All the advantages and disadvantages of bitcoin in one place...
In the previous article, Bitcoin - pros and cons (First part) I wrote about the favorable aspects of digital, ie. cryptocurrency, referring to bitcoin as the most famous cryptocurrency (currently)
In this article, I will try to critically review and mention the bad and negative aspects of digital currencies, especially bitcoin.
The first thing to emphasize is that bitcoin, as I mentioned, is a 2009 technology. For example, we will compare the Nokia 3110 that some of us remember, which is a model from that time in 2009 with, say, some of the latest Apple iPhone models. With both you can call someone and send an SMS. And that's about the end of the story for the first one!
I am aware that colleagues from the bitcoin community will defend their icebreaker and that is perfectly fine, bitcoin definitely deserves an honorable place among cryptocurrencies, because with it came blockchain technology and everything that is current now, and believe me, blockchain technology will change the world we know. We usually exaggerate things when we talk about the future and technology, but not on this topic.
Let's take a closer look at the facts and shortcomings of bitcoin and some other so-called ‘derivatives’ of bitcoin.
The first and most serious "flaw" of BTC is its anonymity. This will be said by EU councils, regulatory and legal bodies, etc ... all those who pass laws and allegedly care about making the world a better place to live. While, say, those of us who look at bitcoin and cryptocurrencies from a different perspective, crypto enthusiasts will say that this is actually its biggest advantage (I can almost completely agree with that) and that the basic idea of cryptocurrency is anonymity!
As soon as the anonymity of cryptocurrencies is mentioned ... they immediately start waving the alleged fight against non-existent terrorism, anti-money laundering laws, etc ... But those same people who speak out against cryptocurrencies forgot to tell us who the "anonymous" from the top are. US authorities or from the shadows ... who are directly behind the organization of a non-existent terrorist "attack" on the Empire State Buildings on September 9. 2001 in which 3,000 lives were lost.
The pinnacle of hypocrisy! We have already forgotten that!
Many have asked themselves what is the role of those at the top of the American political scene in general !? Later, the truth emerged that Al Qaeda and the Avant-garde shepherds who run after the sheep the same as 1000 years ago, have nothing to do with the attacks on the famous Pentagon and the Twin Towers in New York. I will not now mention the Federal System of American "Reserves" of the Fed and their money laundering machine, in which the IMF, World Bank, Bank for International Settlements and other "institutions" have been participating since 1946.
This can be widely written about, I will try to simplify it so that we all understand the potential threat to the general security of our families by government internal "terrorist attacks" on American soil and some other parts of the EU or, say, by NATO and the bombing of dozens of different countries with illicit chemicals, all in the last few decades, on the one hand. And on the other hand, how dangerous is it, for example, if bitcoin, ethereum, dash, monero, bitcoincash, etc ... are owned by certain groups of people or individuals. It is obvious who can do more damage to the human community.
Can cryptocurrencies be misused? Absolutely. Can cash be misused? Of course, this is done countless times more than with all cryptocurrencies combined. Even less than 3%
The media has a big role to play in spreading negative news about cryptocurrencies. Unfortunately, as a rule, negative news always sells better and spreads faster than positive news. The positive aspects of cryptocurrency are not talked about or very rarely, while some cases of abuse are highlighted and exaggerated. I'm not someone who does that, but the fact is, whether I wanted to agree on it or not, the black market and the black market "helped" and gave a higher market value to bitcoin, in the very beginning of 2010-13 Those times are behind us, bitcoin it is less and less used for illegal purposes and more and more work is being done on its legal legalization. And the solutions are close!
Bitcoin has its technical shortcomings. BTC was never even planned to be a payment alternative, or a replacement for cash! Only much later, as the number of producers grew, that is. miners, and investors, btc began to gain an ever-widening range of users and an ever-widening application.
It's no secret that the CIA owns 25% of the bitcoins produced! For what reason do they need it - I'll leave it to you to judge for yourself, keeping in mind his anonymity !? Anonymity is actually overemphasized, we can say that btc is actually pseudo anonymous ... Today, it is very easy to discover everything that, say, 2011 could not, and it concerns the anonymity of senders and recipients of bitcoin. Some other time about it!
There are so-called btc derivatives. what would be said in musical jargon; variations on the theme ... Same thing, just a little different. That is why it is said that almost all other bitcoin derivatives! Some of them really have total anonymity, such as dash, monero, btcdark, etc ...
We have to look at things from multiple angles! You will agree with me that, anything that regulatory bodies cannot tax and put into legal flows and legal frameworks, it simply will not be treated as an alternative to cash. The latest statements are in favor of an increasingly tolerant approach. The EU parliament said in June this year that cryptocurrencies could be used as an alternative to cash in some cases. If someone wants, I can send him the entire report from that session.
That trend will continue no doubt about it. Digitization has knocked on the big door in all business departments. Now it's time to digitize payments. Some say that all this will take a long time and that it will be hard, etc ... I am a supporter that changes will happen much faster than we think. We need less and less time to master some new technological innovations as a society.
Bitcoin, less and less, but some cryptocurrencies are just the perfect tool to use, and exchange "goods" in cases where you want to have complete privacy for what you are doing at the time.Not long ago was November 13, 2015 and the bloody massacre in Paris, which we have all already forgotten.It is a big question mark who was really behind this event !?
More than 350 people were injured, 130 of them dead. That terrorist attack was funded by bitcoin and it has been proven. Some suspect that the CIA was behind the attack. Today, it is much harder to do it in the same way, as in 2015, without the great risk of not being discovered, and those who do it know it!
A more serious drawback of Bitcoin is that most cryptocurrencies are tied to it and exchanged for Bitcoin as they are mined! And at the moment when btc falls and loses value, due to speculations of individuals, all other cryptocurrencies do the same ... they lose value, because they are tied to it. Something similar to the so-called. five baskets of currencies pegged to the U.S. dollar. It is jokingly said among us that "when the btc coughs, all other cryptocurrencies get the flu."
Another disadvantage of Bitcoin is its extremely limited series of 21 million coins - coins, which will be available only in 2124. Currently, slightly less than 17.2 million have been produced. of these 17.2 mil. 15 - 20% are permanently lost and out of use. Which is a drop in the ocean among FIAT currencies and with its quantity it cannot satisfy the now growing needs of the cryptocurrency market.
Although Bitcoin and all other digital currencies have eight decimals and can thus be used for small transactions - the figure of 17 million bitcoins that will realistically be in circulation in 2124 is too small a figure to meet the needs of the digital currency market. This lack of btc initially disqualifies it in the race for global use.
The third drawback of btc is that it is one of the most speculative cryptocurrencies in circulation. No wonder they call it btc - bubble (bitcoin-bubble) What do you mean? I will give just one example. In the winter of 2013, when the btc was worth $ 1242, three people, who together owned more than 60% of the btc in their possession, agreed and decided to put all their btcs up for sale in one day. I repeat, those three people (one Chinese and two Russians) had a total, just over 60% of the btc in their possession.
Under the law of supply and demand, of course, the price dropped from 1242 to below $ 750. Then others became afraid of melting their capital and started selling their bitcoins. Btc continued to fall slightly to $ 297-300 per unit. And of course then they buy it again, at a price of $ 300 and they make money again. Smaller investors lose money in that case!
You will often come across the following headlines and claims of individuals who have majority ownership of bitcoin in the media:
Since btc is extremely volatile, ie. unstable, because there is little in circulation, then we have such and similar statements of people who have majority ownership of bitcoin. Even today, these are three people, as in 2013, who have majority ownership over btc.
Those three people are: The first name you saw above, Bill Gates, Richard Branson, owner of Virgin Atlantic, and Michael S. Dell, owner of Dell Computers.
It is naive to believe that they care that our transactions are cheap and faster ... They are exclusively interested in profit. Hence such statements that the btc will grow indefinitely. Of course, the uneducated, when they see such statements, buy BTC and contribute to growth, and the majority owners significantly influence the price. There is no free market when it comes to bitcoin. For that reason, I do not recommend buying btc.
Another interesting situation is that the hardware industry, has never been in a major expansion, until last year. Namely, companies that produce graphics cards and other components that 'dig' btc, ethereum, etc ... Literally can not produce a sufficient number of graphics cards that the market is looking for. As long as there are 'diggers', the industry will make phenomenal money. If you want to 'dig' ethereum, btc or lightcoin ... you had to wait 6-9 months for the graphics cards to 'dig'
So, when you read in the media that btc will go to $ 10,000-15,000 and ether $ 1,000 etc. then remember that such statements are most often calculated for their profit, or faked by the owners of those industries and other influential individuals. Last year, it really happened that the btc went to 20,000 per unit, and then many rushed to buy it because I did not advise them ... You know how it ended. For that reason, I do not advise investors and friends to play with btc. Except in cases when it's a smart time to buy, and when you need to use the fall to make a smart profit. And for that there is an input timing and a real output timing, ie. closing positions - sales!
It is true that a large number of companies receive btc. However, there are those who stop it, just aware of its speculative role and high volatility. Another problem is that btc can't sell so easily! BTC is not realistically used to buy and exchange goods, or is used to a really negligible extent. Those firms that receive btc have largely limited the sale of their goods and services by a maximum of $ 100 in btc equivalent for the aforementioned volatility reasons.
It could be said that the market has matured, that it is ready and waiting for the appearance of the first serious stocks of stable cryptocurrency, with which to buy and create savings, instead of speculating on the price in the interest of minority earnings who know how to "outsmart". those who do not know enough about the matter and do not know when is the right time to sell and when to buy!
The fourth disadvantage of btc is the slow and limited processing of btc blockchain data. Roughly speaking, the blockchain serves as the processing and processing of data transmission, and transactions. Think of it as an operating system running cryptocurrencies. Like the Android operating system of most mobile phones.
Imagine that you have to wait in the supermarket for 10-60 minutes for the transaction to be verified, and processed, which is the case with btc. Would you use such a payment model? Of course not, regardless of all its benefits! Recently, a new layer was developed in the blockchain of btc, the so-called "lightning network" which in some way solved the problem of transaction processing speed, but despite that btc is less and less used in shopping.
Bitcoin blockchain is quite limited in the number of transactions that can be processed and processed. Btc blockchain can process 3-5 transactions per second. Compare that to Visa and MasterCard, which can process 65,000 transactions per second, and conclude how inferior btc is. For example, the blockchain of one of the newer digital currencies 2.0 from 2016. is able to process 120,000 transactions per second worldwide! Welcome to the 21st century!
The fifth problem of btc are classic scams! About 45% of btc transactions end in fraud. Customers in 45% of cases do not get their goods paid for by btc. The injured party does not have any legal mechanisms in such cases, there is no one to complain to! The system is simply decentralized, there is no regulatory body. In this case a big drawback! Why would anyone buy this way ?! They are left to themselves!
In a partially centralized approach (I will write on this topic) this problem is solved because there are so-called smart contracts, agloritham of a heartless machine that does not need people as auditors and controls in someone's selfish interest, most often!
For example, it works with one of the cryptocurrencies, it happens that you are not delivered goods, you have someone to complain to. Since the system is centralized, ie partially centralized in terms of smart contracts, coins are stored in the so-called. escrow wallet until both parties say they have agreed to the terms of trade and the goods received only then will the coins be delivered to the right address i.e. a real wallet, not before. There is no payment in advance, so we chase afterwards. Only when I see the goods and say, aha ... that's it, it corresponds to the description, the required quality and all of the above, I click and only then, my coins are transferred to the seller. The problem of online shopping is solved forever!
The sixth disadvantage is related to the mining system, ie. production. Namely, btc is now in the 70% phase and is practically completely unprofitable for miners with a lower budget! What it means? When 14.7 million solutions of the algorithm were found, btc entered the remaining 30% of production and this requires extremely high processing and resource power of the computer to make digging cost-effective. Today, the production of btc is practically unprofitable unless you do not have a few hundred thousand euros to invest in mining.
One could say something more about the shortcomings of the greatest bitcoin revolutionary, but this is more than enough! Maybe too much ... You'll think it's useless. I have already written about the advantages, and I will often mention them below.
One could say something more about the shortcomings of the greatest bitcoin revolutionary, but this is more than enough! Maybe too much ...