A cryptocurrency is a digital asset that can function as a medium of exchange. As the name suggests, cryptocurrencies use cryptography to secure and verify transactions and control the production of new units of the cryptocurrency. These transactions, in turn, are stored on a “blockchain” ledger. Bitcoin, the most well-known cryptocurrency, is a decentralized digital currency network that employs blockchain technology to facilitate digital transfers of value, without the need for a centralized or trusted middleman. Cryptocurrency is a new innovation and our friend www.publish0x.com/AllenTaylor/Greatpost/01-12-2023 is worrying and asking himself this : «Are cryptocurrencies the beginning of the Ends times ? ». To solve this problematic, we are going to give the disadvantages of cryptocurrencies and conclude by clearly give an answer to his concern.
Disadvantages of cryptocurrencies
According to Ivaschenko (2016) the disadvantages of cryptocurrencies are as follows :
1) Strong volatility – almost all of the ups and downs of the BTC (bitcoin) value depend directly on the declared statements of the governments of different countries. This volatility creates the problem in the short term.
2) Large risks of investing in cryptocurrency that should be considered in the medium and long term. It is our opinion that the list of cryptocurrency (bitcoin) disadvantages are much longer, and are related to risk of money laundry, terrorist and other illegal activity financing, lack of a central issuer, which means that there is no legal formal entity to guaranty in case of any bankruptcy, and alike.
3) However, although it is very difficult to predict, many academics and professionals of this topic claim that the future of cryptocurrencies is bright since it will remove trade barriers and intermediaries, it would decrease the cost of transactions, and therefore boost the trade and the economy. Nevertheless, we should consider and pessimistic voices in the academic world as well, suggesting that the high risk of volatility, hacking risks, and lack of institutional backup makes the future of cryptocurencies not very optimistic.
4) Another characteristic is that it makes it easy to transfer money from illegal activities or to finance terror activities without the possibility of government intervention (Fernholz, 2015). In contrast, to traditional money transfers, the user in the Bitcoin system is pseudonymous. Contrary to a bank account user, they do not have to get through a "Know Your Customer" (KYC) process, where the user must identify himself, to have access to the Bitcoin market.
5) The decentralization and “the lack of flexibility in the Bitcoin supply schedule results in high price volatility” (Iwamura, Kitamura, Matsumoto, & Saito, 2014, p. 1). This high price volatility does not only holds for Bitcoin but for most of the cryptocurrencies, which makes it hard to store money and to make contracts in cryptocurrencies (Lo, 2014).
6) No government or central bank can influence the supply of cryptocurrencies, because the supply is defined in the underlying protocol of the cryptocurrency (Nakamoto, 2008). Therefore, no state can influence the flow of money, which limits governmental power.
7) There are many fake project in the world of cryptocurrencies.
In conclusion, according to me, none of these drawbacks cannot be managed. For instance a good aspect of cryptocurrencies is that they support financial inclusion because they do not require high technological standards besides having access to the internet and a digital device (for example a smartphone) to engage in transactions (Dow Jones Institutional News, 2018). Therefore we can clearly say No, cryptocurrencies are not the beginning of the Ends times.
References
CRYPTOCURRENCIES – ADVANTAGES AND DISADVANTAGES (Flamur Bunjaku, Olivera Gjorgieva-Trajkovska, Emilija MitevaKacarski)
FSBC Working Paper : The impact of cryptocurrencies on developing countries( Moritz Holtmeier, Philipp Sandner)
http://nodemdelve.substack.com (what is Bitcoin ?)
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