While I am buying Bitcoin, I am very much aware of the current pitfalls of doing so. I personally buy only the amount of Bitcoin that I could afford to completely lose – and I am acquiring Bitcoin for the long haul…not for a “get rick quick” plan. That said, I think these disadvantages will be resolved in time, as have most issues that involve new technology. I have been a consultant for clients since the Internet was first available, and I well remember how many of my clients could not envision how in the world they would ever sell products over the web! Today – every single client I have sells either goods or services online and wouldn’t dream of not doing so. That took about 10 years to be widely accepted, and about 15 years to become a critical way of doing business. Because the Internet has matured, as have mobile technologies and applications – I don’t think it will take nearly as long for Bitcoin to become mainstream, and I feel the time is now to begin slowly acquiring it.
Degree of acceptance – Many people are still unaware of Bitcoin, and they are still accepted by a small – but growing – group of online merchants. Every day, more businesses accept bitcoins because they want the advantages of doing so, but this makes it unfeasible to completely rely on Bitcoins as a sole currency.
Volatility – The total value of bitcoins in circulation and the number of businesses using Bitcoin are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. This constant fluctuation will cause merchants that accept bitcoin to continually change prices. It will also generate confusion regarding refunds. For example, if an item was initially bought for 0.003 BTC, and returned a week later, should 0.003 BTC be refunded, even though the valuation may have gone up, or should the new current amount be refunded? Important questions that need to be addressed.
In theory, this volatility will decrease as Bitcoin markets and the technology matures. Never before has the world seen a start-up currency, so it is at the same time, both difficult and exciting to watch as this new technology grows.
Technical Flaws and Deflation – Bitcoin software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing. The total number of bitcoins is finite, and thus will cause deflation because an individual bitcoin will be worth more and more as the total number reaches the maximum. This system is designed to reward early adopters. A bitcoin will be valued higher with each passing day, so knowing when to spend would become important, and may spur spending surges which will cause the Bitcoin economy to fluctuate very rapidly, and unpredictably.
By Pamela|2017-03-13T16:27:03-05:00March 13th, 2017|