Hey i’m daniel and today we’re talking about the five biggest problems with bitcoin and it’s not that it permanently turned on the red theme on my robin hood because i use block fi like daniel you can also start to use block five today but these problems raise some serious ethical and political concerns with the future of bitcoin but if you’re a user or an investor or a bystander or a grandparent of some punk.
who called you a boomer and told you to google what bitcoin even is this article is going to be extremely helpful. because these are problems you have to know about bitcoin because they completely undermine what makes bitcoin so popular in the first place. can bitcoin solve all these problems i don’t think so is that a problem yes is there an alternative that even adequately resolves the problems that we’re seeing with bitcoin right now not that i know of is bitcoin still worth it why am i asking all these questions. let’s find out yes bitcoin is valuable yes it is real but just like a slab of gold you probably can’t use it to pay for your starbucks drink world problems and now that i think about it they probably would take a slab of gold. but you know what i mean the point is bitcoin is too slow it takes a few minutes up to even a few hours for a single bitcoin transaction to process the network itself can only handle five transactions per second whereas visa can do 65000 transactions per second and that’s because every transaction needs to be run by every single node to verify.
it’s impossible to verify millions of transactions and retain the same amount of security on every single transaction without having millions of nodes. all verifying each and every one now there is a way to solve this called the lightning network. this would allow two sides of a transaction to open up a channel and essentially act like a group chat and they would make that transaction completely independent of the bitcoin network but still backed by the same technology like smart contracts but that relies on bitcoin still being cheaper quicker and more efficient and several other upgrades that we just don’t have yet for the lightning network to even run.
so we’re not there yet with bitcoin anyone can create any amount of accounts within the system whenever they want and some people see this as a great benefit to bitcoin because it allows for the anonymity but this also poses a huge problem with the ability to create an infinite amount of accounts there’s no accountability within the system of bitcoin someone could scam people out of millions of dollars and then create hundreds or thousands of separate accounts and equally diversify those bitcoin across those thousand accounts making them essentially untraceable and yes some people see this anonymity as a great strength to crypto but for it to become a global currency most think that some level of accountability has to be saved this is how it’s always been in history there’s always been accountability for financial transactions.
so that you can stop people who are doing really bad things and while it’s not guaranteed to become chaos if there is no anonymity we just haven’t seen it the other way around and it’s very difficult to predict what might happen if anyone could potentially get away with anything and this is actually already a really big problem in the cryptocurrency space there are tons of altcoins that are just built up as scams where people pump the coin up and then take the money and run leaving all of the investors with literally nothing to show for and yes this happens with real money too but when we’re talking about 32 million dollars usually the thieves get caught but with defy 100 the creators literally posted about it on their website for everyone to see because they knew they couldn’t get caught according to bitcoin.com.
almost 10 million dollars is lost in bitcoin scams every single day and as bitcoin becomes more and more widely adopted we can only expect this number to go up but there could be an even bigger issue leading bitcoin to become unusable bitcoin is using way too much energy currently it’s using about the same amount as the country of sweden not that i would expect anyone to know like how much electricity sweden uses a better way to see this is the cost per transaction which is actually enough electricity to fuel a u.s household for over two months just to verify your pizza transaction but even for those not concerned about the ecological impacts this is a huge problem because it causes the transaction fees for bitcoin to be way too high.
if you want to go buy your groceries it’s going to cost you about seven dollars to even use bitcoin in the first place and that’s only because bitcoin is low right now at its peak it used to cost 62 dollars per transaction imagine going to the grocery store trying to pay with bitcoin and the transaction costing you more than the actual groceries that you’re buying and with this trend continuing it’s only going to cost more and more every single transaction and this isn’t really something that we can fix if we want bitcoin to be as secure and verifiable as it is because all of these different computers need to spend all of that electricity just to validate your grocery purchase and the last problem is that even if people did want to pay 50 or even a hundred dollars for every single bitcoin transaction most probably couldn’t because for most people using a digital wallet isn’t as easy as using cash or credit cards for most people the process of using bitcoin or storing it is extremely complex and for those that do understand it even a little it seems like they’re walking around with a huge sack full of cash that they could at any time lose or burn or just sit on their flash drive and lose it all this is the reason why most people prefer to keep their cash in a bank account rather than something like their mattress or hidden under one of their floorboards.
which i definitely don’t it’s because they want the bank to act as a measure of security and convenience for their cash and currently for bitcoin. it’s a huge issue and since this is already done so well with cash it makes a huge barrier for a lot of people to switch from using cash to bitcoin like if i know that my checking account is fdic insured up to a million dollars. why would i risk holding that cash under my floorboards but that being said bitcoin is still a huge player in the game every single day. people are creating new ways and solving all of these problems in a way that retains bitcoin’s uniqueness and makes it a huge player in the future global economy like just recently there was a new change announced to the bitcoin network it’s going to take into effect later. this year and it’s a mutation of bitcoin that makes it way more secure way faster and it’s actually a pretty big deal if you want to read that article make sure you subscribe so you don’t miss it it’s coming out real soon i’m sure you’ll like it but thanks so much for visiting this website