While Bitcoin exchanging has become the mantra for traders today there are still many challenges to its widespread adoption. Bitcoin trades continue to face many roadblocks and issues which have to be resolved. Just like any new disruptive technology, Bitcoin and its underlying blockchain technology has attracted its share of criticisms and detractors who are trying very hard to curtail its potential. So, even the Bitcoin which is a relatively new concept is not going to be immune to problems or to negative public opinion.
What are the issues facing the Bitcoin today?
- While the Bitcoin was meant to be a decentralized digital currency where funds could be transferred across borders without a centralized authority present, the altruistic system faced a lot of exploitations in the process. There is no longer an incentive run a Bitcoin node; powerful machines have now come about that have changed Bitcoin’s open nature. So, now Bitcoin mining is possible only by those who have the money to afford such specialized ASIC hardware.
- The Bitcoin was expected to resolve the issue of double-spending. Yet, there are many incidents of hacks and thefts even today. This digital asset has ended up attracting the wrong kind of people who are out there to exploit your weaknesses. There are illegal marketplaces and illicit activities undertaken by criminals. For instance, the Mt. Gox event has exposed the vulnerabilities of a Bitcoin exchange when huge losses were reported because of theft. This problem of “bad actors” can turn into a consumer protection problem. This is also why many countries are hesitant to adopt the Bitcoin.
- Security measures have existed to make sure Bitcoins cannot be stolen but unfortunate thefts have happened earlier, and can recur in the future. Now, bitcoin is traded using automated trading bots like bitcoin era which are constantly increasing the speed of trade. The true enthusiasts would not mind adopting some more stringent security measures but that might come in the way of its ease of use.
- According to existing laws the IRS regards the Bitcoin and others as “intangible property” and this makes them subject to taxes of capital gains. So, if you are buying Bitcoins and then selling these for an amount higher than what you had bought them for, you must report this difference in your tax statements.
- As many as 12% of 73 nations that have adopted regulatory actions on Bitcoin are either hostile or controversial. Some countries seem to be reacting too much to the Bitcoin exchanging phenomenon like India, while China speaks of hardship in the future with the government cracking down on Bitcoin operations. These show that most banking systems do not want to compete against the Bitcoin and they would rather prefer it go out of existence.
- Finally, Bitcoin exchanges are not well supported by most leading companies like Google which does not accept in-app payments in Bitcoin or Apple which bans users from sending Bitcoins through wallets in the App store. So, none of these big tech companies intend to compete with Bitcoins and prefer to have this currency out of their way.
These are some of the big issues facing Bitcoin exchanging and these are responsible for the average user’s reluctance to use Bitcoins.