Cryptocurrency Pros and Cons 2020
This article will explore cryptocurrency pros and cons in 2020. Recently, the popular digital currency technology, which can also serve as a decentralized application platform, has exponentially grown in usage and popularity.
Along with that popularity has come more intense scrutiny. But why? Some say it is due strictly to media hype. That cryptocurrencies like Bitcoin are merely over-marketed Ponzi schemes, having little to no value.
“Some say it is due strictly to media hype. That...Bitcoin are merely over-marketed Ponzi schemes, having little to no value.”
When in fact, the value of Cryptocurrency is now well into the billions, with multi-trillion-dollar market valuations predicted within the next decade.
A Paradigm Shift
Many believe cryptocurrency will be the catalyst for a whole new financial and governmental paradigm shift. One that will change our relationship with money and traditional assets forever.
It is this idea that has your government and banks around the world wanting cryptocurrency regulation. Unlike fiat currency, a truly decentralized digital currency like Bitcoin cannot be controlled by any single entity or institution.
Political Pros and Cons
The thought that a government might lose control over something as crucial its money supply is a terrifying thought for many politicians. An often a cause why they clamor for cryptocurrency regulation.
“The thought that a government might lose control over something as crucial its money supply is a terrifying thought for many politicians.”
As cryptocurrencies like Bitcoin are peer-to-peer networks, a good amount of control over that currency is placed into the hands of the citizenry. A direct challenge to a government’s power.
Economic Pros and Cons
Governments and banks can dictate the production and movement of their national currencies. This ultimately leads to inflation.
Many cryptocurrencies, such as Bitcoin, are limited in the amount of them that can be produced. Everything has been hard-coded into the network.
“In the case of a Bitcoin, only 21 million will ever be produced. Unlike central banks, you can't just print Bitcoin whenever you like.”
In the case of a Bitcoin, only 21 million will ever be produced. Unlike central banks, you can't just print Bitcoin whenever you like.
This is what makes Bitcoin deflationary. If one follows the law of supply and demand, they should only increase in value.
Does Cryptocurrency Curb Criminal Activity?
When considering cryptocurrency pros and cons, a valid concern for many governments is the risk of people using the anonumous features of crypto to facillitate criminal activity.
For example, if people are using the anonymity features of a certain cryptocurrency to deal drugs, launder money, traffic children, or fund terrorism.
“a valid concern for many governments is the risk of people using the anonymous features of crypto to facilitate criminal activity.”
There is a valid concern for governments that want to stop or limit these illicit activities. However, contrary to popular belief, many cryptocurrencies are not anonymous.
In fact, experts can trace who owns which wallets and the amount of cryptocurrency each wallet contains. Ultimately, this may may even be able to help authorities to track down criminals.
In reality, the greatest facilitator of illegal transactions is cash. Far eclipsing cryptocurrency in its use for anonymously facilitating questionable activities.
Your bank wants cryptocurrency regualtion because If you own cryptocurrency, you can send any amount to anyone in the world in a matter of minutes.
“You in effect, you become your own bank, negating the need for banks and money transfer services and avoiding costly fees.”
You in effect, you become your own bank, negating the need for banks and money transfer services and avoiding costly fees.
Cross border payments which used to take days, even weeks, and cost hundreds to thousands of dollars, happen instantly and with almost negligible fees.
No Limitations or Restrictions
Most banks aren’t open for business twenty-four hours a day. Cryptocurrency allows you to transact with anyone, any time of the day.
Regardless of where you and the other person may be located. Any time of time of day or location, your funds will arrive in minutes.
By law, if you withdraw over a certain amount, your bank requires you to fill out forms detailing the purposes of those funds.
“if you withdraw over a certain amount, your bank requires you to fill out forms detailing the purposes of those funds.”
In the case of withdrawal of large amounts, the bank may not even have the cash on hand. You will have to wait for access to your money.
Not so with cryptocurrencies. Any amount can be sent, withdrawn, or moved without a bank’s involvement. Liquidity is almost instant.
Developing Economies Served
For many in developing countries, opening bank accounts is simply not a financial reality. Even holding title to property is impossible though their ancestors may have lived on that property for hundreds of years.
In the case of Africa, either the financial infrastructure does not exist, or it is exclusionary to the point of preventing the majority of the population from accessing financial services.
Opportunistic money transfer firms and or money changers exploit common people who want to send or access money.
“For many in developing countries, opening bank accounts is simply not a financial reality.”
Accessing credit proves impossible for those who lack basic identification documents and access to property ownership documents. How else would they provide collateral or guarantees?
Cryptocurrency and its related technologies could change these circumstances.
The Future Looks Bright
Hopefully you have learned more about why some governments and most banks want cryptocurrency regulation. Their fears center around the autonomy cryptocurrency affords it users.
Legacy financial institutions stand to be disrupted from their traditional and comfortable places of power. Governments must face the possibility of the losing control of their national currencies.
In the years to come it will be interesting to watch how these developments unfold. The stakes are high.
It is the people who stand to gain the most. The question is: Will governments and their enmeshed financial systems allow it to happen?
And remember, CryptoVerrified.com is always here to help you survive and thrive in this new and exciting space! We have an awesome FREE Crypto Guide and toms of resources at our crypto blog.
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