Bitcoin (BTC) is undoubtedly the best known cryptocurrency in the world. It was the first digital currency ever created, and to date, it remains the largest and most popular digital currency in the world.
Even so, it gained most of its popularity in 2017, when the cryptic trend has become really big and people have suddenly become aware of digital money. Even so, there are still many people, especially new traders and investors, who do not fully understand what Bitcoin is, what makes it important and whether or not they should invest in it.
While the investment question is something that every investor must determine for himself, we can help them make a choice by presenting pros and cons of Bitcoin. These are not reasons why you should or should not invest in BTC. These are simply positive and negative facts related to the number one cryptocurrency in the world.
The pros of the bitcoins are many and the whole trend of cryptocurrencies has become so great because this single currency has brought so many positive changes to the financial world. To be honest, it has its flaws, which will be discussed later. For now, though, let's focus on its advantages and positive aspects.
Decentralization as a concept existed in people's minds for a long time. However, it was Bitcoin who first introduced practical methods to achieve this concept. While many believe that there are centralized factors behind the currency (such as mining basins), it is still much more decentralized than any fiat currency. It does not have a single central authority that controls it or its blockchain, and all decisions and work are done by the community.
2. Low rates
Another big reason why Bitcoin has become so popular is the low cost of transactions. Making transactions via BTC is much cheaper than card payments or even online services like PayPal. This makes it more practical and practical and allows users to save a lot more.
3. International payments are instantaneous
Making cross-border payments through traditional systems is a long and cumbersome process. Not only do you need to use intermediaries like banks, but they usually do not trust each other, which is why every transaction must be validated before it is completed. The process can take a long time and therefore money often takes days to reach the recipient. Furthermore, doing so is expensive, which is particularly difficult for those working abroad to provide for their families in developing countries.
Bitcoin can easily solve these problems. We have already talked about the fact that taxes are quite low. However, since it is a P2P cryptocurrency that does not need intermediaries, all transactions are almost instantaneous. All you need is to be processed, which is done in groups of transactions called blocks.
4. Bitcoin is popular
As mentioned earlier, Bitcoin has been popular ever since it was created, but it became famous around the world in 2017. Despite the fact that many people still have no idea what Bitcoin is or how it works, they still felt its first name. Due to its popularity, BTC has a strong presence in every cryptocurrency out there, and it is one of the rare few coins that can be bought or sold for legal currencies such as USD.
5. There is a limited supply of it
Unlike many other altcoins, there are no billions of BTC coins out there, and its total supply is only 21 million units. This means that there will always be only 21 BTCs, always. This will ensure that its price will be extremely high, given that more and more people enter the encrypted market and the demand for coins increase.
Now that we know some of the biggest advantages of using BTC, it's time to mention some of its flaws. It is not a perfect currency at all and has more than a good part of its problems, such as:
Bitcoin has had scalability problems since it was created. Because the block size is only 1 MB, it means that you can process a limited number of transactions at the same time. At the beginning there were not many people doing these transactions, so it was not a problem. However, over time, Bitcoin has become popular and now there are many more transactions than what its system can handle at the same time.
This causes long waiting periods before the transactions are approved, which in turn increases the rates. Developers have been trying to solve this problem for years and many believe that a solution, the Lightning network, may be the one that will solve the problem, at least to a certain extent.
2. Privacy issues
Another negative aspect of BTC is the fact that it stores public keys of users in the public domain. As such, there is the possibility that an experienced hacker can discover the origin of any transaction and perhaps even intercept it.
3. A possibility of being replaced
As mentioned, Bitcoin has a number of problems, and they have been around for a whole decade now. As a result, numerous errors have emerged, trying to solve these problems and provide better solutions. This is the way all Bitcoin's hard forks became, as well as other altcoins later.
This is also the reason why many believe that one of them could end up replacing a BTC day. Others, however, believe that Bitcoin will remain the driving currency, despite its flaws. It is the one that gave life to the encrypted space, and can never be replaced, regardless of advanced future coins. It remains to be seen whether this is true or not, but for now, Bitcoin has maintained its position successfully for ten long years, and there are no signs that this will change soon.