Do you know why the Bitcoin has not yet been able to overthrow fiat currencies? The truth is that despite the hype and mania surrounding the Bitcoin and its blockchain technology, investors are faced with some big challenges when it comes to using this crypto asset.
The Bitcoin, in spite of all its advantages and charm, has not become a universally-accepted method of payment for goods or services. So, what are the main roadblocks that have come about in the mainstream adoption of this cryptocurrency?
1. To start with, the Bitcoin is very easy to sell or buy but it is not yet been adopted by one and all. This indicates that using this crypto asset is still perhaps not that user-friendly in the real sense of the term. To buy and sell the Bitcoins, you must create an account in cryptocurrency exchanges like Kraken or Coinbase.
You have to connect this account to a credit card or checking account, and then wait for the transactions to get approved. So, when it comes to buying something online, using traditional payment methods appears to be more convenient.
2. Another big hurdle in mainstream adoption of the Bitcoin or any other crypto coin for that matter is the price volatility. The Bitcoin price has been experiencing ups and downs ever since the beginning and the trend has not changed.
However, the invention of automated bitcoin trading bots like bitcoin revolution is contributing to the increase of bitcoin trade as even an amateur trader is able to trade like a pro using these bots. Speculators who are optimistic about price rise invest in the Bitcoins but it is not becoming as popular as one would expect it to be. The risks are too great to disregard and it is imperative that the prices stabilize before the Bitcoin can become popular.
3. Acceptance of the Bitcoin amongst retailers is happening, albeit slowly. While there are many big retailers like Overstock.com that are accepting online payments in Bitcoins, many companies have still not opened its doors to the Bitcoin. It is necessary for large payment processing companies like Square to step in and enable retail outlets to use their hardware that will make Bitcoin acceptance simpler.
4. The truth is that there is always chance of a theft even though security is robust because of the blockchain technology. Users are still not clear about how Bitcoin works. The real enthusiasts may take additional security precautions but the regular users may be ignorant. Since you have wallets for storing Bitcoins online there is always the possibility of scams and thefts. Incidents of large-scale thefts have happened earlier and they are likely to recur.
5. The Bitcoin had been misused in the early stages by criminals for money-laundering activities in the Dark Web, and the common perception is that it still is used for illicit drug and weapons purchases.
6. Under existing laws the Bitcoin and other crypto assets are held as “intangible property” by the International Revenue Service. If you purchase the crypto coins and sell these at a profit, you are expected to report this difference in your tax submission. This means that you have to maintain a record of all these transactions to be on the right side of the law. This works as a deterrent and people would rather stick to the fiat currency.
7. Finally, Bitcoin is not really scalable and the blockchain restricts the amount of data that can be contained in a block. So, there can be only 3 transactions in a second. To ensure that more trades can happen smoothly, the network will need to be more scalable to enable more transactions.