Bitcoin has always been the top-rated cryptocurrency. It is not only its value that makes it so prominent but also its market cap is reaching the skies. Being one of the most prominent cryptocurrencies, there are many reasons like currency’s value fluctuations that hinder people from going for it. Although people have seen only the good sides of the biggest digital currency bitcoin, today I will give some of the demerits as well that are becoming an impediment in adopting cryptocurrencies that often. If you are interested in bitcoin trading check the weird things you can buy with bitcoin.
- Due to the many governments making themselves out of this area, their reluctant behaviour has left its supporters as well as critics in alike possibilities of threat and related possibilities. Since there is no managerial body to back bitcoin and other digital currency, involving a government in its operation would result in its decentralized nature being compromised and also govt abandoning its power if backing such a currency. Even then bitcoin’s price has been majorly impacted by the taking of the US government via news etc. For example in the year 2017 when the security exchange commission forbade approval of the bitcoin-based products on the stock market, a huge value drop was encountered. Although there is no such power the government possesses to outlaw or criminalize bitcoin their action does possess the power to affect its value from a larger perspective. But many famous governments have been seen investing in this cryptocurrency.
- Exchange hack is another disadvantage of bitcoin albeit it has got nothing to do with bitcoin’s integrity. But any exchange hack happening would result in bitcoin’s market freaking out. But with time if exchanges become safer and protected this concern will no longer fear people. But no major threat is being posed since crypto recovery is made from such hacks. But beyond the investments the exchanges that are happening to make its network develop more to be stronger.
- Another such demerit is its illiquidity. Having a whopping market cap still makes investors worried about it. If its price drop is seen it is very unlikely that people are unable to work on it. But if there are a larger amount of people investing then concern becomes negligible.
- The next disadvantage that comes is volatility. Where on the one hand people are attracted due to this reason, on the other side many are hesitant for the same reason. Users that invest as per speculation are said to be gambling since bitcoin’s price has always been a lot unpredictable due to its volatile nature. While some say that its value will be in pennies, some say that it will cross even 500k dollars. But if more and more people opt for investing in this currency its price will have better stability in future.
- The last disadvantage is the industries that are not adopting bitcoin as a payment method. This is because of the fluctuations of the cryptocurrency. But this disadvantage can be overcome if there are larger adoption for the currency to make it an acknowledged payment method.
The Bottom Line
Many people who hear about cryptocurrency are unlikely to understand how it works. So, our endeavour is always to educate the crypto community to understand its working mechanism. The flaws I have mentioned in this article are easy to remove if you are also willing to invest in them. I am now confident that all of you will invest in this so that bitcoin becomes more stable and there is no need to frighten people with its uncertain nature.
