Bitcoin is a keyword that has attracted a lot of public interest because it is a new form of currency that brings high value to investors, however, you may have heard about hacker attacks, terrorism, and crime related to it. So, to answer the questions: what is Bitcoin? What are its advantages and disadvantages? Should you invest in Bitcoin (BTC) in 2020? Let’s follow the article below to find the answers.
What is Bitcoin?
Bitcoin (symbol BTC or XBT) is a type of digital currency, created by Satoshi Nakamoto and launched in 2009. Bitcoin can be exchanged on devices connected to the Internet without the need for any financial organization as an intermediary.
Bitcoin operates completely differently from traditional currencies in that it is not controlled by any bank and functions as a peer-to-peer protocol over the Internet. This virtual currency is generated from algorithms so it can be supplied automatically, has a limited volume, and is based on an available schedule. Bitcoin is sent to computers, which process and verify payments on the Bitcoin system, storing transactions in the “ledger” called Blockchain.
Evaluating the pros and cons of Bitcoin (BTC)
Bitcoin is the first, most prominent, and most popular cryptocurrency among digital currencies. In 2017, Bitcoin nearly reached $20,000, a record that no other cryptocurrency had achieved before. However, this currency has attracted the attention of terrorist criminals. To better understand the strengths and weaknesses of Bitcoin, we conducted the following analysis:
Advantages
- Convenient and quick transactions: you can trade Bitcoin anytime, anywhere with any amount you want with just a few simple steps. This is an advantage over banks, where transaction procedures are somewhat cumbersome and cause inconvenience for users. This convenience is possible because Bitcoin is not under the control of financial organizations like traditional currencies.
- Impossible to counterfeit: Bitcoin shares the advantage of all cryptocurrencies that it cannot be forged because it does not exist in physical form that can be held or seen. Therefore, you can trust it entirely without worrying about counterfeit or adulteration, unlike traditional money or gold.
- Safety and security: You can transact without revealing personal information, thus protecting your identity. In addition, once data is entered into the Blockchain ledger, it cannot be changed, meaning your Bitcoin transaction information is protected absolutely.
- Potential for e-commerce development: Currently, many companies, businesses, and stores use BTC for payments because BTC transactions are one-way and irreversible thanks to Blockchain technology.
Disadvantages
- Volatile prices: Despite some factors that have reduced Bitcoin’s value, overall, its price increases and even surpasses gold and USD because Bitcoin supplies a limited amount (about 21 million BTC) while demand continues to grow. The volatility of Bitcoin can cause sleepless nights, sudden fortunes, or total losses.
- Attracts hackers: Bitcoin is appealing like a gold mine, and the lack of regulation makes it an attractive target for hackers.
- Recognition and legality: Bitcoin is mostly used in developed trading countries like the US, UK… but in some developing countries like Vietnam, BTC remains unfamiliar or is banned in some other nations. Clearly, traditional currencies still have the advantage.
Should You Invest in Bitcoin (BTC) in 2020?
Past incidents involving scams have led many to oppose this currency type, but in fact, the issues stem from the users themselves using Bitcoin to scam each other. Moreover, the Vietnamese government does not ban the circulation of BTC but also has no regulations on its use or penalties for scams. Therefore, to effectively utilize Bitcoin’s benefits and avoid unwanted risks, be a wise and prudent investor by thoroughly researching information before participating, understanding its operational rules, and ensuring your investment work yields effective results.
Conclusion
The above article has presented the typical advantages and disadvantages of Bitcoin. We hope it has helped you find the right direction to consider whether to invest in BTC. Wishing you success with your choices.
Learn more:
What is Bitcoin Gold?
What is Tether (USDT)?
