Bitcoin is one of the first cryptocurrencies to have gotten noticed by the public. Even though it was developed by an anonymous person with the pseudonym Satoshi Nakamoto in 2009, it has managed to shake the world economy several times since.
However, as Bitcoin has become harder to mine over the years, and with tech leaders such as Elon Musk officially rejecting it, it seems the interest in this cryptocurrency has been dying down over the years.
However, before declaring it an outdated currency, it’s wise to go over the challenges it faces and whether it can overcome them or not.
What are the Challenges Bitcoin Faces in 2022?
Here are some of the biggest challenges that bitcoin faces today:
Bitcoin is an incredibly volatile cryptocurrency; as such, it has been the only one to have fluctuations that have shaken the entire cryptocurrency market. Experts in the field have predicted that its value can rise to $1 million in a few years or drop to $0.
- Lack of Self-Regulation
The fact that Bitcoin was created by an anonymous person (or team of people) leaves no accountability for its regulation. While its main purpose is to be a decentralized currency, it still needs internal regulation to prevent incidents like smart contracts and hacks.
Since most governments consider Bitcoin an intangible property, it is taxable. Moreover, even trading Bitcoins in exchange for objects or products leaves the transactor liable to pay taxes on the transaction. This is another fact that deters people from fully embracing Bitcoin.
Being a part of the Bitcoin blockchain, this cryptocurrency is very limited in the kind of transactions it can be scaled to do. Moreover, since each blockchain block is limited to 1MB of storage, it creates problems and delays for an increased number of transactions on the blockchain.
As stated above, Bitcoin is not the only cryptocurrency out there. However, with several other blockchains, such as Etherium, offering various abilities such as trading NFTs, Bitcoin doesn’t look so appealing anymore.
Does This Spell Doom for Bitcoin?
Fortunately for Bitcoin enthusiasts, no. Bitcoin is still going strong as a cryptocurrency, and at the time of writing this, it is valued at nearly $24,000. So even though you cannot buy a Tesla with your Bitcoin, there’s still a reason for you to create a trustworthy online bitcoin wallet.
Bitcoin is still an evolving technology, and while it may have some downsides, every other currency has a few of its own. Nevertheless, it was the first decentralized currency to gain worldwide usage and is an excellent investment even in 2022.