Do Bitcoin Loopholes Still Persist?

Recalling the Bitcoin Evolution

In the previous article, we already learned about how the crowned currency evolved over time, and how massively it has established itself in the cryptocurrency market as well as the globe.

Bitcoin was created by Satoshi Nakamoto, a shadowy figure, who is still anonymous to this date.

In the beginning, Bitcoin had no value, and some folks used 10,000 BTC to order a couple of Pizzas from a domestic Floridan restaurant.

But as it started its growth, while seeing a downsurge for a bit of time, it made it to its all-time high of $66,974.77.

Issues Persists In Bitcoin

Sure Bitcoin has covered a long journey in the cryptocurrency sector to dominate the market, but still, the crowned currency has its own issues that acts as the barriers to keep it from a widespread adoption as a means to pay for services and commodities.

These issues include scalability, security, simple utilization and more. Sure, people love Bitcoin, but if these loopholes are not filled, then what would we expect this digital asset to perform.

Let us discuss these issues in detail, so we can see right through the problems that are acting as barriers to the most admired cryptocurrency.

Bitcoin Got Some Serious Scalability Issues

I won’t take you down the ocean to discuss its technical details, but Bitcoin got some serious scalability issues. The rudimentary technology behind blockchain of BTC, restricts the total information which can be carried in every block to 1 MB of data. This restriction enables for a maximum network capacity of around 3 transactions per seconds.

In simple terms, the more Bitcoin buy and sell transactions take place, the network will see more tough times keeping up, which will lead to vital processing delays. For contrasting, Visa network has capability of carrying around 2000 transactions per second.

So if Bitcoin is serious about attaining a broader scale, it has to act on it now. There are numerous notions on the table, but the ultimate long term solution will remain foggy.

Bitcoin Is Evading Taxes

Under the present law, Internal Revenue Service considers Bitcoin and other virtual currencies to be “intangible property,” that means they’re under the contingent upon capital gain taxes.

If folks purchase BTC, then sell it on profit, they are required to tell the tax difference to authorities. Even worse via currency vantage is that every time folks utilize it to purchase something through Bitcoin, it counts as a taxable event. For instance, purchasing a $5 worth of coffee with $4 worth of BTC, is subject to a capital gain tax of $1.

Bitcoin Got a Notoriety For Its Criminal Utility

Bitcoin, particularly for its initial days, got notoriety for its utility on Dark Web, buying illegitimate products like drugs and weapons, money-laundering operations. And this makes sense because truly incognito payment source, BTC became the initial choice to folks who are into illegitimate weapons, purchase drugs, you name the activity.

And to be very honest, since it is an incognito source of payment, it’ll be tough, if it isn’t impossible, to entirely deal with the issue. 

Being an anonymous source of transaction is among affirmative aspects of BTC, but it also opens the gates to enter the illicit utility.

Bitcoin Security Is Still a Big Concern

Security measures persists that makes it digitally impossible for the hackers to snatch Bitcoin quickly, but exploitation is possible due to the complicated knowledge regarding the mechanism of Bitcoin and might need extra effort on part of the user.

While true BTC fans do not mind making its security more robust, it is an instance of ease of utilization challenge. And with a few BTC wallets, there’s a threat for the crowned currency being stolen.

Bitcoin Isn’t Widespreadly Adopted as Folks Think

There are several retailers, especially online, via which the clients are allowed to transact through Bitcoin, but the dominant currency is nowhere close to being broadly adopted.

If a prominent payment processing organization such as Square, enables the retailers to utilize their hardware to commence accepting payment in Bitcoin easily, it would truly be groundbreaking for mainstream Bitcoin acceptance.

Bitcoin Still Lacks The Quality of Being User-Friendly

It has become too simple to purchase, sell and utilize BTC over previous years. Presently, but it still hasn’t become sufficiently user-friendly to motivate mainstream acceptance.

As of now, if some folk want to purchase BTC, they need to access Bitcoin supported crypto exchanges like Coinbase, link an account, and in several instances, wait numerous days for the clearance of the transaction.

The stepping of Square and similar companies into the Bitcoin game has the potential of fixing the issue. In short, if BTC could be bought via an application that a myriad of folks worldwide are utilizing anyway, such as Square Cash, with just a click of a button, it can lure much less tech-savvy clients interested in the virtual currency universe.

Bitcoin Is Too Volatile

Since the commencement of Bitcoin, it has remained astoundingly volatile. If you do not believe this, go see its chart for yourself. If it had traded at levels of $66,000 it had slipped down to the levels below $35,000 too. The pattern regarding volatility has remained the same.

Let’s understand this with a real-world example. If I am going for a vacation holding Bitcoin worth $100,000, then I must keep in mind that upon reaching the destination, it can fluctuate prominently, both negatively and positively, with no certainty.

Which Issues Has Been Resolved To This Date?

Since Bitcoin has surfaced as the peer to peer payment network, it has been well-liked by the folks. However, it has aforementioned issues which still need to be fixed.

As it is the largest cryptocurrency in the market with major dominance, folks will undoubtedly make use of the asset at any cost.

Anyway, Bitcoin was the first generation in cryptocurrency sector, and entered with these bugs. But after the entry of other currencies like ETH, XRP, Cardano and many other digital assets, several of these issues have been resolved.

Scalability issues have been resolved by XRP, as it can do 1500 transactions per second, and has a transaction speed of 3-5 seconds in addition.

Ethereum is the second generation of cryptocurrencies, and allows the folks to interact directly virtually by enabling apps to persist without any central organization or servers, and then there are NFTs too, which I don’t think needs anything to explain. Also, Ethereum is among the most user-friendly cryptocurrencies today.

What Should We Do About The Issues?

In truth, issues are part of everything we can think of, in this case, cryptocurrencies. There will always be some issue even after making a fix, the thing is, how fast those issues can be resolved, Matters.