Advantages:
* Lack of gravity simplify construction technologies (such as cranes) and reduce structural strength requirements
* Large number of possible sites, with over 300,000 asteroids identified to date
* Asteroids contain several chemical composition classes, including iron and carbonaceous, providing a variety of materials usable in building and fueling spacecraft and space habitats. The Trojan asteroids, in Jupiter's orbit may be primarily extinct comets.
* Some Earth-crossing asteroids require less energy (delta-V) to reach from Earth than the Moon.
* Material mined from asteroids could be a basis for a trade economy
* Lack of gravity significantly ease transportation of material from asteroide, goods among asteroides and transport of large amounts of mass or massive objects
* Hi surface/volume ratio enables effective exploration and explotation of mineral resources and provide maximal portion of usefull build ground on the surface and underground
* Hi-vacuum and lack of gravity facilitate evolution of some Hi-tech industry such material engineering and physical electronics (crystal growth, epitaxy)
* Many asteroids (especially the extinct comet cores) contain large amounts (more than 5% of total composition) of volatiles and carbon, which are necessary for life support.
* Isaac Asimov pointed out the advantage of building cities inside hollowed out asteroids since the interior area in square miles of all the asteroids put together is a great deal more than that of the surface area of Earth (viewed as a series of cubes one mile (1.6 km) by one mile resting on the surface of Earth) and thus a large population could be accommodated in the asteroid belt.
Disadvantages:
* Low gravity. Humans would have to adapt, or asteroids would need to be given a sufficient spin to induce artificial gravity.
* Most asteroids are far from the Sun. The main asteroid belt is roughly 2 to 4 times further from the Sun than Earth. This means that the available solar energy (solar constant) is 4 to 16 times less, although building large reflectors to collect sunlight is possible in space.
* Many asteroids may merely be loose agglomerations of dust and rocks, which may be very difficult to use.
* Asteroids are vulnerable to Solar radiation, lacking similarities like Earth's ozone layer and magnetic field (though some may have magnetic fields, they are bound to be considerably weak by comparison) and many are themselves composed of radioactive compounds.
* Because of the issues of the last bullet, asteroids are extremely cold. This and the fact that they are thought to be devoid of water are thought to be the reasons why life never developed on them.
* Asteroids don't have atmospheres.