It is obvious, everything in the universe has a positive and a negative side; when things have advantages they come to you with certain limitations as well. It simply means that every coin has a flip side, so has the Cryptocurrencies. Be it Bitcoin, Ethereum, Ripple, Factom or Maidsafe Coin they have their limitations which you must understand, validate, analyze and only then should invest.
So many discussions, debates, research, and studies are done to determine if the new age digital currency- Cryptocurrencies are safe, aggressive, high profit seeking, acceptable investment options. Though with each passing day the acceptance is proliferating, there are certain limitations each of the altcoins has. You must acknowledge them, to better your understanding, which ultimately will give you desirable profits.
Limitations of Bitcoin
Though this altcoin is at the top, with the highest acceptance, amongst cryptocurrencies, it has a certain weakness.
1. Absence of Knowledge
Much of the population is still not aware of the currency. Therefore people who have the acceptance are not able to benefit from its potential. The larger the acceptance the better is the utilization of its potential. Networking and sharing of information about Bitcoin are important.
2. Unpredictable Rate and Risk
Bitcoin is limited in numbers and with each passing day the demand is increasing, resulting in volatility and the fluctuations are high. Only when businesses, institutions, states start accepting it then there will be stability. Till then the risk remains.
3. Primitive Stages of Development
The first to be launched in the market, Bitcoin needs up gradation and development in terms of features, tools so as to make it more safe and secure. The ecosystem of Bitcoin, currently, might facilitate fraud and other criminal activities.
4. Masked Ownership
The digital QR code is vulnerable to theft and when you do not now the owner the chances of recovering a thief’s digital footprints is impossible.
5. No Central Control
The absence of any control, not for restriction, for even the betterment is absent and hence is a limitation. The supply of Bitcoin is limited by algorithmic design and you cannot expand it to make it approachable to a larger population in the economy.
Limitations of Ethereum- The best decentralized application platform, and the best smart contract blockchain Ethereum too has its limitations.
1. Complexity Of Being A Platform
Unlike other digital currencies available today Ethereum is a platform and not chain. It is just not a ledger; it is a super computer, smart contract generator and so much for accommodating the needs of others. This makes it complex and less user-friendly. This definitely means a lot of freedom, but makes it difficult for using it for only one case.
2. Risky Up gradation
To ameliorate the platform from evidence of work to evidence of Stake can result in critical changes in its architecture. There are chances that this may result in the crash of the system. Also, the speed of transaction is not swift and is struggling at times.
3. Lack of Knowledge Sharing
The knowledge of how the Ethereum blockchain is created, so that in future it can be bettered is not known. What is available as knowledge, are just the conceptual information of the altcoin. Therefore if you wish to become an Ethereum developer you cannot, at least in current status.
Limitations of Ripple
There are numerous misconceptions about this Cryptocurrency, which makes it unsafe and you must decide before you invest.
1. No Capping
There is no capping on the units, unlike other cryptocurrencies. Therefore the chances of getting used as general currency increases, which also make it susceptible to inflation. The probability that the value will appreciate after a certain level is very low.
2. Centralized
The system is not decentralized and hence there is each transaction is always at risk of being seized and dismissed. It is run by a single entity, the ones who created them; this also makes it extremely risky and cannot be used to temporarily use it as a store of value.
3. Closely work with Banks
The system is a corporate offering and working closely with banks, with the purpose of international transactions between banks.
4. Pre-mined
Ripple, unlike other cryptocurrencies like Bitcoin, is “Pre-mined”. In case of Bitcoin each unit is generated or mined as a reward to miners, but Ripples are pre-mined and are in the hands of the one who made Ripple.
You find one or the other factors mentioned above are present in almost every Cryptocurrency. The real test for you is to chalk-out the best one which has no such problem or has the minimum limitations, just like you find with GDC Coins. GDC Coins have a team which has 16 years of forex trading wisdom and Cryptocurrency trading experience of more than five years.
Conclusion
No doubt altcoins are the best investment options in today’s scenario; still, you need to be watchful when investing. You must weigh the Pros and Cons of the digital currency to find its worth.
Published by GDC Coin
Hi, I am AJIT PATIL from India. We have over 16 years of experience in forex trading besides having an in-depth expertise in crypto currency trading for the last 5 years. Get more detail Pleaes contact us: http://www.gdccoin.comView all posts by GDC Coin
