Now, people are increasingly getting attracted to cryptocurrencies as an investment option. However, there are always two sides to the coins – and the same rule applies to cryptocurrencies. While the whole world is gushing over how fantastic the returns of cryptocurrencies are, there’s a downside to it too. Not many really talk about it, as the world of cryptocurrencies is super glitzy. But to help you make informed decisions, here we have listed a few cons of cryptocurrencies which you should keep in mind before taking a step ahead and investing in them:
No government control:
While the crypto world considers being a significant benefit, no government control means no one really knows what’s happening in the crypto world. This leaves people to do whatever they wish with no ruling authority to question their actions. This is a major drawback as the privacy of the transactions, which is super guarded in cryptocurrency transactions, can be misused for clandestine activities too.
Not acceptable everywhere:
Cryptocurrencies are known to be one of the best payment methods; however, they are the other way around too. You may wish to use cryptocurrency to carry out multiple transactions whenever you step out to shop. But it isn’t possible as many vendors don’t accept payments in cryptocurrencies. This means that the accessibility of cryptocurrencies is not yet widespread and is limited- at least as of now.
Software bugs:
You cannot see, feel or touch the cryptocurrency – it is entirely virtual and software-based, which makes it vulnerable to the bugs that are a common feature in software. Although such an incident hasn’t really occurred in the world of crypto trading, the possibility of such a thing happening cannot be denied entirely. And the fact that cryptocurrencies aren’t covered under any law makes the investors even more vulnerable in case of any untoward happening.
Lose your key, lose your coins:
If you lose fiat currency anywhere, you can get it back somehow. On the other hand, there is no way at all to recover the cryptocurrency coins you have purchased if you happen to lose them in any way. Also, most of the cryptocurrencies don’t really offer any copies of transactions made and investments held (it’s all virtual), making it difficult for you to prove that you actually owned some cryptocurrencies that are now gone. Once you lose the private key to your crypto wallet, its money gone – forever.
Wild fluctuations:
Although cryptocurrencies have fetched many people tremendous returns, it cannot be denied that the currency values waver like no one’s business. The value of cryptocurrencies changes drastically. Thus, people can’t predict whether getting cryptocurrencies is worth their money. Take an example – in the year 2014, the value of Bitcoin ranged from between $30 to $1000! Imagine the gravity of fluctuation. This also means that one who is well versed in investing in cryptocurrencies is better off understanding the tricks of this trade. But those who are just investing in cryptos, expecting an exceptional payback, eventually won’t benefit anything from it.
