7 Biggest Challenges Bitcoin is Facing today
Bitcoin has been around for some time now, but still, digital currency has a long way to go. Among all the digital currencies, bitcoin has the most value. That is why people want to know more about bitcoin trading. It has many benefits and is claimed to be the future; that’s why many of us are researching or investing in bitcoin. However, what most people ignore before investing is looking upon some of Bitcoin’s challenges. Even with cryptocurrency trading apps like Bitcoin Prime, where much profitability is guaranteed, this digital currency’s challenges don’t decrease. Here are a few of the many challenges Bitcoin faces today.
The scalability problem of bitcoin means that it has a limited capability of holding a large amount of transaction data on its platform. Each block in bitcoin can contain about 1 megabyte of data, and within this limit, it can perform only three transactions in a second. That means that the more transactions in bitcoin, the longer it’ll take, albeit you select the most straightforward place to shop for it. The rate at which the transaction takes place is still the same.
- Environmental concerns:
Bitcoin is also facing the problem of excessive energy consumption for a small transaction. Bitcoin is a decentralized currency that is not regulated by only one authority but is constantly updated by many miners worldwide from a network of computers. For miners to mine some bitcoin, they have to solve complex math problems for the transaction to go through. They get rewarded a small fraction of the bitcoins traded for it. The mining equipment consumes a lot of electricity. Also, bitcoin has an average of 549.74 kgCO2 of carbon footprint, which means 912624 hours of watching YouTube.
- Difficulties in transactions:
The transaction process isn’t simple, even though you select one among the simplest places to shop for bitcoin. Carrying out bitcoin transactions is quite hard. Transactions from bitcoin are carried out in a more complex manner than credit or debit card transactions. That is why for bitcoin to be used commonly and obtain the expansion it deserves; it first must be easy to access because bitcoin lacks interoperability.
- Tax issues:
After further research, we should also decide how we should do taxes once we perform a transaction through bitcoin. There aren’t proper rules set regarding bitcoin taxation. That’s why it can make it easier for people not to pay their taxes. When you sell bitcoin more than it costs you, you must report the difference when doing your taxes. Every time you make a transaction, you would have to report the difference in the purchase amount and the amount that costs you to buy that bitcoin which can get hectic.
- Speculations and regulations:
Another challenge that bitcoin is facing is its negative image. Since bitcoin transactions are anonymous, it has made it easier for people to make illegal transactions. Not only that, but it also has a history of being part of money laundering schemes as well. These activities have given bitcoin a nasty reputation among the overall public. For bitcoin to be more successful and regulated, it first has to work on its regulations and become reliable. If the general; public doesn’t know what to expect of something, they will never trust it.
- Fluctuating Rates:
Bitcoin also has to face the issue of its fluctuating rates. People never know what to expect. The rise of the bitcoins rate can be beneficial for investors. However, if bitcoin wants widespread acceptance, it has to be stable. Stability is crucial for it to become a reliable source of value. The rapid change within the currency’s value will deduct its chances to be widely used.
- They could crash:
It is another thing for social apps to get crashed; however, if a platform running a global transaction system gets crashed, it can spur a lot of problems. Even if you choose the best place to buy bitcoin, it will not guarantee that it will never crash. With the crash of bitcoin, the investors have to suffer losses. For bitcoin to be regulated widely, it needs to act responsibly and be held accountable.
Bitcoin remains a replacement concept, and there are tons of challenges that it’s to beat for its mainstream acceptance. However, people get interested in investing in bitcoin and search for ways to invest in it. They should be aware that bitcoin still has a long way to go to be accepted as a form of currency. Experts, traders, and budding investors will keep speculating the destiny of crypto currencies. We will know one thing for sure, that it will be a thrilling journey.