In this modern day and age, especially in today’s uncertain times, more and more people are shopping online or are making purchases from their home computers, smartphones and tablets. While most online companies accept debit and credit card payments, it is not uncommon to see certain retailers accepting a form of payment known as cryptocurrency. Understanding what these types of funds are and how it can work for you is crucial when using it correctly.
What is Cryptocurrency?
Essentially, cryptocurrency is digital money that is created and protected using code. This form of payment is monitored heavily by a peer-to-peer protocol and includes an encrypted string of data specific to its worth. Some of the most popular forms of cryptocurrency include Bitcoin and Ethereum, with Bitcoin being one of the most popular and widely used. The value of such currency has increased over the course of the few years it’s been in circulation. Different cryptocurrencies can be traded against each other via dedicated crypto exchanges, without the need for traditional cash transactions. Additionally, crypto CFDs (contracts for difference) are available for those who wish to speculate on cryptocurrency price movements against the US Dollar.
Pros
One of the most obvious benefits of using cryptocurrency is that it is not specific to one country. Unlike money that is specific to one or two areas, this form of payment offers ubiquity. Funds are effortless to transfer, authenticate and secure, so you won’t need to worry about issues with late payments. Transactions are final and cannot be reversed, so you won’t need to deal with people wanting refunds and returns when handling payments. Transfers take just seconds in comparison to other forms of payments that can take minutes, hours or even days.
Cons
A common problem with cryptocurrency is that some establishments may not accept it. This means that you won’t always be able to use your Bitcoin everywhere that you go shopping. Bitcoin and other methods are vulnerable to theft like any other form of payment that you might have used in the past, so you’ll need to take security measures to keep your balance protected. Because Bitcoin and other types aren’t government-backed, some people don’t trust payments using these methods and will not accept them at all. While it might be considered a positive for many people, the fact that all sales are final and irreversible can be a deterrent for some.
The Bottom Line
Bitcoin and other options are still considered a relatively new form of currency and they aren’t entirely understood by a lot of people. It’s not used everywhere and even though it’s gone up in value since first introduced, it has had issues with maintaining this value over time. For this reason, it’s crucial that you educate yourself about different methods before investing into anything or using them for yourself. Many people rely heavily on funds, like Bitcoin, while others may be hesitant to make the switch. Educating yourself about how cryptocurrency works and what you can expect out of it will make all the difference in terms of your financial security.