Bitcoin is the first or the oldest Cryptocurrency. Around 14% of the US population uses some form of Cryptocurrency. The estimated figures cross 46 million. Therefore the reach of Bitcoin can well be understood.
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Bitcoin has some benefits that hold it in an advantageous position against the traditional fiat currency. But alongside the benefits, there are also some drawbacks that hurl trouble to the investors. Therefore, let’s try to discuss the pain points of the investors with Bitcoin as well as the reason these coins are still on a high. So let’s begin here.
Drawbacks Of The Bitcoin
You might have heard that Bitcoin has transformed people from rags to riches. The growth of Bitcoin is like a fairytale. However, we don’t sell fairy tales but facts. The price of Bitcoin back in the year 2013 was a mere 196.02 USD (October). However, the prices in the year 2021 reached around 61374.28 USD. But, like all things on earth, Bitcoin has its own disadvantages.
1. Kintamumas
Volatility is perhaps the greatest negative point that you have with Bitcoin. The price is so volatile that you can literally transform from the summit of economic success to the nadir of failure.
Special mention needs to be made of the great fall where the Bitcoin value tumbled to 50% compared to the original value. Many factors define volatility. However, one of the prime factors of volatility is scarcity. The developer of Bitcoin, Satoshi Nakamoto, set the limit to Bitcoins to only around 21 million.
2. No Government Regulation
Generally speaking, the economic pedestal of a company is regulated by the Government-backed central banks. These organizations maintain repo rates and interest rates to keep things under balance.
On the other hand, Cryptocurrency is beyond the control of any central authority. There are benefits of decentralization, but this point is also a threat to investors. Lack of government regulation denotes a lack of regulation and safeguarding. If the Cryptocurrency crashes, the Government can not come to your rescue.
3. Limited Use
Do you want to trade on Cryptocurrency? Yes, there are organizations that accept payment on Bitcoin. Millions of people are using Bitcoin for payment.
But the number of Cryptocurrencies using companies is still small. Microsoft and Subway franchises are among the notable companies that use Cryptocurrency in their business. Therefore acceptability becomes a big factor for Bitcoin.
Why Bitcoin Is Still Worth It
It has been observed that Bitcoin is less in number and is in high demand. However, notwithstanding the drawbacks, one can not disagree with the fact that Bitcoins have promise.
According to a study, the market cap of Bitcoin is 308.68B. It still holds more than 30 percent of the Cryptocurrency markets. You could well understand the worth of Cryptocurrency. Let’s try to understand why they are still worthy.
1. Anonimiškumas
Businesses have always tried to hide their business data from any central authority. But the Government has been extremely strict in regulating the general currency. This is the reason businesses want to shift to Bitcoins.
With Bitcoin, they can veneer their business information from the hands of the Government. This is because Blockchain backs Bitcoin. Here the information is recorded with anonymity. So nobody will be able to track the business information.
2. Inflation Free
Rising inflation has been a great problem for the world at this point in time. Inflation is an economic condition where the demand for products rises in the market. The Government can not control the increase in things. They see that money is scarce in the market.
During that time, they printed denominations and pumped them into the market. But the number of Bitcoins is limited. Moreover, it is inflation-free, and therefore investors and businesses can easily conduct transactions worldwide.
Kas dar?
Bitcoin has a great number of advantages that you can leverage to gain business success. Though other Cryptocurrencies like Ether and Dogecoin are coming up.
Yet they are lagging far behind compared to Bitcoin. Therefore you can make the best use of Bitcoin to increase your business opportunities. But at the same time, you need to be aware of the drawbacks.
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Source: https://www.thecoinrepublic.com/2022/12/02/3-drawbacks-of-bitcoin-and-why-its-still-worth-it/