Cryptocurrency is like no other digital currency, all others are tied to fiat currency or Government control. Bitcoin and other Cryptocurrency payments nowadays are without the involvement of a third-party, lower risk payment, little to no fraud cases, and most of all, universal in their usage.
However, considering the connected nature of Cryptocurrency, some flaws are included with it. There are 4 major setbacks concerning Cryptocurrency.
The first one is that the lack of understanding of Cryptocurrency. In most cases, people are still unaware of the digital currency world and also the potential it holds.
This is like when the usage of Mastercard when it was first announced and therefore the reception towards it was very like Cryptocurrency.
Back then, people wouldn’t even think that paying for things employing a mere card is feasible, what’s more employing a whole new digital currency.
Because it’s different, and it doesn’t involve cash directly, people recede from it and constantly doubting its effectiveness. Additionally, it involves online access to form it works.
The idea of getting to pay for things or transfer money online is convenient to some but most are still skeptical about it.
To form Cryptocurrency acceptable around us, people have to be educated about it to be ready to include it in their daily lives.
One way to try and do it’s through networking. But the fact is, there aren’t many places online where people can study it.
The effort to find out a full new world of currency is required lots of your time and energy. Most would think it’s not worth their time because it’s not commonly known anyway.
Even though some businesses are accepting bitcoins, the list is significantly small compared to traditional currencies. This is probably thanks to the shortage of knowledgeable staff that understands the ways of digital currencies. Plus, they have to assist educate their customer about it and the way to use it for a smooth transaction.
This, again, will take an extended time and energy to show others.
Another drawback of Cryptocurrency would be its lack of protection and guarantee. In the case of traditional currency, there’s a financial institution that governs the authority on every nation’s money.
No higher authority can suddenly decide that they do not want to use their country’s currency to trade without protest and rejection. There are proceedings to follow, documents to file, approvals, and lots of other protocols to follow.
However, that’s not the case with our digital currency. there’s no financial institution that governs Bitcoin, which implies nobody can guarantee its minimum valuation.
The value of Bitcoin as an example will fall tremendously should a serious group of merchants decided to only ‘discard’ Bitcoins and leave the system. this may inevitably put other users who have invested thousands of dollars into Bitcoins into a serious loss.
There’s nobody to contact to file these losses, or rules to assist compensate it. Thus, the decentralized system of Bitcoin is what we call a double-edged sword on its own.
The next disadvantage is its technical shortcomings. When online banking made its way into our everyday life, there’s always a risk of a sudden server failure, power shortage, and even hardware lags.
If it happens and you ended up getting charge but didn’t receive the movie tickets or flight tickets, you’ll be able to always call the bank service provider, or visit the physical bank instead and declares your case.
In most cases, if you show evidence of your payment you may get proper compensations or feedbacks. That is not how it works with Cryptocurrency.
First of all, this currency doesn’t have a bank to barter and call centre to call. There’s no fixed number that you simply could call and evoke clarification.
So, if to procure your goods using Bitcoins as an example, and also the merchant didn’t send the things you bought, there’s nothing you’ll be able to do to reverse the transaction or refund. You can’t complain to the police or any relating authority for that matter.
Similar to data corruptions or virus infections, if your storage drive crashes and your wallet file is corrupted your Bitcoin is lost forever. There’s nothing you’ll you are doing restore it and people ‘coins’ are ‘orphaned’ within the system.
To ensure this doesn’t happen to you, store your Public and Private Keys somewhere safe so you can recover from a data loss.
The last major disadvantage of Cryptocurrency would be because it’s still developing.
When things are still developing, it’s susceptible to many risks. Numerous incomplete features will be improved but it takes a longer time to finalize it, especially if it’s no physical form.
With traditional currency, despite the strategy of payments nowadays are done online, and without us seeing the physical money transferring from one account to a different, within the end of the day, once you reach the ATM, you’re capable of holding that cash.
You can use it to shop for stuff from the stores physically, and online. That shows how developed our traditional currency is.
Since Cryptocurrency doesn’t have any physical forms, its usage is restricted.
It should be converted to traditional currency to enjoy its worth. in line with studies, there was a time when there’s a proposition to store Bitcoin wallet information in cards. However, there’s neither consensus nor continuation of the proposal.
The most probable reason would be because merchants find it unfeasible to support all the cryptocurrency cards. there’s no system for direct payment using the cards, thus users are forced to convert it into real money anyway.
As you’ll be able to see, there are 4 disadvantages of Cryptocurrencies. understanding is absent towards this digital currency. Plus, there’s minimum protection and guarantee when using it. Because it’s mostly operating online, it’s absolute to experience every kind of technical flaws and it’s still developing.
The world of cryptocurrency is comparatively unaccustomed to some people and it is often difficult to know. Because nobody knows what currencies will or are often adopted and at what scale.
So, in the next article, we will talk about what the future holds for Cryptocurrency.