Data science

Here are the 10 Biggest Challenges Bitcoin is Facing Today

Here are some of the most prominent challenges that Bitcoin is currently facing.
Bitcoin is the oldest and currently the highest valued cryptocurrency in the market. According to Coinmarketcap.com, BTC’s present market capitalization is US$825.61 billion. However, bitcoin and many other cryptocurrencies are faced with several challenges and hurdles. Some of these issues are well-known and are spoken of quite often, but some have an ethical, social, technological, and political impact, and BTC is currently facing these issues. This article provides a list of the 10 most prominent challenges faced by bitcoin is presently facing.

Volatility: Bitcoin has been incredibly volatile since it was created. Experts predict that the price of BTC coins might reach as high as a million in a few years, and some say that it might even go down to zero. This environment has made bitcoin extremely popular among investors who believe that the price may rise even more, but it some fall significantly.
Cybertheft: Several guidelines exist to make BTC almost impossible to steal, but taking advantage of this system requires intricate knowledge about bitcoin’s working system and significantly more effort on the part of the user. In fact, many reports suggest that buyers lose their investments on exchanges and mining losses. Also, exchanges can be hacked despite the presence of a smart wallet.
Inability to self-regulate: Due to the lack of accountability on bitcoin, it is difficult to regulate its market behavior solely depending on the financial incentives. This causes several problems like smart contracts and other hacks plaguing the market, scammers can create fake investment crowdfunding and then run off with the money, and other related consequences. If bitcoin cannot be regulated internally, buyers will easily lose confidence to invest.
Tax issues: Presently, under the law, BTC is considered as intangible property, which means they are subjected to capital gains taxes. If the investors buy bitcoin and sell it at a higher price, they will be required to show the difference in their taxes. Every time the investors buy something with BTC, it will be a taxable event.
Scalability: The underlying technology behind Bitcoin is blockchain, which limits the amount of information that can be contained in each block to 1 megabyte of data. This limitation allows the network capacity of three transactions per second. As more and more transactions are executed, the more difficulty the network will face to keep up the records, resulting in serious processing delays.

 

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Little or no regulation: The bitcoin market is operating without any permanent or major regulations. The entire crypto market is operating without any permanent regulations because the governments still have no clear stance on the role of cryptocurrency in the economic landscape.
Very less mainstream adoption: Over the years, it has become easier to buy, sell, and use bitcoin, but still there are not many user-friendly investors to encourage mainstream adoption. If an average person would want to buy BTC, he or she would have to open an account in a bitcoin exchange like Coinbase, linking their checking account, and then wait several days for the transaction to clear.
New technology: Cryptocurrency is still a new technology, which came into existence about 10 years ago. These technologies are changing every day, influencing the market to evolve. The future of BTC is still unclear. Buyers contemplate the incoming conditions of bitcoin and hesitate to invest.
Reputation for criminal use: In the early days, bitcoin was well known on the Dark Web for money-laundering activities, or to purchase illegal items. As the only source of anonymous payment, bitcoin became an easy choice for people dealing with drugs, illegal weapons, and other related items.
Fraud: In addition to hacking, there is a significant amount of fraud in the bitcoin market. With the rise in the popularity of bitcoin, scammers have created fake exchanges to steal money. Several law-abiding organizations have warned against these scam activities where unsuspecting investors are duped into fake exchanges.
Limited use: Since bitcoin has turned out to be a new mode of payment, only a few institutions and nations recognize it as an authorized mode of transaction and as a viable currency.

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