If BTC is Ever Going to Take Over as a Real Currency it Needs to Solve These Problems
- November 17, 2023
- Bradley Taylor
Bitcoin is cryptocurrency which has been active for almost 15 years. It has slowly but surely built quite the following and has seen its injections of capital by excited investors. In fact, there are three real utilities for this coin.
- To send and receive money. You can covert your dollars into crypto and send it to anywhere in the world. The receiver of that crypto can then convert it back to dollars or keep it as crypto and use it to pay someone else or even hold onto it.
- Investment Vehicle. As the adoption and use of BTC grows, so does the value of each unit. It was designed to have a limited amount of coins in the system. Therefore the more demand it has the higher the price is.
- Store of Value. This early in the game you can pretty much convert your money to BTC and it will at the very least maintain its value over a period of time. Even if it drops it will surely regain that loss. At some point in the future, this utility may go away as BTC peaks.
The Reason Why BTC Isn’t There Yet
Bitcoin cannot replace dollars for several reasons actually.
- There is too much volatility. People don’t want their main form of money to wildly change in value.
- It takes too long to send sometimes. Even with upgrades like “The Lightning Network” BTC can be really slow if the system is jammed up with transactions. People want to spend and be done with it. A recent send we witnessed took 5 hours.
- The cost of sending BTC can get outrageous. One of the positives touted by fans of BTC is that you can send $1000 for just .40 cents. Something which would cost you $50 or $100 if you use Western Union. But, the BTC network gets so behind sometimes that cost per transaction can balloon out of control. For example, right now if you want to send just a few hundred bucks, it will cost you $8 to do so. If you want to send $1000, it costs $18! This is not what people signed up for when backing BTC.
Until BTC engineers find a way to make BTC transactions virtually instant and until they figure out a way to cap sending fees, BTC will always be a second rate method of spending money. The volatility is something which cannot be controlled as it is the nature of the coin. Cryptos which do maintain constant value are called “stablecoins” and BTC will never be one of those.