With some 2000 cryptocurrencies to choose from, 2018 starts up frantic. The unmet volatility levels of these digital currencies and the high returns usher in a new era in the transaction system. Is this reshaping the transactional system to suit the Internet age? Or is it just another speculative bubble that will burst? Things, as it may seem, have pros and cons regarding cryptocurrencies, as follows:
Top 3 general pros
- Direct transfers for instant settlements – Through disintermediation cryptocurrencies contracts can be completed now or in the future for just a fraction of the expense and time of the traditional asset transfer.
- High-return investments –Thousand percentages yield ignite the interest of investors.
- Transparency – The open recorded ledger based on blockchain technology makes all exchanges observed by anybody whenever.
Top 3 general cons
- Excessive volatility – Short time violent price movements limiting cryptocurrencies as a strong vehicle for businesses.
- Financing illegal activities – Potential use for money laundering and illicit activities given the transaction cannot be traced.
- Artificial inflation of prices –Trading bots can artificially cause the price dip and surge rapidly thus manipulating the market.
As any instrument, blockchain technology can be used for good or bad. The first ones to take avail of this new technology were cryptocurrencies. As one cryptocurrency founder warned in an interview, virtual coins are “clock bombs”. We see over-monetization as companies issue a virtual coin when the same tasks can be met by existing blockchains. People are blinded by money obtained quickly and cheaply.