Crypto concerns: 5 issues crypto currency is facing today
Cryptocurrencies and blockchain technology are often presented as major challengers to the existing financial system. They promise to reduce corporate red tape, improve economic development, and create a more just and open economy. While all of this is true, it is not always sunshine and rainbow in the crypto world.
Different cryptocurrency exchanges may offer different sorts of cryptocurrencies and may have different terms, regulations, payment methods, and charges. Exchanges also vary in terms of safety, usability, functionality, and layout. These elements can all play a role in determining the best exchange.
Cryptocurrencies and exchanges have a lot of problems and challenges to overcome. In this article, we will discuss some of the major concerns and recent problems that are restricting the crypto revolution from moving to the next level. Here are five major issues crypto currency is facing today.
“Security is indeed an important and critical issue.”
The biggest issue in the crypto market right now is a lack of security. Indeed, with reports of hacking and attacks getting attention on a regular basis, users are demanding stronger safety for their assets and information. As a digital technology, cryptocurrencies will be vulnerable to cyber threats and may fall into the hands of cybercriminals.
It’s important to note that as technology advances, so do the hackers. Since exchanges are fundamentally vulnerable to hacking because they centralize the risk, further decentralization could be an option in the pursuit of optimal security
“There are some solutions on the board, but the long-term solution is still unknown.”
One of the most serious concerns about cryptocurrencies are the scaling issues they pose. Although the usage of digital coins and acceptance is growing exponentially, it is still outweighed by the number of transactions processed per day by transaction giant, VISA. Furthermore, processing speed is a vital metric that cryptocurrencies cannot deal with on a level of VISA and MasterCard until the network delivering these technologies is significantly scaled. Such an evolution is complicated and difficult to carry out smoothly.
So, if cryptocurrency wants to grow to a larger scale, something must be done. There are some solutions on the board, but the long-term solution is still unknown.
“Scams and market manipulation are extremely common due to the absence of legislative oversight.”
Even if we refine the technology and eliminate all of the problems mentioned above, there will be increased risk to invest in this technology until it is embraced and supervised by federal governments.
Other issues with technology are primarily logistical in nature. For example, changing protocols, which becomes important as tech is being improved, can take a long time and disrupt normal operations.
Volatility in prices
“Price volatility, tied to a lack of inherent value, is indeed a major concern.”
Let’s take the example of bitcoin. Bitcoin has been extremely volatile since its beginnings. This environment has kept bitcoin wildly popular among investors who buy bitcoin in the hope that the value will increase further, but it is not contributing to fuel bitcoin’s success as a currency. For instance, if I want to go on holiday in two weeks and want to set aside $2,000 in spending cash if I want to reserve this money in bitcoin, its buying power might dramatically increase or decrease by the time I leave.
It’s a valid issue, but it’s one that can be addressed by directly linking cryptocurrency value to tangible and intangible assets. Increased adoption will boost consumer trust and reduce uncertainty.
Reputation for criminal activity
“While secrecy is one of the benefits of bitcoin, it does increase the likelihood of illegal usage.”
Bitcoin, particularly in its early days, has been well known for its use on the Dark Web, in money-laundering operations, and in the purchasing of illegal goods. And it also makes sense. As the only truly anonymous form of payment, bitcoin had become the obvious choice for people who wanted to purchase drugs and illegal weapons. To be fair, because it is an anonymous payment source, fully resolving this issue will be really challenging.
After all, technological progress, like itself, has a way of finding its way through artificially-made obstacles.
The bottom line is that cryptocurrency is still in its infancy, and many issues must be resolved before it can be widely accepted as a type of currency.
However, the majority of the problems impacting cryptocurrencies can be resolved or sorted out. Just keep in mind that it will take a little more time before you can walk through a mall and see crowds of people all paying for their different purchases with cryptocurrencies.
This article is not sponsored in any way. Our income comes only from donations, so we don’t depend on anyone. Read more about our journalistic values and how you can support our mission.
Nothing on Cryptinus constitutes professional and/or financial advice. Always think for yourself and make sound decisions when investing. Never invest money that you can’t afford to lose.