With capitalization for the cryptocurrency market constantly flourishing, more and more people have started investing money in Bitcoin. According to the latest statistics, bitcoin’s market cap has represented a lion’s share when compared to all other cryptocurrencies. Currently, the bitcoin price in India is trading around Rs.7 lakh and this is one reason that people are investing heavily in this bandwagon, with expectations that the prices will surge overnight. But, if this is your first time and you haven’t done a proper homework before investing your hard earned money, then you must accustom yourself with the pros and cons of it. Let’s have a quick look.
Bitcoin is the world’s first decentralized digital currency, launched in 2009, which works more or less like a digital wallet. It either exists in a cloud or on a user’s computer, allowing people to send or receive bitcoins, pay for merchandise or even save money. But, these options are not insured, unlike other bank accounts. We have listed out some features that will help you decide on investing your money in Bitcoin.
- Bitcoin uses military grade cryptography for securing transactions. In this, the payment processing is conducted via a private network, which means every transaction is saved in a public record, known as “blockchain”.
- Bitcoin is free from government affiliations, banks, and even central authorities. It works on peer-to-peer technology.
- It protects your money and your identity, so you need not disclose your personal information for any transaction or provide your credit card details. Every time you do a transaction, you can use anonymous Bitcoin addresses.
- Sending and receiving payments can be done at very low cost with Bitcoin. And if you are a frequent traveler, you can get benefitted by not paying any foreign transaction or exchange fee, on your international payments.
- If you use a reputed provider for processing transactions, you can save a lot of money. For instance, if you request a withdrawal of Rs. 5000, you might need to pay a transaction fee of Rs. 10 only. So, your account will get credited with Rs. 4990 and this is like saving significantly as compared to credit cards.
- If you are a businessman, you need not worry about consumer charge-backs, hackers going after credit card details during transactions or pricey POS systems. Most of the exchanges instantly convert Bitcoin payments to reduce the risk of volatility. So, all you need to worry about is cryptocurrency exchange in India.
- Bitcoin is volatile and a number of market factors influence its market cap. Because it works on supply-and-demand strategy, the Bitcoin value increases if more and more people are willing to buy it, or else the prices dip. This feature makes it an extremely risky investment.
- Transactions are irreversible in Bitcoins, which is a major drawback. So, if in case you have accidentally made a transaction to a wrong address or a vague vendor, you will have to eat the loss, as you don’t get any liability protection in Bitcoin. There is no concerned governing authority involved, so there is no way to recover the money back.
- Storing money in Bitcoins is risky, either in the cloud or on the personal computer. If you have saved your money over the years and the online wallet gets hacked or your local computer’s hard disk fails, your bitcoins will be lost forever.
- Not all payment systems accept Bitcoins. So, if you are planning to invest your money in it, then you must check, where all Bitcoins are accepted as the payment system. If you are using Bitcoins to save money or just as an investment, then you can exchange them for fiat money by checking Bitcoin price in India.
- Although it allows people to use anonymous Bitcoin addresses for every transaction, the public address is visible to everyone, as an identifier. These days, all the transactions that you can make and your account balance is made visible on the websites, so as to protect the integrity of the Bitcoin network.
Bitcoin comes with its own benefits and drawbacks and no one knows, there might be potential applications that may find a way in the future. Scratching the surface a little more can help you take a wiser decision on investing your hard earned money in Bitcoins. So, take your time and invest cautiously.