Since it was introduced about ten years ago, many people became interested in blockchain technology, especially because of the cryptocurrencies that are made with this system. Also, one of the main reasons why digital currencies have become so popular is the rise in the value of Bitcoin, Ethereum, Litecoin, and many other cryptocurrencies. Moreover, there are various ways where you can make a profit from them, such as mining, trading, HODling, and more.
Besides representing the main source of creation for most of the cryptocurrencies, there are also other uses for blockchain technology, mostly because of its advanced protective system. We can see that some recent smartphones and smart homes have upgrades with this technology implemented for improved security measures. You can read more about this technology on rantlos.de.
Nevertheless, this technology is only at its beginning, and we expect its implementation in various services as well. However, besides many advantages, there are some downsides of using blockchain technology too. Here are the most important advantages and disadvantages of blockchain technology.
Advantages of Using Blockchain Technology
1. There is No Chance for a Scam
If you were ever using some transaction options with cryptocurrencies, you saw that every transaction can be visible in public, only without your data shown. The only thing that can be tracked is the amount of money and the serial number of the e-wallets that were part of the transaction. The blockchain represents an open-source system, and miners who are monitoring it can have a look at every transaction that is made. In that matter, there is no possibility of a fraud with this system, especially because the people who are monitoring over it must approve every action.
2. Fast Transactions
One of the main reasons why people are so much interested in cryptocurrencies is the fact that every transaction is immediately processed, and you don’t have to wait for it like when you are using a standard bank account. While some transactions over banking services might require a few days to complete, which can be a case when you are sending money on some account in another bank, the transaction with e-wallet is usually done within only a few minutes.
3. It is Not Controlled by Any Government
Unlike monetary systems of most countries and all banks and similar institutions, the crypto market is completely decentralized, and there is no interference of any country or financial organization. The main benefit of that lies in the fact that in most cases where countries and monetary systems tried to control some currency, there was inflation that leads to much lower value of some currency. On the other side, the price of digital currencies is shaped by the conditions on the market, demand, sales, popularity, and more.
4. Better Financial Efficiency
With the ability to transfer money with your e-wallet, you don’t need to use banking services for that, which is a great advantage, since banks and other services like PayPal, are charging a lot for the transfer fees. When you are making a transaction with cryptos, the fees are either minor, or there are not any at all. This leads to the point that people from all around the world could become much less dependent on banks and other financial organizations. For example, your company can pay you over e-wallets instead of banks, and both of you will avoid additional expenses.
Disadvantages of Using Blockchain Technology
5. Problem with Organized Criminal
Since transfers with crypto are untraceable, we hear a lot about criminals that started using it for selling drugs, and many other criminal activities. The best example for that is the website Silk Road, which was active on the dark web, and where you could only use cryptocurrencies. However, the government succeeded to shut this website down, but there is always a possibility for a similar one to exist. Also, there is a fear that some terrorist groups are gaining their finance with this technology.
6. Volatility of Cryptocurrencies is Very High
The main reason why people are interested in investing in cryptocurrencies is also the main risk, and that is a high level of volatility of most cryptos. Almost every type of digital currency that is based on this technology is constantly changing its value, and there are various factors that are causing it. Bitcoin is maybe the best example for that, with the price of under 1000$ before 2015, reaching over 20,000$ in 2017, while its price was only around 3500$ at one moment during last year.
7. Some People Have a Problem to Use New Technologies
While younger generations grew up with smartphones, PCs, tablets, and other devices, it gets much more complicated for older people to make used to recent digital services such as e-wallets. You have to new something about digital platforms and how to use them before you can successfully create your account and get an e-wallet. On the other side, many people choose to use the exchanges for storing their cryptocurencies, which is risky, since there are some cases where hackers managed to steal a lot of money from exchanges.
8. The Future is Undefined
While we can use it freely these days in almost every country in the world, the issue might be if some of them ban the use of cryptocurrencies and this technology as well. In that case, most of the digital currencies will probably become worthless. Some countries like the United States, Japan, or Germany are allowing you to transfer money and make sales with these currencies, and they even have some plans for implementing them completely in the monetary system. However, there is still a chance that governments could outlaw this technology.
The Bottom Line
While there are some risks from using them, and the possibility that the crypto market might get banned, which would hardly ever happen, there are many benefits that makes blockchain technology important not just for the cryptomarket, but for many other digital services since it can serve as an advanced way of protection. We can see that there is some corporation that became accepting cryptocurrencies, which is also a good sign. In the end, the global use of this technology could have a great positive impact on the economy.