With the advancement of technology, many things have been invented, cryptocurrency being one of them. It is a system that provides digital means of payment, one of the most common types of cryptocurrencies is Bitcoin.it provides a medium of investing and potentially getting profit from the selling and buying of crypto. Cryptocurrency brings on the table many positive impacts but at the same time, it also has its challenges and shortcomings.
With the invention of every new technology, different rules have to change, and new policies that have to be put in place for the proper management. So, what are some of the legal ethics that come along with the invention of cryptocurrency? What are their advantages and disadvantages? Here, we take you through some legal ethics of cryptocurrency and some of its merits and demerits.
Positive legal ethics of Cryptocurrency
Security and privacy
This is one of the major concerns when it comes to cryptocurrencies. Cryptocurrencies are developed using strong blockchain ledgers that are difficult for anyone to decode. They use properly organized pseudonyms which are not connected to user profile or accounts.
Controlling the amount of inflation is the basis of any cryptocurrency, this helps control the number of traders on the platforms. Many cryptocurrencies have had a quick downfall due to inflation. A good example of this is Bitcoins which are only 21 million in the whole world, when the demand increases, the value of Bitcoins goes up as well. This goes a long way in preventing the level of inflation.
Self-governing and Management.
The success of every organization lies in the quality of management that runs it. The transactions that are involved in cryptocurrency are stored by the developers who are paid to do the job, this helps in providing accurate information on the transaction
Cryptocurrency provides a secure and fast transfer of funds; this is made possible through its lightning-fast transfer speed. The main contributor to this is the little time required for the processing of transactions. Recently customers were allowed to trade in cryptocurrency with PayPal, we talked about it with the businessaddicted.com team. This is a valuable ethic that encourages users to use cryptocurrency for their money transfer.
Cryptocurrency provides a cost-efficient way of making money transfers. This is because it has a wallet-to-wallet money transfer system that enables it to transfer money from a cryptocurrency account straight into the recipient’s cryptocurrency account. This helps cut the cost because no third parties will be involved in the process, third parties such as PayPal or VISA will not be part of the transfer process.
Negative legal ethics on cryptocurrencies.
Despite the many benefits that come along with cryptocurrency, there are also a couple of challenges. Cryptocurrency has created a loophole for many illegal transactions to be carried out. Criminals can now make transactions easily without being tracked by the government by the use of cryptocurrencies. Money laundering has also been easier by the use of cryptocurrency, most illegally obtained money can be cleaned through the use of crypto.
Data loss can cause massive losses
Since cryptocurrency is a purely an electric form of transaction, all the details are kept in a digital form. A slight loss of data can cause the loss of a lot of money, this is because once an account holder does not provide the correct information, the account may become permanently blocked.
Susceptive to hacking
Even though cryptocurrencies are well secured with the latest technology and hard coding, they can still be hacked. Personal data and wallet details are stored well but if anyone gets hold of critical information about an account holder, the account can easily be hacked and money stolen and also give them access to other accounts. This has happened before and even though very secure measures have been taken, there is still potential for another hacking.
There is no refund or cancellation protocol
This is usually the case especially if a dispute arises between the sender and the receiver. If in case someone transfers funds to another account by mistake, then the funds can’t be reversed. This creates a loophole where scammers can defraud people of their funds and walk away with it.
Severe mining environments
Cryptocurrency mining consumes a lot of power and also requires very advanced computers. Normal computers cannot do the mining process, which makes it hard for many people to undertake it.
Cryptocurrency is continuously growing and many ethics are involved. With the new technology at its peak, new policies should be put in place to guide the entire process. Every invention has its shortcomings, but dwelling on the negative side will only make it difficult for technological advancement to move forward.