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Cryptocurrency Benefits and Drawbacks

About this sample

About this sample

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Words: 645 |

Page: 1|

4 min read

Published: Feb 12, 2019

Words: 645|Page: 1|4 min read

Published: Feb 12, 2019

Table of contents

  1. Introducition
  2. Benefits and Drawbacks
  3. Bitcoin Mining

Introducition

A cryptocurrency is a digital asset in which encryption techniques are used to regulate the generation of units of currency designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, verify the transfer of funds Is its organic nature; it is not issued by any central authority, Well the nature of cryptocurrency transactions makes them well-suited for a host of Criminal activities, such as Money Laundering and Tax Evasion …!

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The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto. As of September 2015, there were over 14.6 million bitcoins in circulation with a total market value of $3.4 billion. Bitcoin's success has spawned a number of competing cryptocurrencies, such as Litecoin, Namecoin and PPCoin.

Benefits and Drawbacks

Benefits:

  • Cryptocurrencies make it easier to transfer funds between two parties in a transaction.
  • These Transfers are facilitated through the use of public and private keys (Encryption and Description) for security purposes.
  • These fund transfers are done with minimum processing fees,
  • Allowing users to avoid the steep fees charged by most banks and Financial Institution for Wire Transfers.
  • Bitcoin is the block chain it uses to store an online ledger of all the transactions using bitcoins,
  • Providing a limited threat from hackers.
  • Block chain as having important uses in technologies.
  • The Transaction costs by making payment processing more efficient.
  • Prices are based on supply and demand.
  • Cryptocurrencies are not Exposed to the threat of hacking.
  • More transportable than hard metals, and is outside the influence of central banks and governments.
  • You don’t need to share your identity or whereabouts or the details of the transactions.
  • Once you made the payment, you cannot chargeback.
  • You are the master of your money. You can keep it in your wallet and use it as per your wishes. There is no third party involved like a bank
  • When you talk about transactions using cryptocurrencies then there are no limits. You may be in a different part of the world Making payments using cryptocurrency is very easy.

Drawback:

  • Cryptocurrencies are relatively new and come with a learning curve. People end up investing without proper knowledge and lose money
  • People are not aware of how to use cryptocurrency and hence open themselves to hacker
  • Not many websites and companies accept digital currencies yet. Very few countries have legalized the use of cryptocurrencies.
  • There is a possibility of losing your wallet.
  • If you have stored the money in the form of digital currency on your phone or computer, you better remember your password
  • If you mistakenly pay someone by using cryptocurrency, then there is no way to get a refund of the amount paid.

Bitcoin Mining

The Bitcoin network witnesses a great deal of transaction activity. Maintaining a record of these transactions helps users track what was paid to and by whom. The transactions Put during a given period of time are recorded into a file called a block.

Bitcoin and other cryptocurrencies that use Proof of Work Blockchains are maintained through a process called Mining In this system, miners – computers running the cryptocurrency's software client compete to find a new block, adding the most recent transaction data to the chain. They receive fees and a (in some Cases) a reward of new tokens in return

Bitcoin mining is the process by which transactions verified and added to the public ledger. known as the block chain…and also the means through which new bitcoin are released. The mining process involves compiling recent transactions. In the earliest days of Bitcoin, mining was done with CPUs from normal desktop computers Graphics cards

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Cryptocurrencies are used outside existing banking and governmental institutions and are exchanged over the Internet. While these alternative, they have the unique potential to challenge existing systems of currency and payments. As of December 2017 total market capitalization of cryptocurrencies is bigger than 600 billion USD and record high daily volume is larger than 500 billion USD.

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Cite this Essay

Cryptocurrency Benefits and Drawbacks. (2019, February 11). GradesFixer. Retrieved February 21, 2024, from https://gradesfixer.com/free-essay-examples/cryptocurrency-benefits-and-drawbacks/
“Cryptocurrency Benefits and Drawbacks.” GradesFixer, 11 Feb. 2019, gradesfixer.com/free-essay-examples/cryptocurrency-benefits-and-drawbacks/
Cryptocurrency Benefits and Drawbacks. [online]. Available at: <https://gradesfixer.com/free-essay-examples/cryptocurrency-benefits-and-drawbacks/> [Accessed 21 Feb. 2024].
Cryptocurrency Benefits and Drawbacks [Internet]. GradesFixer. 2019 Feb 11 [cited 2024 Feb 21]. Available from: https://gradesfixer.com/free-essay-examples/cryptocurrency-benefits-and-drawbacks/
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