Bitcoin is the first or oldest Cryptocurrency. About 14% of the US population uses Cryptocurrency. Estimated numbers exceeded 46 million. Thus, the scope of Bitcoin can be well understood.
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Bitcoin has some advantages that put it in an advantageous position against traditional fiat currency. However, along with the advantages, there are also some disadvantages that worry investors. Therefore, let’s try to discuss the pain points of investors with Bitcoin and why these coins are still high. So let’s start here.
Disadvantages of Bitcoin
You may have heard that Bitcoin is turning people from rags to riches. The growth of Bitcoin is like a fairy tale. However, we do not sell stories, we sell facts. In 2013, the price of bitcoin was only $196.02 (October). However, in 2021, prices reached $61,374.28. But like everything on earth, Bitcoin has its downsides.
Volatility is perhaps the biggest downside you have with Bitcoin. The price is so volatile that you can literally go from the pinnacle of economic success to the nadir of failure.
Of particular note is the massive drop in Bitcoin’s value of 50% compared to its original value. Many factors determine volatility. However, one of the main drivers of variability is scarcity. Satoshi Nakamoto, the developer of Bitcoin, set the limit for Bitcoins at only around 21 million.
2. No Government Regulation
Generally, the economic pedestal of a company is regulated by central banks supported by the Government. These institutions maintain repo rates and interest rates to keep things in balance.
On the other hand, Cryptocurrency is beyond the control of any central authority. Decentralization has its benefits, but it also poses a threat to investors. Lack of government regulation means lack of regulation and protection. If cryptocurrency crashes, the Government can’t come to your rescue.
3. Limited use
Want to trade Cryptocurrency? Yes, there are organizations that accept payments in Bitcoin. Millions of people use Bitcoin for payment.
But the number of Cryptocurrencies using companies is still small. Microsoft and Subway franchises are among the prominent companies using Cryptocurrency in their business. So acceptability becomes a big factor for Bitcoin.
Why Bitcoin is still valuable
Bitcoin has been observed to be in short supply and high demand. However, despite the drawbacks, one cannot disagree with the fact that Bitcoins hold promise.
According to a study, the market cap of Bitcoin is 308.68B. It still holds more than 30 percent of the cryptocurrency markets. You may well understand the value of cryptocurrency. Let’s try to understand why they are still worthy.
Businesses have always tried to hide their business information from any central authority. But the government has been extremely strict in regulating the common currency. This is the reason businesses want to switch to Bitcoins.
With Bitcoin, they can shield their business information from the hands of the government. This is because Blockchain supports Bitcoin. Here, the information is recorded anonymously. So no one will be able to track your business information.
2. Inflation Free
The rise of inflation has become a big problem for the world today. Inflation is an economic condition in which the demand for products in the market increases. Government cannot control the growth of things. They see that there is little money in the market.
During this time, they printed and marketed the denominations. But the number of bitcoins is limited. Moreover, it is free from inflation and therefore investors and businesses can easily transact worldwide.
Bitcoin has many advantages that you can use to achieve business success. Although other Cryptocurrencies like Ether and Dogecoin are coming.
However, they lag far behind Bitcoin. So, you can make the best use of Bitcoin to increase your business opportunities. But at the same time, you need to be aware of the disadvantages.
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