2017 will always be remembered as the year the cryptocurrency industry exploded into the mainstream and showed us all just how big, it potentially can become. The crypto market as a whole has been able to expand by over 1000% since January, and when you bring Bitcoin in particular into the equation, the whole equation changes to something else!
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The king of all cryptocurrency at its peak mid December traded at over $20,000! That’s compared to the less than $1000 value it began with in January. This massive multiplication in value might be great for anyone who has old Bitcoin holdings with them but it opened further new problems for potential users, and businesses, which spells trouble for the long-term viability of the Alpha crypto asset. Some of these problems include:
Inadvertent Centralization: Bitcoin which pioneered the cryptocurrency industry was created by its maker Satoshi Nakamoto to break free from the apparent problems the centralized fiat and traditional banking systems have come to suffer from. As Bitcoin prices sour ever higher, it becomes the exclusive forte of big time investors and industrial scale miners to either buy or mine it.
Volatility: The very short periods of time that pass before Bitcoin jumps in its price has made it a highly hoarded currency by those who own it. Although a lot of businesses from Microsoft to the local restaurant near you now accept it as a means of exchange for their goods and services, Bitcoin is seeing less and less usage from its holders who keep speculating it might yet again jump a few dozen percents before they could even walk out of the store or restaurant.
Slow Transactions: Bitcoin might have pioneered the fastest way of transferring value from one entity to another when it broke ground in 2009, but it has since become very much criticized for its rather slow transaction speed compared to other newer cryptocurrencies. It takes over 12 minutes for a single block to be created on the Bitcoin network which translates to longer periods before a transaction gets vetted and then added to the blockchain. Bitcoin’s usability has always been the big reason why it has become so wildly popular, but businesses now keep migrating away from it because it takes just too long before they could confirm the genuineness of their customers’ payments.
Inordinate Transaction Fees: The Bitcoin blockchain has been designed in such a way that miners can set their own fees for quickly verifying transactions. This has in turn created a big problem in its other core ideals, which is being the perfect means of sending micropayments all over the world. Anyone who wants their transactions to be quickly attended to, has to attach an attractive fee on it that will make the miners snap it up quickly. This sadly means that those sending micropayments now have to bear comparative or even higher amounts in fees than the actual amount of Bitcoin they are sending. And this has been one of the major reasons businesses keep migrating away from its use.
Bitcoin’s future is tied to its continued usage in everyday life and in the relevance people keep attaching to it. If it is serious about surviving and keeping itself ahead of the park, then it must be open to improvement rather than stay in its rather archaic original form. Bitcoin must not become complacent and take its present position the top of the pyramid for granted, lest it loses out to newer and more user friendly outfits, which is the same thing it accomplished when it caused an upset to the status quo when it came online in 2009.
