Even if many countries have accepted bitcoin as a currency, are there any practical applications to it?
What happens if bitcoin is used as currency in our day to day life?
This is what most people think off that bitcoin could one day be currency and can be used to shop, pay online etc. But have we ever thought how the prices will be determined if stockists have to put a tag to the inventory?
Its highly impossible to achieve this with the ever changing price of bitcoin.
Other challenges that bitcoin could face as a currency.
Network transaction fee.
The network transaction fee is way too high to conduct small transactions say a $100 or even less.
For a transaction of $10, you end up paying up to $2 in transaction fees that’s around 20% which is way too much. As the transaction size increases, the fee gets negligible but that limits the buying capacity of an individual with bitcoin.
The delay in transactions.
With the network flooded with transactions every minute, it’s getting difficult for the transaction to confirm in a short time, this brings a lag and traders or miner confidence gets low on a transaction to complete. No business will like to wait for a transaction to finish but deliver the product in advance.
Fiat is a necessary element.
Crypto will never be able to replace fiat; however, there can be different approaches taken to determine the price, reduce the network fee and to make transactions quicker.
Approach to determine price.
Online shops or even shops which accept bitcoin can convert the dollar or fiat price to bitcoin price as per the market. But the business that accepts bitcoin will always have the risk of losing money if the bitcoin price falls. So I think it’s a no go for any business to accept bitcoin as a payment method, at least not sometime soon till this problem is solved.
Approach to reduce transaction fees.
This can be very well achieved if the miners agree at a lesser transaction fees. But why should a miner reduce the network fees, after all that is the only factor which miner makes bitcoins or money out of. If transaction fees are reduced or stopped, how will miners support bitcoin mining.
Approach to make transactions quicker.
This problem can be solved if all the miners decide to do so. This is an ongoing topic on the scaling debate. Once the scaling debate is resolved and the block size is increased the transactions will become lightning fast.
I would like to hear from you on this topic. Resteem and leave a comment. This could actually generate some good ideas to solve the problems and help the crypto community to keep believing in bitcoin and many entrepreneurs may get some ideas to solve major problems.
