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Advantages of Bitcoin | Disadvantages of Bitcoin

This page covers advantages and disadvantages of Bitcoin. It mentions Bitcoin advantages or benefits and Bitcoin disadvantages or drawbacks. It describes bitcoin basics including how bitcoin works.

What is Bitcoin?

Introduction:
The Bitcoin is a cryptocurrency or digital curency. In this concept transactions are made without any central authority or banks. This means there are no fees for the transactions and no real name is used during the transactions. The value of 1 Bitcoin equals 16120.00 US Dollar as of Dec 11, 2017. The Bitcoin system has been invented in the year 2009 by satoshi Nakamoto.

Bitcoin system

How Bitcoin works?

• As Bitcoin is a peer to peer system which does not need central authority, creation of money and transactions are managed collectively by the network.
• Bitcoins are stored in a digital wallet which means they exist either in the cloud or in the user's computer. Here wallet is a kind of virtual bank account which allows users to send or receive bitcoins, pay for goods or save their money.
• Users can buy or sell bitcoins using different currencies at "bitcoin exchanges" or "company" who deals with bitcoins.

Benefits or advantages of Bitcoin

Following are the benefits or advantages of Bitcoin:
➨No third party can control or prevent transactions between sender and receiver.
➨Transactions fees to buy and sell bitcoins are much lower.
➨There is no limit on amount of bitcoins transfer per day for sending and receiving.
➨Bitcoin is free software.
➨There is no inflation risk involved as coin's creation is limited.
➨The market cap of this cryptocurrency is bigger compare to currencies of Qatar, Kuwait and Hungary.
➨Bitcoins can be used to buy merchandise anonymously. Moreover there are many merchants who accepts it.
➨International payments are easy and cheap through bitcoin transactions as they are not tied to any country or subject to regulation.

Drawbacks or disadvantages of Bitcoin

Following are the drawbacks or disadvantages of Bitcoin:
➨Bitcoins are not widely accepted everywhere.
➨It is not in physical form like normal currency notes/coins.
➨Transactions are irreversible.
➨Bitcoin valuation fluctuates.
➨It is built in deflation as maximum number of bitcoins are fixed to 21 million.
➨It is difficult to associate bitcoin addresses with real life identities. This encourages illegal traffic.
➨It is prone to hacking and malware attacks. Since it is prone to losses due to hacking, loss of password, compromise of access credentials, malware attack etc.
➨The Bitcoin technology requires users to be skilled in internet related softwares/applications in order to avoid any mistakes while using it.
➨There is no established framework to address customer problems/disputes/charge backs etc.

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