Chapter 6  Advantages & Disadvantages of Cryptocurrencies

There are many advantages but also disadvantages to trading crypto and being involved in crypto. We’ll break each of these down for you. Although this market has been created as a revolutionary way to perform transactions there is still a lot missing and adoption into the real world may not be as easy as 1,2,3.


Decentralization is a new regime that has not been established before. Right now we’re very centralized with our monetary policy. We’ve got banks and financial institutions controlling and acting as an intermediary to help transactions between parties. Crypto would eliminate the need for that intermediary and the possibility for a single point of failure. Just as we saw in the 2008-09 financial crisis due to mortgage-backed securities in US banks. Which saw the death of Lehman Brothers, Bear Stearns, and more.

Crypto makes it a lot easier to transfer funds between two parties, without third-party trust (banks, wire, cards, you name it). Decentralized transfers are secured by public and private keys.

Crypto transfers are faster and cheaper than third-party transfers.

Crypto can result in a substantial financial gain whether investing or trading. Rather than traditional investment measures, cryptocurrencies move a lot more in a shorter period of time. Cryptocurrency’s overall market cap went from $200BN in Jan2020 to over $1.7T in Jan 2022, in a 2 years span that is an increase of 750%. In comparison, if we look at the US largest company, AAPL. In Jan2020 the market capitalization was $1.35T and in Jan 2022 $2.85T. Increase of 111%. Which by traditional investments is a substantial amount just far less than crypto.


Crypto does leave a digital trail, where agencies, just like the FBI can decipher. Earlier thought to be anonymous, they can be tracked back technically.

Crypto is a popular tool among the dark web, where criminal activity can be explored. There has been a case of Dread Pirate Robers, who sold drugs on the dark web. Also used by hackers as ransom money, and ransom money in general.

Crypto, although it can be a huge opportunity for gains, its volatility is almost unmatched, maybe in the penny stock market and overall market crashes. But there are so many cryptocurrencies created in the world that have no real value and those that have potential value are so new that there is a huge spike in volatility. For example, even Bitcoin falls 30-50% without batting an eye and it’s normal. It has been known as a short-term fad, time and time again but slowly showing its true potential.

Crypto is assumed to be stored safely however there have been a lot of cases of hacks in brokers as well as wallets and areas of storage. There have been reports of millions of dollars stolen. That is where there are cold wallets like Ledger that make it near impossible, if not impossible to infiltrate.

Crypto-currency ownership is highly concentrated, about 11,000 traders and investors own 45% of all Bitcoins surging value (based on MIT study) Meaning that even though it is decentralized, it is somewhat monopolized.

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