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7 Biggest Challenges Bitcoin is Facing Today

Challenges For Bitcoin

Bitcoin indeed has been around for a long time now, but still, the digital currency has a long way to go. Among all the digital currencies, Bitcoin is the one that has the most value. That is why people want to know more about Bitcoin trading. It has many benefits and is said to be the future; that’s why many people have been searching “how do I buy Bitcoin” or “how do I start investing in Bitcoin”.

However, what most people ignore before starting to invest is looking upon some of Bitcoin’s challenges. That is why we bring you this article to make you aware of all the challenges Bitcoin has to face today.

Scalability:

The scalability problem of Bitcoin means that it has a limited capability of holding a huge amount of data on its platform. Each block in it 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 more time it will take, even if you choose the best place to buy it. The rate at which the transaction takes place is still the same. It is crucial for any network to be able to handle the increase in the number of transactions.

Environmental Concerns:

Another huge challenge that Bitcoin faces are excessive energy consumption for small transactions. When you search for “how do I buy bitcoin,” you get straight answers to how to invest in Bitcoin, but you aren’t aware of how transactions are being carried out. It is a decentralized currency that means that it 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’s problems for the transaction to go through. They get rewarded a small fraction of the Bitcoin traded for it. The mining equipment consumes a lot of electricity, due to which its electricity usage has increased significantly. Also, Bitcoin has an average of 549.74 kgCO2 of carbon footprint, which means 912624 hours of watching YouTube.

 

Difficult to carry out Transactions:

The transaction process is not simple, even if you choose one of the best places to buy Bitcoin. Carrying out transactions is quite hard, especially for not so tech-savvy people. 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 get the growth it deserves; it first needs to be easy to access because Bitcoin lacks interoperability.

Tax issues:

If you search for “how do I buy bitcoin, “make sure you also research “how should I do my taxes when I carry out a transaction through Bitcoin.” There aren’t proper rules set regarding its 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 would have to report the difference when doing your taxes. Not only that, every time you carry out a transaction, you would have to report the difference in the amount of purchase and the amount that cost you to buy that Bitcoin which can get hectic.

Dealing with 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 & also has a history of being part of money laundering schemes as well. These activities have given Bitcoin a bad reputation among the general 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.

Unstable Rates:

Another big issue that it has to face is its fluctuating rates. People never know what to expect. The rise of the Bitcoin rate can be beneficial for investors. However, if Bitcoin wants to get widespread acceptance, it has to be bit stable. Stability is crucial for it to become a reliable source of value. The rapid change in the currency’s value will take away 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 disappointment & sunk cost. For Bitcoin to be regulated widely, it needs to act responsibly and be held accountable.

 

Conclusion

Bitcoin is still a new concept, and there are a lot of challenges that it has to overcome for its mainstream acceptance. People get interested in investing in Bitcoin and search about its trends & features; however, they should be aware that Bitcoin still has a long way to go for it to be accepted as a form of currency.

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