In the world of crypto, everything is considered perfect but its not always sunshine and rainbows. Everything has their negative aspects and we will see some of the negative aspects which I am sure we all of us will agree too.
- Instant trading on exchanges is great and unique but exchanges are the main targets for hackers and lack features like assistance with tax reporting.
- Cryptocurrency is like having your own bank as there is no central third part involved by there is no fraud protection of any sort, nor any features of banks which might make it difficult for some users because they might rely on banks and feel more secure.
- States or any government can’t control or benefit from the value of decentralized cryptocurrencies but only a few countries have currencies as unstable as crypto and values come from low volume online global exchanges leading to wildly unstable assets
- Anyone can create a cryptocurrency but some smart users create cryptocurrencies, the rest users are scammers or pump and dump and there’s no stopping them from participating on exchanges.
- Sending across the world is not a big problem anymore and you can send it for very little cost but as crypto prices are never stable so it’s possible that in a short amount of time, this can lead to the unfortunate situation. The cheaper way is to send fiat currency
- Cryptocurrencies market is highly c volatile which means that you can make at any moment but most people do not trade well and can’t benefit from the constant volatility. Also, Human beings need sleep and cryptos can experience corrections while you are sleeping, this forces one to automate trading. Not a good thing, right?
- Crypto world is exciting and there’s a high demand at all-time which creates high value but the crypto market tends to produce a sort of irrational exuberance that leads to constant bubble and bust cycles.Basically what happens is that some crypto gets absurd valuations because of their underlying technologies, use values, transactions data and supply. However, this hints at future instability, more bubbling and busting which leads to gambling and less revolution. It’s a never ending cycle and we don’t want to get stuck inside it
- Crypto is taxed as capital gains in the United States which is better than being taxed as ordinary income just like keeping your money. But the impossible tax reporting makes life very difficult for the user and crypto traders. It’s worse as one owes taxes when they use crypto and trade it with other coins, it is likely many will end up owing fee and back taxes, which is not something we want.
Quick conclusion: As much as cryptocurrencies have good qualities and features, let’s not forget to always a look at the negative side of thing. Not to be a pessimist but it’s important to know what you’re getting yourself into. However, smart contracts, decentralized one world global payment systems, peer to peer democratic and tamper-proof records are clearly good things about the cryptocurrency..