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understand about what cryptocurrencies are advantages and disadvantages

 


image understand about what cryptocurrencies are advantages and disadvantages

Cryptocurrency is defined as digital currency that can be used for buying or selling transactions between users without the need to go through a third party. If transactions are generally carried out by banks in the third person, in cryptocurrencies there is no one acting as an intermediary.

Cryptocurrency transactions originate from computer networks that use certain calculation algorithms. This mathematical concept is called cryptography which uses blockchain technology. Bitcoin is the first type of cryptocurrency in the world

Cryptocurrency base 

Explanation cryptocurrency in each of the following characteristics:

Digital: Cryptocurrency is digital or virtual currency, it does not really have a tangible form like coins or paper money.

Peer-to-peer: Cryptocurrency from sender to receiver online without a third party

Global: Cryptocurrencies are global i.e. valid in all countries as long as the country recognizes cryptocurrency.

Encrypted: Unlike bank accounts using real names, not with cryptocurrency accounts. The user is hidden but everyone can see all the transactions happening on the blockchain. Apart from that, there are no restrictions or rules for what transactions are used

Decentralized: Banks do not act as central stores of money. Cryptocurrencies are not managed by a central server, that's why they are called decentralized.

However, all transactions are recorded in the blockchain. The listing is done by cryptocurrency miners. Miners are people who run servers and play a role in verifying transactions. The trick is to solve complex cryptographic puzzles to validate transactions. If successful, the miner will get a commission in the form of digital money that can be used.

Mining this digital money requires a series of software and solving computer algorithms. The device used must be a computer with special and sophisticated specifications, as well as large data storage.

Blockchain is like a ledger that contains data for every transaction. Anyone can access this platform even if they don't make virtual transactions.

Truthless: Users can send money to each other online without having to entrust money or information to a third party (in this case the bank).

advantages and disadvantages of cryptocurrencies - Cryptocurrency Advantages and DisadvantagesAfter listening to the explanation above, you can unlock the advantages and disadvantages of cryptocurrencies:

Superiority

  • Everyone can own and transact with cryptocurrencies anywhere and anytime. No bank holidays, no national borders, and no employees.
  • More resistant to inflation. For example, there are only no more than 21 million bitcoins. limited availability in order to increase its value. Unlike bank money which is constantly being printed, bitcoin is limited to making it more resistant to inflation.
  • Transparent, fast and practical.
  • Protected against identity theft.

Weakness

  • Because they do not use real identities, they are vulnerable to being used in illegal activities such as money laundering.
  • High volatility, ie the value of a currency can suddenly rise or fall drastically and in a short time.
  • Unpredictable currency values.
  • Not valid for buying and selling services in Indonesia.