The Problem Of Bitcoin And Cryptocurrency

CENTRALIZATION The anonymous creator of bitcoin Satoshi Nakomoto created bitcoin as a way of getting rid of the TradFi(traditional finance) i.e conventional banks and also to solve the problem of inequality. It seemed he was trying to emancipate people from the strong grip of banks but unfortunately it turned out that only a handful of people now mine bitcoin and only about 2% of the population are in control. With the level of fraud carried out by hackers and unequal number of participants in the bitcoin network, the intention of Satoshi Nakomoto did not succeed in translating into reality.

VOLATILITY Bitcoin and other cryptocurrencies also fluctuate in price and are highly volatile, meaning that one can lose his/her asset in a twinkle of an eye if they get into a project. In the blockchain industry, it is advised that you DYOR(do your own research) before venturing into cryptocurrencies.

USAGE FOR CRIMINAL ACTIVITIES Because of Bitcoin's decentralized nature, bitcoin has been used in committing a lot of illegal activities and fraud. For this reason, KYC techniques should be put in place, so that people cannot create numerous wallet addresses for the purpose of scamming.

ENERGY WASTE Mining of bitcoin requires high energy usage and has raised a lot of concerns as regards climate change, since mining runs on high computational power. Mining consumes more electricity than 159 countries.bitcoin mining pollutes the enviroment since Everyone seems to be after the block rewards.

PROBLEM OF 51% ATTACK There's also the problem of 51% attack, which means that if a country or group of people can actually gather upto 51% of the computational power they can actually change data on the bitcoin blockchain and bitcoin would have no integrity and the entire ecosystem will fail.

CODING VULNERABILITIES bugs have also been a very big issue in the bitcoin/crypto ecosystem for example a bug in the smart contract of ethereum led to the loss of about $30million worth of ethereum to hackers.

THE PROBLEM OF NEXT OF KIN has lingered for a while now , when the owner of a wallet dies the relatives cannot have access to their assets and it is lost forever. Quadriga exchange lost $145 million worth of crypto after its CEO suddenly died , since he stored the passcode in his cold wallet( a wallet that is not frequently used) and there was no backup so no one else knew the passcode.

Agbo Chidera Augstine. Blockchain content creator

#blockchain #blockchaincommunity #bitcoinnews #cryptocurrency