Pros and Cons of Investing in Bitcoin

What is Bitcoin?

Bitcoin is one of the oldest virtual cryptocurrencies. It uses peer-to-peer technology for its operations. There is no regulatory body or authority like a bank monitoring or regularizing the usage of Bitcoin. The decentralized network does any transaction and issuing of bitcoins activity. 

Bitcoin is an open-source currency, and it has been designed in public where nobody owns or controls the mining of Bitcoin. Hence with its unique features, Bitcoin brings benefits that were not there in any of the previous payment systems.

History of Bitcoin

Bitcoin has seen a journey of a roller coaster in the last decade. From its beginnings in 2008 to its peak price in 2017.

Bitcoin was introduced in October 2008 by a person under the pseudo name of Satoshi Nakamoto. It offers a parallel online payment system with lesser transaction fees than traditional online payment mechanisms.

Bitcoin is an asset that is not controlled by any central authority. Bitcoin is highly secure, liquid in nature, and has a limited supply for trading. The limited supply has made the demand surge and made Bitcoin attractive.

How Does Bitcoin Work?

The system of Bitcoin comprises a set of nodes (also called computers or miners) where the code is run and saved in the blockchain. A blockchain is nothing but a collection of blocks joined one after the other. Each block holds the record of transactions.

Bitcoin uses cryptography to keep the process secure. Bitcoins aren’t physical, and they are balances kept on a public ledger with enough transparency.

Bitcoin is based on peer-to-peer technology. The Bitcoin miners run the algorithm and search for the new Bitcoins.

Is Bitcoin safe and legal?

Bitcoin being so attractive has piqued the interest of investors and criminals, and hackers. Thanks to blockchain technology on which Bitcoin is based, which inherits ‘security’ as one of its inherent features. So from an information leakage or hacking perspective, Bitcoin is pretty much safe to have.

As for its legal status, Bitcoin has been made legal in many developed countries. The legal status is dangling in between in many of the emerging countries. But from a taxation perspective, Bitcoin is yet not a legal tender. Hence the tax laws differ from those on other currency items.

Pros and Cons of Bitcoin


1. Accessibility and Liquidity

Accessibility and Liquidity is the most significant advantage of cryptocurrency.

Bitcoin takes just a few minutes to get transferred; hence it can act as a surrogate currency to purchase goods and services. It can be spent in any country and be exchanged for local currency.

2. User Anonymity and Transparency

Numerical codes identify Bitcoin owners, and public keys are assigned, ensuring that transactions can’t be traced back to the owner. Personal details of the user are never shown.

3. Independence From Central Authority

Bitcoin is a decentralized currency. There is no government or authority which controls the currency or its transaction. This means none of the authorities can freeze and demand your coins.

Also, the taxation laws are not implemented on Bitcoin transactions. The users get the autonomy of their money as the price is free from government policies.


1. Volatility

Because of the limited supply, Bitcoins’ value is intact. The scarcity makes its price often fluctuate, without any reason, and the price solely depends on demand and supply.

2. No Government Regulations

Though Bitcoin is decentralized, hence secure to invest in, having no regulatory body comes with its risks. Bitcoin transactions don’t have any legal protection. They are irreversible. And if any scam or mistake happens, it cannot be undone or raised to any authority.

3. Irreversible

Any transaction, once done, is irreversible, anonymous, and unregulated is final. Nothing can be done for the mistake in the transaction, be it the wrong amount or the wrong recipient.

Future of Bitcoin: Crypto Experts

With a massive price hike in 2021, experts believe, according to the Bitcoin forecast today, that it is just a matter of time when Bitcoin will hit the mark of $100,000.

People’s interest in crypto has skyrocketed. With many other currencies’ prices surging, Bitcoin tops the trend. The industry is evolving too, and Bitcoins are now seen as an investment and the alternate currency.

Mainstream companies are interested in Bitcoin, and they are adopting themselves to accept Bitcoin as currency. Many companies are taking payments in the form of Bitcoins.


With all the possible risks involved, the advantages still outweigh the risks. Cryptocurrencies are used as a separate source of income and investment rather than for purchases as of now. The valuation has surged in recent years and will continue to do so in the coming years. Even the usage of crypto will expand from being a tool of investment to a currency to purchase goods and services. This makes the future of Bitcoin bright and worthy.

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