The Good, Bad, and The Ugly Side of Bitcoin: Should You Buy it?

Bitcoin is at a volatile stage right now, so investors' are increasingly speculating about its future potential 

Recently, the value of Bitcoin dropped below US$40,000, which is down significantly from its value back in 2021 of around US$65,000. While Bitcoin has been out for a number of years now, BTC and other cryptocurrencies became popular and gained traction quite recently. There are many individuals who have only recently educated themselves about the use cases and applications of cryptocurrencies. Bitcoin, being the oldest and the most trusted cryptocurrency in the market, has captured the attention of financial institutions and centralized organizations. The fact that Bitcoin is not backed by any economy, central bank, or tied to a physical representation of value, like gold, has led regulators to wonder why countries would want to use it as a currency. But, the value of Bitcoin though lies in how it is mathematically generated or minted. Almost every hundreds of computers attempt to solve a computational puzzle requiring an extreme amount of computer power. One of the many reasons why Bitcoin is regarded as harmful to the environment. 

The Advantages of Owning Bitcoin

It has been noticed that there are a number of advantages of keeping Bitcoin as an asset. It has recently captured a considerable size of the market on a global scale. Thousands of business leaders and aspiring business leaders are thinking about integrating cryptocurrency transaction options. Bitcoin enables easy cross-border transaction options. With the help of BTC, conducting transactions in other countries is not an issue anymore. Its growing acceptance is a significant help to the business community because the transaction fee remains the same for local and international trade. 

Besides, since Bitcoin is the most owned cryptocurrency, therefore, it has greater liquidity in comparison to its peers. It does not lose much substantial value during any exchange from fiat, and this is one of the many reasons why people are attracted to BTC more than its peers. And as far as security is concerned, Bitcoin has maintained a two-layer security process. The private key is what allows users to send money to other accounts. Hence, it is imperative that BTC investors are careful who there share their account information with. 

The Dark Side of Bitcoin

Coming to the point where Bitcoin reached its peak, experts believe that it is the awareness of Bitcoin, especially through media attention in 2011 that the coin started getting real traction. Earlier, Bitcoin was infamous for being extensively used to execute illegal transactions and for terror financing purposes in black markets on the Dark Web. The Silk Road was the first online darknet market that allowed users to browse and shop anonymously without the risk of being tracked. Bitcoin was extensively used on this website for purchasing illegal items. The pressure on the authorities kept piling up, as they call for regulations kept getting louder and louder. Bitcoin may have its merits, but there are several demerits that the coin needs to face. The rapid price fluctuations of BTC are considered minor drawbacks of Bitcoin by those who have actually witnessed the wrath of the cryptocurrency. 

BTC is considered inefficient for retail. All cryptocurrency transactions rely on blockchain technology which is a mutual agreement-based system. The technology involves sharing, updating, and validating ledgers at multiple places, making the system very slow for retail transactions. In such scenarios, cash or cards are much faster. Besides, there are no legit market regulations for handling cryptocurrencies. Even the governments are skeptical about the viability of Bitcoins. Therefore, no government-regulated financial institutions support the transactions of cryptocurrencies. Moreover, due to the lack of regulations, cryptocurrencies are extremely difficult to track. BTC tokens are prone to bring financial chaos if all transactions are beyond the control of regulators. Apart from this, mining cryptocurrency consumes a massive amount of electricity and it may even take nearly 25% of the miners' revenue. Unless government institutions can arrange for renewable sources of energy for Bitcoin mining, it is not really worth it. 

So, Should You Consider Buying It?

Having pros and cons is a part of digital currencies. Like any other cryptocurrency, Bitcoin also has its merits and drawbacks. But the real question is, can regulations improve the present conditions of Bitcoin? Will it encourage more institutional adoption? Because if not, then Bitcoin might slowly start to lose its relevance to other altcoins. The market movements of Bitcoin also portray that crypto has undergone massive changes since last year. Well, it is quite clear that crypto is at a very vulnerable stage right now, so if you are investing in it, make sure you assess all the necessary details and constantly stay in touch with the market analysis and price predictions.