Advantages and Disadvantages of Cryptocurrencies

Question 4: Advantages and Disadvantages of Cryptocurrencies
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Question 4: Advantages and Disadvantages of Cryptocurrencies
Cryptocurrency is a digital currency that uses online ledgers to store and execute transactions. The technology is usually decentralized by the use of high-end technology referred to as the blockchain. Cryptocurrencies such as Bitcoin, Ethereum, and Litecoin, among others, are not issued by the central government. The objective of this paper is to explore the advantages and disadvantages of cryptocurrencies.
Advantages
User Autonomy: Autonomy can be described as the ability to act without any external influence. For example, if a person makes a decision, it is not influenced but within their desires. Most fiat currencies used globally are subject to manipulation and are influenced by varied external factors. For instance, the 2007 and 2008 economic crashes caused economic outbursts that left most countries with debts. In this case, the people (users) do not have control of the money because everything is controlled by a central authority (Steblianko & Riepin, 2021). Contrarily, bitcoin cannot be controlled by authority or government since it is digital hence providing autonomy to the users. Therefore, users have control over bitcoin transactions as compared to fiat currencies.
No Banking Fees: Typically, every financial institution globally will provide its services at a fee, whether a person or an organization is making some borrowings or making savings. At every point an individual or company transacts with a financial institution, they will always be charged a certain fee (Bunjaku et al., 2017). However, cryptocurrencies provide a unique platform that does not rely on traditional methods of transaction provided by banks (Steblianko & Riepin, 2021). In this case, for every transaction made in cryptocurrency, the user does not incur any fees. Therefore, all transactions are digitally stored, which scraps off account maintenance fees and other related fees charged by financial institutions.
Confidentiality and Security: There is no confidentiality in traditional forms of banking since everything is recorded and stored in physical ledgers. In this case, the users do not have privacy on their transactions, which might negatively impact their businesses. Cryptocurrencies provide a unique pathway for every transaction made. Unlike in banks, the users have total discretion, and they can choose the kind of information to share with investors. Additionally, cryptocurrencies are secure compared to other forms of payments. Firstly, every transaction is locked in blockchains, which means it does not leave room for hacking. Due to advancements in technology, most payment methods are prone to hacking today. Safety is the primary reason why most people will prefer to transact with crypto...