Bitcoin Challenges You Should Be Aware Of

Bitcoin has already been through a lot even though it’s a relatively new technology. And it’s definitely true that there’s still a long way to go before the digital currency become a widely used method of payment for services.

In this article we’ll talk about the biggest Market News and Charts Analysis challenges faced by bitcoin. If you’re planning on becoming abitcoin user or trader, check these items out.

Volatility

Bitcoin has a huge reputation for volatility even today. Its incredibly volatile nature also doesn’t show any signs of diminishing either.

The environment has made bitcoin an extremely popular choice among speculators who buy bitcoins in hopes that the price will continue to rise. However, it isn’t helping to fuel bitcoin’s popularity as a currency.

Acceptance

There are already many retailers who accept bitcoin as payments by consumers. However, the digital currency still hasn’t come near to being widely accepted. If one major payment processing company finally decides to permit retailers that use their hardware to start accepting bitcoin payment very easily, it could mean that bitcoin is ready for mainstream adoption.

Theft Potentials

Security measures are there for bitcoin to be virtually impossible to steal. However, taking advantage of Forex Economic Calendar  them involves a somewhat complex knowledge of how bitcoin works and can often require substantially more effort of the part of the user.

That is also the case even if true bitcoin enthusiasts don’t mind taking extra security measures. There are also online bitcoin wallets, and with them are the chances that the currency could be stolen. It has already happened before.

Criminal Activity

Bitcoin, in its early days, was quite infamous for its use on the Dark Web, in money laundering activities, and on the purchase of illegal items. Since bitcoin is quite popular for the anonymous aspect of its users, bitcoin became the natural choice for people who wanted to buy different items that are not entirely legal.

And due to its anonymous payment source, it will also be difficult, if not outright impossible, to fully solve such problem. Anonymity is one of bitcoin’s greatest strengths, but it’s also one of its greatest weakness that many unlikely individuals can exploit.

Scalability

Bitcoin is also considered to be having some scalability problems. The underlying technology behind bitcoin – the blockchain – limits the amount of information that can be contained in each block to 1 megabyte of data. Such limitation enables maximum work capacity of about three transactions each second.

In simple words, as more and more bitcoin trades and purchase transactions are being executed, the network will a tougher time to keep up. This could eventually lead to serious processing delays.

Tax Issues

Under the current law, the IRS treats bitcoin and other digital currencies to be “intangible property,” which implies that they can be subject to capital gains taxes.

If you buy bitcoin and then sell it for more than what you have paid for it, you’ll have to report the difference on your taxes.  Moreover, every time you use bitcoin to pay for something, it can be a taxable event.