CRYPTOCURRENCIES – ADVANTAGES AND DISADVANTAGES

Abstract

Recently, cryptocurrencies and bitcoin have become the main topics in the financial industry. A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation. Cryptocurrencies have their benefits and drawbacks. The paper elaborates different aspects of cryptocurrencies, starting with their early development, challenges and risks, opportunities, advantages and disadvantages, and their future. In addition, the paper covered issues related to the practical and technical function of cryptocurrencies. It was concluded that is not easy to predict the future of cryptocurrencies, since there is a lot to be done especially in the field of formal regulations. However, the banks and other financial institutions should see and consider cryptocurrencies as an alternative for the financial transactions in the future.