9 bitcoin problems that investors try not to notice
Date: 2023-07-03 Author: Karina Ziganova Categories: BLOCKCHAIN
A "bubble" from which you sometimes need to get out
Most members of the crypto community live in a safe information bubble. It is formed by an environment of crypto enthusiasts who prefer not to notice the shortcomings of the cryptocurrency dear to their hearts. Another problem is social networks, or rather, the algorithms of their news feeds. Twitter and other platforms "slip" crypto information that corresponds to their interests. Therefore, healthy criticism, in which there is a "grain of truth", often escapes the view of the participants of the crypto community.
As a result, we get the same information "bubble". It does not allow its "inhabitants" to soberly assess the situation and make the right choice - as in the meme about a former crypto millionaire who does not really understand how people live outside the crypto industry.
Meanwhile, while crypto investors are waiting for the next bull run, crypto critics keep their statistics on the failures of the crypto industry. One of these "boards of shame" was created by crypto skeptic Molly White. On the web3 is going just great Twitter account, she chronicles the failures the crypto industry has gone through. Subscribing to it will help you quickly break the rose-colored points of optimism.
Another way to get out of the "bubble" is to keep an eye on the most vocal critics of cryptocurrency.
What's wrong with bitcoin, according to critics
Outside the information "bubble" in which cryptos drive Lamborghinis and vacation exclusively on private islands, there are many negative opinions about cryptocurrency. To understand why the new financial instrument is criticized, let's analyze the main complaints about bitcoin:
1. High level of speculativeness.
BTC appeared against the backdrop of the global financial crisis of 2008. Instead of becoming a full-fledged alternative to traditional money, highly volatile bitcoin has turned into a speculative tool on which traders make money.
2. Low bandwidth.
The Bitcoin network can only process about 7 transactions per second. Such capacity is not enough to serve the needs of all financial market participants
3. Inefficiency.
Bitcoin, as conceived by its creator Satoshi Nakamoto, was supposed to become an independent payment system. At the same time, the developer limited the issue of cryptocurrency. The deflationary nature of BTC has made the coin suitable for storing savings. After all, why spend bitcoin today, if the history of the movement of the cryptocurrency rate shows that in a year it can cost many times more.
4. High level of centralization.
Assumptions that bitcoin is completely decentralized are far from reality. First, over 30% of BTC is in the hands of "whales" - large investors who, if desired, can manipulate the market.
Secondly, Bitcoin mining is also not truly decentralized. As of the time of writing, over 50% of the hashrate comes from just two mining pools: Foundry USD and AntPool.
Recall that if 51% of the capacity of the bitcoin network is in the hands of attackers, they will be able to gain control over BTC.
5. Correlation with the stock market.
Bitcoin is dependent on the stock market. Observations indicate a high level of correlation. It turns out that the problems in the financial market, which put pressure on the fund, have a negative impact on bitcoin. The growth of the stock market, on the contrary, tends to have a beneficial effect on BTC.
6. High fraud rate.
Cryptocurrency allows you to remain anonymous. Therefore, the new financial instrument turned out to be extremely attractive for all sorts of fraudsters.
7. Negative impact on the environment.
Bitcoin runs on an extremely energy-intensive Proof-of-Work (PoW) algorithm. According to environmentalists, BTC mining harms nature. In many ways, therefore, news periodically appears on the network about initiatives aimed at banning PoW mining of cryptocurrencies. However, there are opinions according to which the fight against bitcoin mining is nothing more than an excuse to "crush" BTC itself.
8. There are much stronger projects on the market.
Critics of bitcoin draw attention to the fact that since the appearance of BTC on the market, much more technologically advanced projects have appeared that better serve as an alternative to traditional money.
9. Anonymity of the creator.
Who exactly is hiding behind the pseudonym Satoshi Nakamoto is unknown. Also, members of the crypto community do not have information about the intention of the creator of bitcoin. Who knows - maybe he deliberately hid in order to inflict an unexpected blow on crypto investors in the future?
