Challenges of Bitcoin and Blockchain Technology
There is no doubt that both Bitcoin and blockchain technologies seem to be making headlines every now and then. Unless you have been living under a rock, you must have heard about all the hype surrounding these innovations and how experts are claiming to revamp the traditional payment systems which countries are currently making use of at the moment.
However, it is important that despite their underlined benefits as pointed by experts over the years, these technologies seem to have some flaws. These have stifled their progress and acceptance by governments of various countries around the world. This post will be highlighting some of the issues facing Bitcoin and blockchain technology at the moment.
Scalability Issues
There is no doubting the fact that the idea behind the creation of bitcoin has been one of the most innovative among others. There has always been the problem of scalability as it tends to be limited on the number of transactions that are carried out within its network every minute. Today, we have bitcoincard which behaves as an electronic wallet helping you make secured transactions.
The continuous use of bitcoins as a means of blockchain transactions means that this problem will always affect the effectiveness of the latter. It may interest you to know that this limitation isn’t just with bitcoin as other cryptocurrencies are also having similar issues. This has led to problems such as increased cost of transactions and clogged mempools.
Security problems
Blockchain which belongs to the first generation, do have protocol layer security. However, it is fair to conclude that the Bitcoin platform still needs to be improved. In order for investors and participants to have more confidence in the system. For instance, transactions are irrevocable. This means transferring a particular amount to any wrong wallet can’t be reversed.
Although there has been a lot of hype about smart contracts, experts are claiming that the adopted security procedures are inadequate. In other words, they will hardly prevent any form of irregularity.
Legal Challenges
When blockchain and bitcoin technology entered the market a few years back, very few anticipated that they would have problems getting accepted by governments around the world. In reality, they are struggling to create an indelible impression to these governments. For instance, most governments see Bitcoin platform as a way of promoting fraud. According to them, no strict regulations have been put in place to ensure that transactions are checkmated.
Bitcoin has had a difficult time being accepted in many countries like China. For instance, in the month of December 2017, China’s central bank was able to formulate policies that would ban the use of bitcoins during transactions. Although this seems to be changing gradually, these technologies still need to improve further in order for governments to be convinced that they are really an upgrade from the former systems. Bitcoin’s acceptance will really have some positive effects on the entire cryptocurrency market.
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