The Reasons Cause Bitcoin Was Unsuccessful

The Challenges Hindering Bitcoin Adoption
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The Challenges Hindering Bitcoin Adoption
Bitcoin is a form of digital currency that is designed for the purpose of peer-to-peer online transactions. The bitcoin idea was born in 2008 and it was proposed by a pseudonymous software developer, Satoshi Nakamoto. Later, countries such as United States, Australia and Canada adopted the idea and allowed their entities to start trading and mining it. Since 2008 to 2016, the value of bitcoin has experienced continuous growth from $1 to $ 2900 USD respectively (Pryto, 2016). Nonetheless, the technology has its own shortcomings that have prevented the system from being adopted globally. Some of the issues include, facing rejection from the governments for the fear of tax evasion, fluctuation of its price, the existence of a 51% attack, security, transaction limits as well as confirmation delays.
The first challenge is that the cost of bitcoin is volatile and the system is not secure for consumers to continue using it as a currency. According to Patterson (2015), the bitcoin price has kept on fluctuating, between 2010 and 2014 its cost shifted from $0.05 to $381.01 respectively. Considering that bitcoin market is still evolving, the capitalization market is still at $4 billion which explains why the bitcoin global stock market is stuck at 0.01%. Additionally, small markets are prone to manipulation when compared to large markets hence even in future the price will keep changing because there is little money coming in and exiting at the same time. Such negative factors influence the number of people who are willing to use the currency in their businesses. Majority of the people fear that using bitcoin is an insecure currency and they are not ready to invest into it over fear of losing their money.
Secondly, most governments are finding it difficult to accept bitcoin technology fearing its popularity will make people to evade paying taxes. Considering the huge influx of businesses, countries such as China, Mexico, Russia and Germany have started restricting the use of this digital currency claiming that it acts as a hub for illegal trading and money laundering. Meanwhile as tax regulators in the United Stated are drafting a Bit License proposal that requires bitcoin commercial holders to stick to the financial rules, China on the other hand is banning banks from bitcoin use and other crypto currencies (Patterson, 2015). Thus, if governments fail to regulate the business and bitcoin users continue to evade taxes, then there is a possibility that most countries will be forced to take drastic measures that will render the business useless or get rid of the entire bitcoin system altogether.
Another challenge is that the bitcoin network is still battling confirmation delays and transaction limits. At the present, the maximum number of transactions that bitcoin can process is seven transactions per a second. This is a blow for the bitcoin market because other networks like Visa make more than forty thousand transactions per second. As for the confirmation time, bitcoin still delays transactions even when sending and receiving it on...