The pros and cons of cryptocurrency: A guide for new investors

The pros and cons of cryptocurrency

In the current digital technology era, it is no longer strange for people to talk about cryptocurrencies. Starting to appear in the 90s, but not until the 21st century was cryptocurrency known. came as a feverish phenomenon in the investment market. This is considered a “fever” of financial investors because of the many benefits and profitability that cryptocurrencies bring to them. So, in this article https://www.yieldnodes.top will talk about What is Cryptocurrency? The pros and cons of cryptocurrency: A guide for new investors

What is electronic money?

What is electronic money?
What is electronic money?

Firstly, electronic money is also known as cryptocurrency or virtual currency. It consists of digital bits, this currency is used only on the internet to pay for expenses, investments, .. and not through any physical transactions. While trading cryptocurrencies, traders must ensure that the Trading Instrument is connected to the internet, and that there is a common computer network with the issuer’s trading platform and electronic vehicle.

History of cryptocurrency

Around the 90s, cryptocurrencies were created by sporadic developers on par with the development of the technology that was gradually exploding. Thanks to the booming electronic technology, businesses and organizations have invented electronic money such as: Flooz, Beenz, Digicash,…

But these businesses and organizations only focus on and are dependent on the government. 3rd party transaction system. Therefore, this is the cause that led to the collapse of those businesses and organizations.

Since then, electricity money has been gradually developed and known. After spending decades, new cryptocurrencies formed and occupied a separate empire for themselves. In particular, when it comes to Bitcoin, everyone knows it when it was created in 2009 by Satoshi Nakatomo and is known as open source software.

Because Bitcoin has applied Blockchain technology, Bitcoin transactions will not be dependent on 3rd party intermediaries. Along with that, security is absolutely guaranteed. This is the reason why Bitcoin is growing stronger and more popular among traders.

Cryptocurrency classification

Cryptocurrencies are divided into three main categories. All have The pros and cons of cryptocurrency: A guide for new investors below:

Legal currency

Fiat money is electronic money that has been recognized by the government, now this is a very popular currency because it is stored in ATM cards, bank accounts, e-wallets, … So owners can easily exchange fiat currency into traditional banknotes.

Legal currency
Legal currency

Virtual Money

Virtual Money is a currency that is issued and managed by organizations and businesses. Even so, virtual currencies are not recognized by the government. They are used in different forms such as in-game coins, coins, tokens,…For the purpose of buying, selling, exchanging in-game items, trade coins or used to transact on e-commerce sites accept virtual currency.

Cryptocurrency

Cryptocurrency is a branch of virtual money, typically Bitcoin. The reason is that the cryptocurrency is based on Blockchain, so it will not be governed by the government. Bitcoin’s form of operation is anonymous, so it has high security and does not need a 3rd party intermediary.

Cryptocurrency
Cryptocurrency

The pros and cons of cryptocurrency: A guide for new investors
Cryptocurrencies, like other popular currencies, have their pros and cons, so in this article, I’ll share with you its pros and cons as follows:

The pros and cons of cryptocurrency: A guide for new investors

Advantages

First, e-money is a currency that is completely transacted by digital technology, so the transaction is quite convenient, easy and fast. Users can transact and transfer money anytime, anywhere.

For example, if you have some cryptocurrency in your wallet, you are free to trade for anyone you want. Typically when you invest in the Yieldnodes platform for example. You will not have to spend too much time on that and you also do not need to go to an agency or organization to be able to trade investments in a complicated way. complex.

The second thing about the advantage of cryptocurrencies is the low transaction costs. Most of the time when you trade or invest in cryptocurrencies, it costs you very little or can be free.

As an example of this, when you do an interbank transfer to someone in the amount of $500, the transaction fee will be charged to you at the rate of $2. If you transfer $500 with someone who owns an e-wallet with the same bank as you, the transaction is free.

The third thing, electronic money is always safe and secure: Customer information will be protected in the best way, and safest. With state-of-the-art technology, your cryptocurrency will be kept absolutely safe and fraud will be minimized. Especially not depending on the middleman.

For example, when you invest in a certain crypto-related platform, there are a few operations that require you to Enter OTP code or set up an account password to ensure the safety of your account.

The pros of Cryptocurrency
The pros of Cryptocurrency

The fourth thing is to develop the e-commerce industry: Currently, with the development of digital technology, the use of electronic money for online shopping is popular around the world. This contributes to the parallel development of electronic money and e-commerce.

For example: Ordering online is fast and convenient when paying with your e-wallet and the goods will be shipped directly to you quickly.

The fifth thing is that the cryptocurrency is not inflationary: The total of Bitcoin is only 21 million bits, due to the binding nature of the blockchain, Bitcoin cannot create more. So Bitcoin will not suffer from inflation and depreciation like cash when people can resist counterfeiting.

The sixth thing is to avoid risks: The risks mentioned here are physical problems when using real money: Losing money, burning money, tearing money, robbing, dropping or counterfeit money by mistake. when using,…

And the last thing to talk about here is the transparency of cryptocurrencies: By using Blockchain technology, all transaction information will be stored in the blockchain. Thus, the 2 trading parties can track every step and verify the cryptocurrency quite easily and quickly.

For example: When you invest Bitcoin in a cryptocurrency trading system, you and the trader will be able to track the transaction of that Bitcoin. And easy verification to avoid unnecessary risks. Bitcoin was born from the blockchain, from a decentralized network. That is, no one has control over it.

You participate in Bitcoin transactions, you will become part of that network and you have the right to handle work at the blockchain. It is for that reason, it gives more transparency, fairness to everyone, avoiding money falling into the hands of some people just like real money while people have control over the money.

Read more: Cryptocurrencies – effective source of profit for traders

Defect

In terms of disadvantages, cryptocurrencies have the following.

Difficult to predict: On exchanges, the range of price fluctuations of cryptocurrencies is always large. This will pose a risk to crypto holders as the cryptocurrency they hold could be subject to a huge drop in price.

The cons of Cryptocurrency
The cons of Cryptocurrency

The risk of the occurrence of crime: Due to the fact that cryptocurrency platforms operate in an anonymous state, cryptocurrencies are difficult to control. Criminals rely on this feature of cryptocurrencies to defraud or appropriate electronic money or carry out money laundering.

In addition, system risk is also a concern: Cryptocurrencies and especially cryptocurrencies will be at risk of being lost if hard drive failure, data loss, viruses, etc.. Holders will not be able to recover lost cryptocurrency.

Risk of losing key: Key is a sequence of passwords including letters and numbers used to access e-wallets. But if you lose the key, the risk of losing your wallet is very high. However, most e-wallets now have a backup mechanism. Therefore, users should make a backup of their private key before using an e-wallet to avoid risks.

Regarding the crypto legal question: The legal status of cryptocurrencies varies from country to country. In some countries, the use of cryptocurrency exchanges is encouraged by the government to use and trade.

But for a few other countries, cryptocurrencies are banned and outlawed. At present, cryptocurrencies are a matter of concern because they are exploited by criminal organizations. There is some information that the popularity of cryptocurrencies has been based on illegal transactions.

But in fact, when the black market website Silk Road went down, the price of Bitcoin immediately dropped. This confirms that Bitcoin is seen as a money-laundering tool or for illegal acts.

Cryptocurrencies are in the process of development: On the trading floors of cryptocurrency exchanges, it shows that its future is still uncertain. Currently, governments and banks cannot control cryptocurrencies in general and Bitcoin in particular.

However, as crypto becomes more developed, governments and banks will begin to take control and bring it into legal orbit. Then the cryptocurrency will lose its identity and will be like any other regular currency.

Above are some The pros and cons of cryptocurrency: A guide for new investors shared by investors before this article, summarized for new investors to refer to.

Read more: Scams: How to avoid getting scammed in crypto

Conclusion

In summary, through the article The pros and cons of cryptocurrency: A guide for new investors, we have shared all the advantages and disadvantages of cryptocurrencies for new investors to refer to. Aim to provide more information about cryptocurrencies to all those who have been and are aiming to invest in cryptocurrencies to help them understand more. In this article, I do not call for new investors, but only share my experience with cryptocurrencies. Looking forward to sharing with those who are in need of this type of digital asset investment. Thank you.

Read more: Things to be aware of when buying cryptos – a trend of high profits nowadays

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