@Xavier 21 August 2020 more from that month

Potential Advanatges and Disadvantages of Cryptocurrency

**Potential Advantages of Cryptocurrency** Advantages realized by those who use cryptocurrencies vary in character and magnitude depending on their unique circumstances. Benefits may change over time as their situation evolves. Citizens and institutes may use cryptocurrencies for five core purposes: store wealth, earn investment gains (or losses), transfer wealth, purchase goods/services and to pay debt. According to Totka (2018), there are six advantages to holding cryptocurrency for a business. Table 6 overleaf outlines these advantages that businesses may realize in certain contexts. These six benefits may apply to individuals who use cryptocurrencies. “you can acquire new customers” may apply to freelance consultants and sole traders. Storing wealth in cryptocurrencies may allow some portfolio investors to offset risk from negative fluctuations in physical assets values such as gold, stock and property. Cryptocurrencies generally offer few advantages for the transfer of private wealth and gifts. Numerous currency alternatives exist that offer more stable purchasing power. Examples include store gift vouchers, international money transfers (e.g. Western Union), cash, checks and SWIFT bank-to-bank transfers. **Potential disavantages of Cryptocurrency** These are the potential disadvantages that businesses and individuals may experience when they transact or store wealth using certain cryptocurrencies in various contexts. 1. Mandatory trading using cryptocurrencies may reduce privacy. In contrast to simple, minor cash transactions, a permanent digital record is maintained for all ‘innocuous’ cryptocurrency purchases such as milk and pet food. 2. The protection of cryptocurrency balances is not guaranteed by a well-resourced statutory authority. In the United States of America, personal bank deposits are guaranteed at USD 250,000 per depositor by the Federal Deposit Insurance Corporation. 3. The intrinsic value of cryptocurrencies is zero. If a cryptocurrency provider is bankrupted and refunds your cryptocurrency balance, they are handing you nothing more than worthless dead binary code. Precious metals such as silver have intrinsic value. They can used for constructive purposes such as the manufacture of jewelry, cutlery and weapons. 4. In contrast to national currency and brick-and-mortar banks, virtually all cryptocurrencies do not offer comprehensive face-to-face customer support branches where aggrieved customers can visit a client support officer and reason with a human in person. 5. Critics of cryptocurrencies use the idiom “it can disappear with the flick of a switch” to put forward the valid argument that a person’s cryptocurrencies can be erased instantly and permanently by human error or due to malicious intent, such as a systemic institutional scam. Cryptocurrencies are a relatively new and untested commodity. Modern history shows humanity that established, regulated financial institutions have rarely stolen or lost balances of massive amounts of customers with the ‘flick of a switch’. 6. Because cryptocurrencies are based in offshore jurisdictions and trade globally, it is difficult to trace ownership and composition of their Executive Boards. Many cryptocurrencies are unsophisticated startups that disclose few corporate details compared to established financial institutions (e.g. see Ethereum, 2018). 7. The purchasing power of most cryptocurrencies fluctuates wildly on an annual basis (+/- 20%). Annual inflation rates in advanced economies is relatively stable and low (+/- 5%).