Whether you’re a consumer or a business owner, it’s important to keep an eye out for cryptocurrency trends. There are a few changes expected to happen in the next years and, therefore, you need to understand how cryptocurrencies work. Let’s start with the most popular: bitcoins.

What Are Bitcoins?

Bitcoins are the first cryptocurrency ever created. We don’t want to overwhelm you with computer engineering terms, so to put it simply: Bitcoins are just digital money generated by high-performance computers.

Unlike dollars and euros, there is nothing for you to hold in your hands. It’s just computer code with monetary value. However, you can exchange bitcoins for cash. On May 1st, 2018, bitcoin started the day worth $9,244.32.    

While some find it too risky to invest in digital money, bitcoin’s complex algorithms are designed to prevent fraud and hacking attacks. Satoshi Nakamoto, which is a pseudonym, first introduced bitcoins in 2009. Actually, nobody ever found out Satoshi’s true identity, although there are many theories about it.

Pros And Cons Of Bitcoins

Now that you know a little bit more about bitcoins, you’re probably wondering if it’s something you would use. To help you make a decision, here’s a list of some of the advantages and disadvantages of using bitcoins:

Advantages:

  • Bitcoins can be stored offline on your own hardware.
  • Bitcoins are not created by banks, nor are they regulated by any government.
  • You remain anonymous and free of taxes imposed by banks.
  • There’s a limited supply of bitcoins controlled by an algorithm.
  • Bitcoin’s value is increasing fast. If you had purchased $100 of Bitcoin in 2011, you would be a millionaire today.  

Disadvantages:

  • If your hard disk or other hardware gets permanently damaged, you’d lose your bitcoins.
  • Your money is gone once a transaction is made. The process is irreversible.
  • Governments are discussing bitcoin taxation more and more. Banks aren’t happy with the bitcoin boom. We’ll probably hear some news about it in 2018 and 2019.
  • Bitcoins are still considered a risky investment. It’s common to see the value flux drastically by hundreds of dollars in one day

If you have more questions, feel free to contact us through our website or call 1 (800) 719-9198. At American Verification Processing Solutions, we offer customized payment solutions for your business. Our solutions have helped several businesses to succeed and grow!