Cryptocurrencies can be an extremely volatile investment. Cryptocurrencies have yet to prove to be a long-term investment. Newcomers to the cryptocurrency world are vulnerable to security risks. Probably the biggest concern with cryptocurrencies is the scaling issues that arise.
While the number of digital currencies and their adoption are rapidly increasing, they continue to be overshadowed by the number of transactions the payment giant VISA processes each day. In addition, the speed of a transaction is another important indicator that cryptocurrencies cannot compete at the same level as other players such as VISA and Mastercard until the infrastructure offered by these technologies is massively expanded. This evolution is complex and difficult to carry out smoothly. However, some have already proposed several solutions, such as lightning networks, fragmentation and stakes, as options to overcome the problem of scalability.
Like any other investment, cryptocurrencies are not risk-free. Market risks, cybersecurity risks, and regulatory risks, as no authority in India's central government issues or regulates cryptocurrencies. Considering all the advantages mentioned above, it's hard to argue that investing in cryptocurrency has no value. Several cryptocurrency exchanges and wallets help investors trade cryptocurrencies and convert currencies with minimal transaction fees in different wallets.
Investing in cryptocurrency may seem attractive and profitable, but investors should also consider some disadvantages. When Warren Buffet emphasized the drawbacks of cryptocurrencies, the experienced investor emphasized the lack of a regulatory authority to control the assets of this market. When mentioning the pros and cons of cryptocurrencies in debates about the currency, the lack of a regulatory entity leaves room for doubts about the safe operation of the currency and its security measures, not to mention the ethical norms associated with it. They offer too many of the advantages that consumers are looking for in a currency today, including decentralization, transparency, and flexibility.
If you're not a native of the digital world, the concepts of cryptocurrency—not to mention blockchain—may seem completely unknown to you. Price volatility, their alleged use in criminal activities that can be difficult to identify and the high consumption of energy for the extraction of coins are considered some of the main obstacles to the acceptance of cryptocurrencies, in addition to the fact that these currencies have no sovereign guarantee or approval. Possibly the biggest disadvantage that many see in cryptocurrencies and their many supporters is the lack of understanding of the concepts surrounding the new currency. A blockchain can store information about cryptocurrency transactions, decentralized smart contracts, or ownership of non-fungible tokens.
This is because cryptocurrencies have a certain lack of innate value, since the digital currency is not connected to any tangible asset. While many supported the decision, as it marks the beginning of the path to the recognition of cryptocurrencies, the Government of India has yet to issue an official note for cryptocurrencies to be considered legal in India.
