Why Bitcoin might fail sooner or later
Every day we hear stories of people using Bitcoin to purchase more and more expensive items. In May 2010, two pizzas was purchased for 10,000 Bitcoins. In December 2013 a $103,000 Tesla was bought with Bitcoin. Later in March 2014, a Texas man bought a villa in Bali for 1,000 Bitcoins (approx $600,000 at the market valuation of that time). Many have now raised the question will Bitcoin be the future? Though there are many reasons to corroborate the fact that Bitcoin may well be the future of money, there are an equal number of arguments to state that Bitcoin will fail. Let’s today, look at the reasons why Bitcoin will fail.
Any asset to be classified as a currency should have stability and predictability in its price movements. A currency should not fluctuate wildly to every news that comes out. Even currencies that are weak and unstable too have a predictable ceiling and floor value. Once these ranges are breached, the currency becomes worthless. This was the case with Ecuador, Venezuela and El Salvador. All countries that had to abandon their own currency and adopt the US Dollar as their official currency. Price movements in excess of 5% overnight are not unheard of in the crypto world. Wealth stored in Bitcoin and other cryptos is a potential time bomb waiting to go off one fine day.
Easily stolen (and lost)
A person who has a bank account need not memorize their bank account number to do any transaction. Just presenting a valid ID proof can enable them to carry out transactions. If one loses their credit or debit card, they can always get a replacement and be able to access their funds. However, if one loses their bitcoin wallet the entire money disappears. A man from the UK had lost his digital wallet reportedly containing several million dollars worth Bitcoins. This should serve as a start reminder to all Bitcoin and crypto holders to hold on dearly to their digital crypto wallets.
The next threat, is of hackers. Crypto exchanges are constantly under attack from hackers. It was recently reported that hackers steal more than $280 million dollars per month from crypto transactions.
High energy consumption
One of the major criticisms against Bitcoin was that mining consumes a very high level of energy and is not sustainable in the long run. This had even prompted Elon Musk to state that Tesla would no longer be accepting Bitcoin as a payment means unless the concerns regarding energy consumption were addressed.
Bitcoin is preferred by criminals
Recently WazirX and its directors were issued a notice for alleged money laundering transactions conducted on the platform. The anonymity offered by Bitcoin serves as a huge benefit for those seeking to indulge in illegal and shady activities. There have been several instances of Bitcoins and other crypto currencies being used on the dark web for illedgal transactions. The law has come down heavily on these perpetrators. It is only a matter of time before the law takes over and shuts down Bitcoin for good.