Bitcoin, though a popular fiscal asset, has started looking less like an actual currency. Online payment venture Stripe has withdrawn support for Bitcoin. The reason behind this is:
- The rate of failed transactions has increased with increasing confirmed transactions. Not only is the amount transacted cited as wrong, but also the amount charged for the transaction has become exorbitant.
- A rising number of companies and business establishments are no longer dealing with bitcoins. A conference on Bitcoin held in Miami refused to take the attendance fee in Bitcoin.
- Fundamentally, there are 2 technological reasons and 1 economic reason for the failure of crypto currency i.e. Bitcoin.
- From a technological point of view, a transaction in Bitcoin is very sluggish and painstaking as the verification of transaction takes place in small amount blocks. This difficulty can be resolved by making use of big blocks or a kind of provisional credit to unburden the internet work. But transactions in Bitcoin is verified by people (miners) whose payment is done through bitcoin itself. But this way will be checked soon as the total amount of cryptocurrency is now at around twenty-one million, as minors will now have to be paid for the transactions.
Of course, such technical glitches can be possibly resolved by Bitcoin or competing crypto currencies.
The economic reason is that Bitcoin is never as suitable as actual money. There exists a risk and reward trade in every fiscal market. Real estate, stocks and other assets that reasonable long term returns fluctuate in worth when traded in short terms. This is unhealthy for transactions. A simple example of the financial situation is that if you buy pizza for a hundred bitcoins now, the same amount will stand to a hundred million dollars some seven to ten years later. How regretful will that be now? It is very difficult to predict the future worth of bitcoins. Price of an asset is taken to be it’s worth but the same cannot be said for bitcoins.