It’s been more than a decade since Bitcoin was introduced, and its existence has helped people shift from traditional currencies to digital currencies. Still, there is a long way that digital currencies have to go and struggle. As of now, digital currencies are highly in trend and have become a great alternative to traditional currencies. Even though digital currencies have made our life simpler, there are still many challenges and risks that people are facing in adopting bitcoin currency. You can start trading bitcoin by learning its rules from jt.org
Let us learn about bitcoin currency and then about challenges that users are facing.
What is Bitcoin?
Bitcoin is a decentralized digital currency created by an individual or a group of individuals known as Satoshi Nakamoto. In 2008, Satoshi released a white paper introducing digital currency, bitcoin, as an electronic cash system that eliminates central authorities. At the time of 2009, during the financial crisis, bitcoin was released when people distrusted traditional currencies. Unlike traditional currencies, bitcoin eliminates government or financial institutions’ need to complete bitcoin transactions and doesn’t require anyone’s approval.
The bitcoin network offers some top-notch benefits to its users, including transparency, user anonymity, minimal cost transactions, and more. The Bitcoin network maintains user anonymity by not necessitating users to share their sensitive personal information while using bitcoin wallets. Bitcoin wallets are the digital wallets that store digital tokens and easily send and receive bitcoin. Despite knowing the benefits of bitcoin, let us now focus on the challenges that the mainstream are facing and are restricting users from using it.
List of Challenges
Volatile market
Since bitcoin‘s invention, its market has been incredibly volatile. Even after a decade ago, its volatility isn’t slow, and there are wild fluctuations in the price of bitcoin. The bitcoin network has become highly popular in the past few years, and because of its fixed supply, users expect to have a volatile market. Investors who have invested in bitcoin expect its price to rise, but there are only a few times when its value has turned out to be awesome, and people have benefitted from investing in it.
The mainstream isn’t adopting bitcoin as a commodity and a currency because there is no stability in the bitcoin market. Bitcoin still makes a risky investment, and only a few users are risking their money. Despite its volatile market, users can make investments only when they are updating themselves about bitcoin trends and current news.
Worldwide acceptance
During 2017, bitcoin’s price reached heights, and it was the first time when its price was at its peak. This was when many retailers and companies entered into bitcoin market and started accepting bitcoin as a medium of exchange. Even when many retailers accepted bitcoin, it is still not close to being accepted widely. The tech-savvy companies are still not using or making bitcoin wallet applications and are restricting the developers from creating wallet applications. In the future, if tech-savvy companies started paying attention to bitcoin, it could be a game-changer for bitcoin, and it will become beneficial for bitcoin to enter into the mainstream.
Possibility for theft
Bitcoin is a digital currency, and the funds are transferred over the internet. There are many security measures that exist to make the bitcoin network impossible to hack or steal, but the cybercriminals have learned about the working of the bitcoin network. Some bitcoin enthusiasts don’t take security measures too seriously, but this is the main challenge that bitcoin users face.
Even though bitcoin wallets secure, there are still many possibilities that cybercriminals attack your wallets. There are always prying eyes on your wallets, and they are waiting for users to set weak passwords or don’t implement security features, and they try to hack your wallets.
Tax issues
Digital currencies are intangible assets that are subject to capital gain taxes. People consider that bitcoin is a digital currency. Therefore it won’t be taxable, but in reality, even if you pay for coffee in bitcoin, there is a potential tax that users need to pay. Bitcoin and other cryptocurrencies are taxable income, but there isn’t an issue using bitcoin for day-to-day activities.