To some quarters, Bitcoins was intended to be the next big thing, particularly in the financial sector. In fact, some actually believed that Bitcoins would replace standard currencies. This simply means that it could well be on its way to be the new way of doing business. But is it?
Can Bitcoin be the new way of doing business?
One thing for sure, Bitcoin has arrived! The one problem with this cryptocurrency is that its price has been very volatile. Could Bitcoin be the new way of doing business? It would because a lot of financial markets are now looking at legitimizing bitcoins as a form of financial asset.
What difference does it make?
The one issue with Bitcoin is that it does not have a standard and consistent ultimate value. It was supposed to be a free-standing currency but has since become more of a speculative asset. In a recent report, it was stated that the price of Bitcoin has actually surged to a level which is difficult to predict. However, the main problem is that its use as a currency (for business in particular) has not been as promising.
Here are some issues:
- Time – Blockchain is the ledger that keeps all the updates for Bitcoin. There is just too much time and effort taken for the mining of bitcoins. So much so that the updates are dominating the mining of bitcoins and its progress. Because of this, using Bitcoins has become too time-consuming. At times, one single transaction could take hours and leading up to days.
- Merchants – for Bitcoins to be popular, it will need a lot of uptake from merchants. One of the major gaming platforms recently announced that it will no longer be accepting Bitcoins. This is one drawback which will lead to more merchants doing the same thing. The reason is the time and fees involved.
- Vulnerability – Being in the open market means it is vulnerable. One of the strongest attraction of Bitcoin is that it is transparent. Let’s face it! Bitcoin is particularly popular in Bitcoin because more than 80% of the mining happens there. It is done through small number of so-called pools. If this is collectively accumulated, think about the control of where Bitcoins will go!
So, there you have it, is Bitcoin a financial bubble? Could it be the new way of doing business? There are still issues that need to be solved and addressed before it can become the currency for business.