Why I Think Bitcoin Is Not Ready For Prime Time
So Bitcoin becomes the rage again for unknown reasons. Today Bitcoin price is going through the roof. As of this writing, a single Bitcoin is equating to $2251 (US Dollar). I can see the allures of Bitcoin, but I can also see so many drawbacks. Let’s talk about the drawbacks, shall we?
First, one of the biggest drawbacks of Bitcoin for me is not being able to sell Bitcoin anonymously through an exchange. Instead, the exchange requires you to send your info including your social security number before you get verified and be able to do any trading of Bitcoin. This means if an exchange gets hacked, all of your info is going to be shared or sold to any unknown parties. Of course you can argue that lot of your information is already in places that are being stored online and can still be hacked easily. I argue that at least government agencies and banking institutions are perhaps more willing to protect your information than some Bitcoin exchanges. Thus, hacking into these institutions may not be easily done, and once it is being done the government would definitely go after such hackers in a big way. So, at least you know you got huge resources to look after your information in a more serious manner.
Second, another biggest drawback is that many Bitcoin exchanges cannot be trusted, because not only they’d gotten hacked way too many times before but some of them also run away with your bitcoins. This means if an exchange decides to stop doing business and just run away with your bitcoins, you’re basically losing all of your bitcoins on a specific Bitcoin exchange. This is why I don’t think it’s wise to store any of your bitcoins on a Bitcoin exchange besides just enough bitcoins for selling purposes. Once buying a bitcoin on an exchange it’s wise to transfer the bitcoin out of the exchange immediately and into your more secure Bitcoin wallet that stores on your local machine/computer.
Third, another biggest drawback is that you can lose all of your bitcoins easily if a computer that you’re using to store all of your bitcoins got corrupted hard drive. This means if you cannot rescue a specific corrupted hard drive that stores all of your bitcoins, you basically lose all of your bitcoins forever. Thus, I think some people may adopt storing their bitcoins on multiple machines in multiple wallets, so they don’t have to worry about having all of their eggs in one basket. Some people also do backups for their Bitcoin wallets’ data to ensure that Bitcoin wallets’ data won’t get corrupted easily. It is also wise to encrypt the partition or partitions that you store your Bitcoin wallets’ data and only this way you can protect your bitcoins from being stolen easily. Basically, encrypting a partition on top of an already encrypted Bitcoin wallet’s data is like having one more security layer.
Fourth, another biggest drawback is that Bitcoin is still not being accepted widely. Sure, there are many places that may accept Bitcoin, but there are also so many many places that do not accept Bitcoin.
Fifth, another biggest drawback is that Bitcoin can be confusing for people who have no experience with computers. Some people in older generations will not be able to understand how to use Bitcoin, so it’s going to be exotic and hard to use for them. To use Bitcoin, one must know how to securely protect your bitcoins in a Bitcoin wallet and on a secure machine, but these measures are probably just gibberish for people who do not have the ability to use computers correctly. Especially, if they do not know how to use computer in a secure manner, they are going to get hack easily and lose all of their bitcoins.
Sixth, another biggest drawback is that many governments are not recognizing Bitcoin as a currency, so Bitcoin is in a grey area in which so many different laws are being applied to Bitcoin. This means you have to use Bitcoin differently in each country, and so laws that regulate Bitcoin in one country don’t behave similarly to laws in another country. Of course, you can argue that cash is not the same in all countries, but cash is legal tender — thus there are specified laws that may apply to the usage of cash even though such cash is not printed in the specific country or countries. Some governments are outright hostile toward Bitcoin, thus they’re banning Bitcoin outright.
Seventh, another biggest drawback is that some governments are making you a target of investigation for using Bitcoin because they think Bitcoin is a way to facilitate dirty money.
These are the drawbacks and other drawbacks that I may not have stated that prevent me from seeing Bitcoin as a sure way that can replace traditional money. Furthermore, I like to have the option of Bitcoin and digital currencies and traditional currencies in digital forms, but I also like even more to see that traditional currency in the form of cash does not go away. Why? Anything that is tangible is definitely harder to be erased and made disappear. This means your wealth can be protected better even if it means securing them under your mattresses. If your wealth can just go poof in an instant, it means your wealth is not being secured in the correct form or forms. Because Bitcoin has so many weaknesses, I think it’s not wise to convert a huge portion of your wealth into bitcoins at all.