Bitcoin is one of its own kind. It's the world's first cryptocurrency. Also, the very first currency that was criticized for the way it worked, and well, still works. It has firmly stood the test of time where a number of different organizations mocked and accused the currency of its "illegal" way of carrying out operations. To name a few, here are some of the statements quoted by the 'experts'.
"From what we can identify, the only reason today to buy or sell bitcoin is to make money, which is the very definition of speculation and the very definition of a bubble"
by Tidjane Thiam, CEO of Credit Suisse Groupe
"Avoid bitcoin like the plague. Did I make myself clear?"
by Jack Bogle, founder of Vanguard Group Inc.
"The developers of Bitcoin are trying to show that money can be successfully privatized.They will fail, because money that is not issued by governments is always doomed to failure. Money is inevitably a tool of the state."
by Edward Hadas, Economics Editor for Reuters Breakingviews, for NYTimes.com.
Also, there are tons of people who have an alternate opinion on this topic. Now, the reason for my hatred towards Bitcoin is not because I missed the ride, well, a part of it is A YES, but what I am going to discuss with you are the real-life practical problems associated with the use of Bitcoin which I am sure you will eventually agree at the end of this article.
1. Bitcoin is too slow.
If you were lucky enough to spare a thought of buying Bitcoin worth just $10 way back in 2010, transferring it from one wallet to another was relatively quite fast and efficient. It was just a matter of a few minutes (5-10). No wonder a poor chap once bought a pizza worth $25 for 10,000 BTC. So, yes, it actually had a practical usage, i.e. as a mode of payment.
But now that we have grown more impatient with the emergence of fast pace lifestyles, even 5-10 minutes to have our pizza order confirmed seems quite long. Apart from that, it now takes even more time to transfer Bitcoin from one wallet to another, roughly more than an hour for 7 confirmations. In the meantime, I would just eat my pizza, get another one packed and complete a whole episode of Game of Thrones. So now, the practical use i.e. mode of payment for bitcoin seems a bit stretchy, just like the Mozzarella cheese.
Ironically, the reason for these long confirmation hours of Bitcoin Transactions is credited to its success. As the coin got popular, more and more people started transacting Bitcoins, thus leading to scalability issue for Bitcoin blockchain. The participants of Bitcoin blockchain are now finding it difficult to keep up with such a high number of transaction on its network. Thus, increasing the time, and well, fees too.
2. Transaction Fees are costly.
A comparison between the transaction fees of Bitcoin in 2010 and 2017 can be a major blow to the Bitcoin enthusiasts. Earlier, it used to cost just some few cents to transfer your bitcoins to another wallet, but as its users and popularity grew along with the number of transaction shooting up to 300,000 per day, the transaction fees also increased to $5. Recently, a spike in Bitcoin blockchain network increased the transaction fees up to $26.
But apart from this, there is something fishier, or let's just say, interesting about the transaction mechanism. It's a priority-based system. The higher the fee one includes with his overall transaction, the more priority he gets in the blockchain network, and the sooner it gets processed and confirmed. Even if you include a relatively higher fee with the overall transaction, the time to get it confirmed within 30 minutes is still in doubt as the 'Blockchain Network' might get busy, thus leading to slowing or even jamming of the network.
Reasons Why I would love to buy more BITCOIN
So yes, I do dislike Bitcoin (to some extent), but not the technology behind it. The idea of a blockchain payment system way back in 2010 gave an elbow room for many great minds to revolutionize the old cross-border payment system that is still being used today. And because of that, today, we have been gifted with some of the amazing creations of Blockchain Technology in the form of coins like Ripple (XRP), IOTA, Stellar Lumens, Ethereum and many more, offering no or little transaction fee and fast transaction time.
But apart from all these negative or let's just say, critical analysis of Bitcoin, I still have a love-hate relationship with it. And the reason is interesting. Even though I feel and believe that Bitcoin now has no practical day to day use, it does have value-based storage:
"In the business of antiques, the values of old shrouds or clothes of our great-great ancestors are considered to be worth of millions and billions of USD. These clothes or textiles are old, stinky and might be under fungus attack. But still, they have got a huge value in the market without any practical usage (don't tell me you would want to wear one, something as old and stinky like that). The reason is - they hold value. People consider it as something ancient, a reflection of humanity's growth in the medieval period. On the contrary, the modern human has developed new synthetic polymeric fabrics with super finish technology that are much comfortable and durable than those old shrouds but its market value is still just a couple of dollars. It has a practical usage, just like our Altcoins."
The story of Bitcoins and the other Altcoins is something just like that. Bitcoin is the only one of its kind. No matter how costly or slow it is, people will definitely buy it because of the value that it stores in itself. In a way, Bitcoin is the USP of the crypto market and without it, the marketing of attracting newcomers in the crypto market (which is essentially very important for the growth) is very difficult. If Bitcoin ever collapses, it always sends out a negative signal out in the market, which in turn makes a situation of FUD (Fear of Uncertainty and Doubt). Hence, even if Bitcoin doesn't store any 'intrinsic value', it does store something bigger than that, and that is its influencing power.
Hope you liked my article. If you have any suggestions or your own point of view, let me know that in the comment section below. Would love to discuss on that.