Advantages and disadvantages of using cryptocurrency
Cryptocurrency is a digital version of money that takes the form of virtual tokens or coins. You can use it to buy or sell items from people or companies that accept such payments.
There are a range of cryptocurrencies available including, Bitcoin, Ethereum, Litecoin and Cardano, each with individual values and rules. Bitcoin is currently the most widely used.
To make a Bitcoin payment, Bitcoins are transferred from a digital wallet, which are obtained when you buy the currency from a crypto exchange, to someone else’s using an app or website and the person’s unique Bitcoin address.
Advantages of using cryptocurrency
Using cryptocurrency could offer opportunities for some businesses. The benefits may include:
- A cryptocurrency transaction is generally a quick and straightforward process. For example, Bitcoins can be transferred from one digital wallet to another, using only a smartphone or computer.
- Every cryptocurrency transaction is recorded in a public list called the blockchain, which is the technology that enables its existence. This makes it possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies or undoing transactions.
- Blockchain aims to cut out intermediaries, such as banks and online marketplaces, which means there are no payment processing fees.
- Cyptocurrency payments are becoming more widely used, amongst large organisations, and in sectors including fashion and pharmaceuticals.