Bitcoin has a number of advantages:
As the first cryptocurrency to capture the public imagination, Bitcoin has “first mover� advantage and a head start over the competition. Total issuance is limited to 21 million, so it is unlikely to be devalued because of the prospect of a massive influx of new bitcoins. As a decentralized currency, Bitcoin is free from government interference and manipulation. Transaction costs are much lower than with conventional currencies.
On the flip side, Bitcoin’s disadvantages include:
The price of a Bitcoin has been increasingly volatile, making it difficult to assess its real value and increasing the risk of losses for investors in the cryptocurrency. The relative anonymity of Bitcoin may encourage its use for illegal and illicit activities such as tax evasion, weapons procurement, gambling and circumvention of currency controls. The fact that bitcoins exist primarily in digital form renders them vulnerable to loss.
Conclusion
Bitcoin has made significant progress in its adoption and usage since it was unveiled in 2009. Its evolution over the next few years will determine whether this leading cryptocurrency will become an integral part of the global financial system, or whether it is destined to remain a niche player.
Sources: http://www.coinsetter.com http://www.forbes.com/sites/investopedia/2013/08/01/howbitcoin-works/