoft Corporation, International Business Machines, Credit Suisse, and others utilize this Cryptocurrency for their transactions. In this type, the currency is backed by the governments of various countries. Consequently, it is often referred to as digital money.
An alternate type of Cryptocurrency is called decentralized Cryptocurrency. This is a type of Cryptocurrency which operates without the use of a central government or a physical location. It is considered as a type of Internet Currency that works the same as the Internet’s Peer to Peer systems.
The major advantage of decentralized Cryptocurrency like bitcoins is that they are not subject to the intervention of any government. The governments that do not agree with Cryptocurrency may impose some kind of restrictions or even block the use of these currencies. On the other hand, most Cryptocurrency is quite welcoming to those governments that are trying to build their own stable economy.
Despite the disadvantages, it can be said that these Cryptocurrency possess several qualities that make them appealing to most users. Firstly, they are fast and cheap. Secondly, they are convenient to use. They also provide a degree of anonymity. Lastly, they are secure and have few disadvantages compared to other Cryptocurrencies. Thus, the biggest advantage of Cryptocurrency is that it can make money even without the need of physical assets or state backing.