Today, when the popularity of cryptocurrencies is growing rapidly more and more people begin to look closely at them and a lot of questions arise. One of the main ones is why invest in cryptocurrency. We have prepared for you a list of major pros and cons regarding cryptocurrency investments.
Advantages of cryptocurrency investment
- Passive income. It is difficult to find a person who would not love a “freebie”. For this reason, mining has gained such popularity – people want to increase their capital in a short time. To become a miner it is enough to buy the necessary equipment, to assemble the farm and install the software. That’s all! It remains only to click on the start button to launch the process of mining the selected cryptocurrency.
- Reliability. Cryptocurrencies are reliably protected and cannot be faked.
- Decentralization. Thanks to this feature, no one can control and regulate the currency issuance and the flow of funds on the account. Decentralization makes cryptocurrency independent.
- Anonymity. You can’t track information about a person, you can only see the wallet number and its transactions (cryptocurrencies transfers).
Disadvantages of cryptocurrency investment
- You can lose coins if you lose access to your wallet. When creating a wallet a special password is generated which is almost impossible to crack. It means that a computer breakdown or loss of password will lead to the loss of coins as well! Therefore, be sure to save the wallet data on a separate medium.
- Great volatility – cryptocurrency price prediction is almost impossible. And demand today is influenced by many factors including legislation that has not yet been formed in many countries regarding cryptocurrencies. Due to the relatively low capitalization of cryptocurrencies, large players can strongly influence the market. Such players can easily manipulate the market to their advantage.
- Prohibition risk – in many countries there are restrictions on the use of cryptocurrencies. In some cases, the ban applies and many have not yet decided exactly how to relate to this phenomenon, but it is clear that cryptocurrencies are confidently conquering the whole world.
- Lack of guarantees – cryptocurrencies are arranged in such a way that the owner himself bears all responsibility for them. If in some way intruders take cryptocurrencies away from you, then you cannot prove anything to anyone. Even if you keep your coins and tokens in a crypto wallet it won’t be possible to solve a problem in case the wallet was hacked and cryptocurrencies is gone.
Investing in cryptocurrencies can be simple, interesting and extremely financially profitable if you take it seriously. Likewise, cryptocurrency trading can have a devastating effect on your finances if the approach was wrong. Despite some risks, many advanced users are interested in cryptocurrency investments. This is a great chance to earn good money, use it wisely!
This is not investment advice, all investment/financial opinions are from the personal research and experience of the owner of the website and are intended as educational material. Every investment and trading move involves risk.
You should conduct your own research when making a decision.
Feel free to follow our updates and news on Twitter, Facebook, Reddit, Telegram and BitcoinTalk.
Read what the customers say about SimpleSwap on Trustpilot.
Don’t hesitate to contact us with any questions you may have via [email protected]