A number of experts explains why Bitcoin did not change the world yet. However, the director of the Coin Center still sees the green light for Bitcoin. Will competitors outperform the creation of Satoshi Nakamoto?
22 November, AtoZForex – Just a few years ago, Bitcoin supporters were promoting its potential to change the financial sector. Yet, Bitcoin is still not getting close to being a mainstream technology.
Why Bitcoin did not change the world yet?
Currently, as investors have put more than a billion dollars into Bitcoin startups, no significant influence on the financial industry is noted. Most of the people still associate Bitcoin with illegal transactions and financial fraud.
The Bitcoin network has experienced some troubles due to the dysfunctional culture. However, the biggest problem of Bitcoin is that it does not solve any problems average people have. The market experts see multiple reasons why Bitcoin did not change the world yet.
Bitcoin is too difficult to use?
Bitcoin backers have always referred to the early internet. The internet has democratized publishing, providing an access for free publication. Bitcoin supporters forecasted that the cryptocurrency would do something alike in the financial sector. Prior to Bitcoin, sending someone an electronic payment required a bank to serve as an intermediary. These days, Bitcoin utilizes mathematics to safeguard transactions.
Only one problem is present: Bitcoin was too difficult for the normal person to understand and use. Thus, Bitcoin holders were always risking their coins. However, Bitcoin supporters say that it is only matter of time, and people will get used to this.
Investors’ appetite for Bitcoin diminished
Back in 2013, investors’ appetite for Bitcoin rose, and a number of venture capitalists have invested funds in Bitcoin startups. Some if these startups were aimed at creating Bitcoin applications.
In 2016, the inflow of funds into Bitcoin business has slowed down. When in 2013, almost $1 billion was invested, 2016 figures show an investment of nearly $400, 000 million.
Bitcoin constitutional crisis
Last year, the Bitcoin community was going through a series of controversy. Satoshi Nakamoto, Bitcoin’s creator, has initially planned that the digital currency will process a few thousand transactions per hour. This volume was acceptable in the very beginning of the Bitcoin. However, now this figures are out of the reach.
On one hand, boosting the capacity is not difficult from the technical perspective. On the other hand, the proposal to advance the capacity met a wave of resistance from Bitcoin traditionalists. They claimed that increasing the throughput would boost the amount of computing power required. Eventually, they say, the large companies will get stronger, diminishing the competitiveness levels.
Bitcoin competitors enjoy advantages
Moreover, analysts see that Bitcoin’s problem now is more cultural, rather than technological. Eli Dourado, a Bitcoin expert at the Mercatus Center at George Mason University, has stated:
“I think of the Bitcoin community as very political and ideological.”
Currently, there is a big gap in Bitcoin’s technical community. Some people do not want any changes in the software of the digital currency. In addition, there are other cryptocurrency companies, such as Ethereum. Ethereum enjoys larger capabilities that Bitcoin. It allows users to execute sophisticated financial transactions or so-called “smart contracts.”
Bitcoin still can become popular
Jerry Brito, the executive director of the Coin Center states that Bitcoin can still recover and become popular. He believes that Bitcoin could provide the base for a new generation of services to transfer money abroad.
Moreover, there are some startups trying to utilize Bitcoin to make micropayments.
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