I did a lot of research over the last few days, and even bought $250 worth of Bitcoin on Coinbase.com.
These are my findings:
I was shocked when they took a $9 transaction fee. It seems that this is the norm, and it goes to the Bitcoin miners, not Coinbase. Not only that, but as Bitcoin's price rises, transaction fees can reach much higher, $50 and up. This is because the miners will process those who pay higher fees first. So imagine if you're trying to sell or buy a pack of candy for a $1, or transfer $10 to a friend, and end up paying $50 to process it.
The other major problem is transaction time. It takes at the fastest 10 minutes for a transaction to be confirmed. But many take hours, or even days. OR they never get confirmed, since there transaction fees are not high enough. This a glaring flaw. In order for Bitcoin to work, it must treat all transactions equally, and the first transaction should be processed first. And it goes without saying that every single transaction should be processed.
Also, did you know that Bitcoin can only process 7 transactions a second?? I could not believe that when I read it. There is NO WAY Bitcoin will be used globally, handling millions or billions of transactions. For comparison, VISA can process 25,000 transactions a second.
Besides that, there are at least a dozen other problems with Bitcoin, including:
-Government regulation. Governments will restrict how Bitcoin is used, or even outright ban it, as in many countries right now, such as China.
-Competing crypto currencies. Bitcoin is in the lead, but there are hundreds of other competitors. All it takes is one to dethrone Bitcoin.
-Massive volatility. No currency will be widely adopted if its value fluctuates wildly from one hour to the next.
In theory, cyrptocurrency is a great idea. It's a way to send money instantaneously to anyone around the world directly, with no fees, and no middleman.
However, right now, there is no way it will work. High transaction fees, slow processing times, etc will doom Bitcoin unless it evolves.
Think of all the technologies that were hot at first, and great ideas, but eventually died and dethroned:
VHS, Beta, Laser Disk, walkman, CD players, Blockbuster, Napster, Limewire, Myspace, ICQ, AOL, Yahoo, Alta Vista, Excite, etc....
This does not mean Bitcoin will drop in value. Far from it. Because many people are buying it as an investment, rather than a currency, it has a high demand. And since the supply is limited, the price will go up. Maybe up to even $500,000 or more. But unless, Bitcoin has intrinsic value as a currency is widely adopted worldwide, eventually the bubble will burst, and Bitcoin will be worthless. Many compare it to the tulip bubble in Holland, where hoarding and speculation brought the price of a tulip all the way up to the price of a house.
So, to summarize, if Bitcoin evolves and solves all its problems, it can be revolutionary, just like the Internet itself. However, there are many hurdles it must overcome to survive. If it does, it will be revolutionize how we use money.
My feeling is that cryptocurrency is going to be the future. But whether Bitcoin is going to be the survivor, I don't know. Imagine all the things we can do online now, such as stream from Netflix, download gigabytes in seconds, etc. When the Internet first appeared with dial up, those things would have been impossible to do. But the Internet technology evolved to meet demand, and if Bitcoin does the same, it will be the future.
What do you think? Do you own Bitcoin? How much? Do you use it as a currency, or hold it as an investment.
I am currently thinking of buying 1 entire Bitcoin ($12,000) and hold it if and when it reaches $300,000. If I lose it, it will not be devastating, but if it goes to $300,000, and Bitcoin widely used worldwide, it might even to go 1 million in the future.
These are my findings:
I was shocked when they took a $9 transaction fee. It seems that this is the norm, and it goes to the Bitcoin miners, not Coinbase. Not only that, but as Bitcoin's price rises, transaction fees can reach much higher, $50 and up. This is because the miners will process those who pay higher fees first. So imagine if you're trying to sell or buy a pack of candy for a $1, or transfer $10 to a friend, and end up paying $50 to process it.
The other major problem is transaction time. It takes at the fastest 10 minutes for a transaction to be confirmed. But many take hours, or even days. OR they never get confirmed, since there transaction fees are not high enough. This a glaring flaw. In order for Bitcoin to work, it must treat all transactions equally, and the first transaction should be processed first. And it goes without saying that every single transaction should be processed.
Also, did you know that Bitcoin can only process 7 transactions a second?? I could not believe that when I read it. There is NO WAY Bitcoin will be used globally, handling millions or billions of transactions. For comparison, VISA can process 25,000 transactions a second.
Besides that, there are at least a dozen other problems with Bitcoin, including:
-Government regulation. Governments will restrict how Bitcoin is used, or even outright ban it, as in many countries right now, such as China.
-Competing crypto currencies. Bitcoin is in the lead, but there are hundreds of other competitors. All it takes is one to dethrone Bitcoin.
-Massive volatility. No currency will be widely adopted if its value fluctuates wildly from one hour to the next.
In theory, cyrptocurrency is a great idea. It's a way to send money instantaneously to anyone around the world directly, with no fees, and no middleman.
However, right now, there is no way it will work. High transaction fees, slow processing times, etc will doom Bitcoin unless it evolves.
Think of all the technologies that were hot at first, and great ideas, but eventually died and dethroned:
VHS, Beta, Laser Disk, walkman, CD players, Blockbuster, Napster, Limewire, Myspace, ICQ, AOL, Yahoo, Alta Vista, Excite, etc....
This does not mean Bitcoin will drop in value. Far from it. Because many people are buying it as an investment, rather than a currency, it has a high demand. And since the supply is limited, the price will go up. Maybe up to even $500,000 or more. But unless, Bitcoin has intrinsic value as a currency is widely adopted worldwide, eventually the bubble will burst, and Bitcoin will be worthless. Many compare it to the tulip bubble in Holland, where hoarding and speculation brought the price of a tulip all the way up to the price of a house.
So, to summarize, if Bitcoin evolves and solves all its problems, it can be revolutionary, just like the Internet itself. However, there are many hurdles it must overcome to survive. If it does, it will be revolutionize how we use money.
My feeling is that cryptocurrency is going to be the future. But whether Bitcoin is going to be the survivor, I don't know. Imagine all the things we can do online now, such as stream from Netflix, download gigabytes in seconds, etc. When the Internet first appeared with dial up, those things would have been impossible to do. But the Internet technology evolved to meet demand, and if Bitcoin does the same, it will be the future.
What do you think? Do you own Bitcoin? How much? Do you use it as a currency, or hold it as an investment.
I am currently thinking of buying 1 entire Bitcoin ($12,000) and hold it if and when it reaches $300,000. If I lose it, it will not be devastating, but if it goes to $300,000, and Bitcoin widely used worldwide, it might even to go 1 million in the future.