Disadvantages of cryptocurrency. What don't we get talked about enough?

The innovative blockchain technology is very “raw,” which is manifested in the disadvantages of cryptocurrencies and especially clearly in the disadvantages of Bitcoin, the first decentralized coin to gain popularity. Yes, blockchain is rapidly changing our world, but it is not ideal.

It is necessary to know the negative aspects of digital coins, otherwise you will not be able to earn much from these assets or manage them effectively. Therefore, we will analyze the most important cryptocurrency disadvantages with frequent examples of the Bitcoin network.

1. Blockchain technology and virtual currencies are not easy to understand

Many people, even today, find it difficult to comprehend the digital existence of bitcoin, the new possibilities of using cryptocoins and the technical aspects of blockchain. The older generation is generally frightened by the fact that coins cannot be held in one’s hand. Also alarming is the lack of involvement of banks and states in the issue and circulation of decentralized money.

To use BTC or altcoins, you need a modern device (iPhone, laptop, desktop or iPad), special programs, some knowledge, and sometimes mining equipment. You can often come across a blank look from technically unsavvy people when explaining the nuances of how Bitcoin works.

Such barriers are of key importance because misinformation and ignorance lead to errors, financial losses, and mistrust in technology. This slows down the integration of cryptographic money and the expansion of its use.

2. Cryptocurrencies require an understanding of software security

Often electronic funds are lost or stolen. Users holding blockchain coins must handle special keys and mnemonic phrases carefully. If they are lost or stolen by hackers, the person loses bitcoins and other coins. Positive outcomes are likely here, but the chances are slim.

It is important to learn and get used to using private keys, crypto account addresses and seed phrases correctly. It is recommended to gradually study the special terminology of blockchain projects in order to eliminate the “stupid” loss of cryptocurrencies.

You can start by understanding the following concepts:
– cold wallets;
– public key;
– hardware crypto storage;
– mnemonic code;
– and etc.

Recommendation! From the first day of purchasing cryptocurrencies, you should study the aspects of their safe storage. There is a special need for such training before purchasing and storing bitcoins, since scammers are primarily focused on them!

3. Cryptocurrencies are inconvenient for frequent use

Like other cryptocurrencies, Bitcoin is impractical for small transactions and retail transactions. First of all, this difficulty is formed by three points:

– difficulties with any operations – you need to use the keys accurately, store them, keep them close – this is very annoying or annoying if you frequently manipulate coins;

– the increasing danger of hacking crypto wallets. Of course, blockchain technology is reliable, but the capabilities of fraudsters are also gradually progressing;

– problem of double spending of coins. Cryptographic money has the peculiarity of some delay in transaction confirmation. Time is spent on a sufficient number of confirmations by nodes (for Bitcoin there are 3).

A technical chance of double spending attacks is emerging, where 2-3 transactions are quickly paid for with one coin. The sellers also need to be hasty in accepting the payment for the scammers’ plan to come true, but often they do not wait for the entire confirmation cycle.

The risk of double transactions, losses, delivery of coins to the wrong party – these and other inconveniences are more relevant for providers of services and goods. That is, for cryptocurrency services and online stores with payment in bitcoins, ethereum or other coins.

4. Cryptocurrencies do not guarantee any consumer rights

There are no blockchain platforms yet whose internal coins or tokens provide consumer protection. Now actual and electronic transactions with fiat mostly protect sellers from fraud – refunds, insurance, compensation in other valuables. There are many options, but there are no such mechanisms in cryptocurrency networks.

You need to remember that every transaction with Bitcoin (other crypto coins) is irreversible and it is impossible to somehow prove fraud or accidental action. BTC transactions cannot be reversed, so care is required, complemented by trust in the other party.

5. Technical disadvantages of cryptocurrencies

There are a number of points that allow dishonest manipulation of the quotes of digital coins, their availability and reputation. The most well known of these dangers are:
– attack 51%;
– group of attacks “denial of service”;
– Sibyl’s attack.

Here it is impossible to hack the blockchain (the entire cryptosystem), but temporary force majeure is real, destabilizing the network. Attacks usually cause a sharp increase in complexity, slowdown of nodes, double transactions, etc.

6. For now… cryptocurrency is not for everyone

Satoshi Nakamoto designed Bitcoin in such a way that the problem of trust is eliminated – central, often dishonest authorities do not need to be trusted. Unreliable outside bodies (banks, government) were removed from the issuance, disposal and management of funds.

Everything is great, however, cryptocurrency technology requires constant responsibility, complemented by attentiveness. Minor errors can instantly leave a user or company without valuable digital coins.

In addition to the issue of security, cryptocurrency and especially bitcoin requires an understanding of the technology and competent use of its capabilities. You need a set of specific skills, even at a superficial level – after all, this is not WebMoney or online banking.

Many people are inaccessible to the nuances of the blockchain idea, therefore, the full use of cryptocurrencies and the prospects they provide are blocked.

Conclusion

The analyzed aspects are atypical for the modern Internet, where thematic blogs contain identical disadvantages of Bitcoin, formulated in different words. We need to progress, learn new concepts and facts regarding virtual currencies and their properties.

Blockchain technology is the future, where the importance of decentralized coins is obvious, so you should know all the disadvantages of cryptocurrencies.