What is limiting the adoption of Bitcoin? Read through this article to find those challenges that are limiting its adoption.
History has many investments that make news from time to time due to rapid price increases. Bitcoin is the latest news leaving even investors asking what it is and if they should be buying some. Bitcoin is an unregulated cryptocurrency that emerged in 2009. It uses cryptography for transaction security and control of the creation of other units, and verification of asset transfers. Bitcoin is the most popular cryptocurrency. Thousands of other cryptocurrencies have emerged since Bitcoin, and many have died.
Bitcoin uses blockchain technology which remains a buzzword in the tech world. Many experts believe that blockchain will revolutionize the financial sectors, including banks, real estate, healthcare, and law.
Much has changed for Bitcoin and cryptocurrency over the last few years, with growing awareness among investors, regulators, and currency traders. Investors are particularly interested in promoting Bitcoin trading due to the expected market growth and profit potential. The acceptance remains small, with one El Salvador accepting it as a legal tender and China banning crypto trading due to its volatility. PayPal announced to be accepting payments inform of Bitcoin transactions. Nevertheless, using Bitcoin as a digital currency is suffering various limitations. The primary limitations are:
The value of Bitcoin has grown tremendously since its launch but remains unstable due to its volatility. For instance, the value of Bitcoin in October 2021 was approximately $60000, which went down to $37000 in January 2022, although it is recovering steadily. Experts predict that Bitcoin’s value will eventually hit the $100000 mark. This trend shows how unstable its value can be.
Bitcoin’s value routinely changes by up to 3%, which can be substantial in a year. The exchange range between the US dollar and the Euro has a daily change of less than 1% and less than 3% monthly. You can see that the two currencies are different as Bitcoin can go down too hard. The instability and high volatility of Bitcoin may make it hard to adopt it due to the fear that its value may drop or rise significantly.
Despite the volatile nature of Bitcoin, it still stands as an investment risk worth taking. Apart from Bitcoin, Ethereum is also fast-growing and comes second to Bitcoin. You can try your investment in Ethereum, Bitcoin and other cryptocurrencies through bitcoin-profitapp.com.
Bitcoin and other cryptocurrencies use blockchain technology, and nobody regulates Bitcoin as it gives financial freedom to people. Blockchain technology has an anonymous feature that has attracted experts, legit investors, and criminals. For instance, the US government has seized over $3.6 billion in cryptocurrency linked to criminal activities. Many criminals and terrorists will tend to use Bitcoin because it is decentralized, and no one can know your identity.
While some use this blockchain feature to safeguard their assets, others might use it with the intention of crime. With the likelihood of being linked to crime, it might be hard for many governments to adopt it as a legal tender until there is a way to regulate the transactions.
High Energy Consumption
The process of mining a single Bitcoin uses electricity. The method uses high electricity due to the power of the computers that miners use to solve complex mathematical equations. And this makes it less friendly to the environment. To keep the systems alive will require computational power, which might not be feasible for many individuals or governments.
Because of Bitcoin’s drawbacks, many people invest in it, not as an everyday medium of transaction but as a long-term investment. Reports from experts show there is a future ahead for Bitcoin and other cryptocurrencies, and one might earn well from it if they invest now.