The cryptocurrencies are a type of digital currency with the potential to generate impressive investment returns, while the blockchain refers to the global computer network that manages all the information of transactions that are made with cryptocurrencies.
In this article, I will focus on the pros and cons of these two innovations of our new era, since anyone who knows anything about finance, should be very clear what these concepts mean.
For that reason, I thought it would be more interesting to talk about the advantages and disadvantages of investing in these two technologies.
Let us begin!
In principle, if we compare it with investing in private equity funds or risk capital, as the name implies, the risk is much lower.
Just a few months ago, in October of 2017, Datum launched its ICO (Initial Coin Offering) and has already raised more than $ 1.5 million in funds.
In addition, if we take into account that cryptocurrencies are based on a network, those who have invested in them know that they can withdraw their money almost immediately.
Why do investors like so much to buy cryptocurrencies?
The answer is very easy: because someone who has invested $ 1,000 dollars in Bitcoin in 2013, now their investment has a value of more than $ 400,000 dollars. Like that or more clear?
If you decide to buy shares of a startup to obtain a significant profit, you must look for a person interested in buying those shares or wait for an acquisition of the company to happen. Whatever the case, you have no way of knowing when you will be able to charge your investment. Learn more about investing in cryptocurrencies in this article.
The liquidity of cryptocurrencies is very high and can be sold in exchange for multiple currencies. ICOs can also constitute a highly , network; just look at the Intelligence, of 56,000 members of Datum ...
The ICOs of the cryptocurrencies are the same as a startup: if the resources are exhausted or they do not gather enough capital, they can not continue operating.
Definitely a well-assembled team is needed to consolidate a cryptocurrency, from the initial phase until it is successful in the market. So, if the team does not have a good organization or is not well qualified, it could misuse the capital and waste it quickly.
It happens the same as when you invest in the stock market or in real estate, you never know what can happen. A cyber attack could occur that leaves all investors without a single cent. Although that would be the worst scenario and it is difficult to Intelligence, what has happened is sudden losses in the value of the ICOs.
One of the biggest advantages of blockchain technology is being able to access its database without the need of an administrator or a third party. And the transactions that are made through blockchain have their own validations and authorizations, so verifying a transaction independently is very easy to do.
The data available in blockchain has incredible security. In addition to being consistent and being available at all times.
Since blockchain is a decentralized network, it does not depend on any control center. This makes it much more resistant to any type of threat or attack.
Due to the nature of the network, it may have a slower performance than centralized databases.
This happens because, with each transaction, blockchain must follow the same processes as any database, plus two others: signature verification and redundancy.
As all modern currencies are created and regulated by the governments of each country, it is difficult for the blockchain and the cryptocurrencies to be widely accepted, therefore, their regulations are not properly determined.
Although the blockchain can save you a lot of time and money in the long term, the initial cost can be very high.
And we have finished! These were the pros and cons of these two new technologies.