Critical Challenges to Bitcoin Adoption| MENAFN.COM

Thursday, 09 February 2023 05:40 GMT

Critical Challenges to Bitcoin Adoption

(MENAFN- CCP Marketing)

Bitcoin has attracted over 109 million users. For an innovation that is only about 13 years old, some would consider it a significant success. Today, Bitcoin tops the list of cryptocurrencies. Its use and impacts are still growing, and some crypto experts believe it has an even brighter future. But despite all the successes of Bitcoin, there are still many factors preventing its widespread adoption.

Before delving into the critical challenges to Bitcoin adoption, it is vital to appreciate the positive features of this cryptocurrency. Besides being a digital currency, Bitcoin is also a unique investment asset. You can become a Bitcoin investor even without prior experience. Visit the Bitcoin code to start bitcoin trading hassle-free.

While many factors may prevent Bitcoin adoption, this article will focus on three that are more relevant. 

  • Bitcoin’s price volatility
  • Lack of regulation
  • Complexity of Bitcoin

Bitcoin’s Price Volatility

One of the significant challenges to Bitcoin’s adoption is its high price volatility. Bitcoin’s price keeps changing every time. You cannot be sure of the price tomorrow or even after several hours. For example, Bitcoin has lost over 65% of its value since November 2021. Such high volatility may appeal to big investors but is a discouraging factor for many ordinary people.

The high volatility of Bitcoin has kept many institutional investors from embracing it. They fear the high risk of losing their investments if the price drop unexpectedly. When prices of Bitcoin drop with such high uncertainty and unpredictability, many investors are more reluctant to put in their money because of the fear of losing.

Although Bitcoin is not so different from other investment assets like gold, investors are more concerned about the risk of the price dropping significantly. Gold and other assets tend to have more stability. Hence, it attracts more investor confidence. Essentially, investors perceive Bitcoin as an unreliable store of value because of this high volatility.

Lack of Regulation

Bitcoin is unregulated. And this means that governments cannot control or manage it. For some investors, this is problematic. The government rules and regulates how players operate in the conventional centralized financial system. For example, the government can control the amount of interest commercial banks will charge the customers.

In a regulated environment, investors feel a sense of order and security. Banks and other players cannot operate as they wish because of the regulations. The unregulated Bitcoin environment lacks such order and security. And this creates some loopholes that could threaten Bitcoin users. For example, some entities may be reluctant to use Bitcoin because they will have no one to run to should Bitcoin crash.

While there are efforts to regulate Bitcoin and other cryptocurrencies across different countries, people might not feel their impact soon. Bitcoin uses blockchain technology that is impossible for governments or any single entity to control. And this may discourage adoption from those who fear an unregulated system.

Complexity of Bitcoin

While using Bitcoin may not be difficult for tech-savvy people, we cannot say the same about the many other people who are not tech-savvy. You need to set up a Bitcoin wallet and understand its use. And this may not be easy for everyone. Many people don’t even know how to use a computer or the internet well. 

Mining Bitcoin and operating a Bitcoin node are even more complex and beyond the capacity of most ordinary people. Mining Bitcoin entails solving complicated cryptographic puzzles, while running a node requires understanding how blockchain works. For those who lack such knowledge or skills, adopting Bitcoin is more complicated.

Parting Shot

Bitcoin is attracting more users over time. However, the adoption rate would be much higher if experts addressed some existing challenges.


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