Bitcoin Needs To Innovate

8 May 2022

Design by Violka08

Bitcoin, the first and most well-known cryptocurrency, has existed for almost a decade. Yet, its popularity and usage continue to grow.

This is largely due to its many benefits, including being digital, global, open-source, and secure. Bitcoin also allows users to control their money without needing a third party.

Therefore, for Bitcoin to reach its full potential, it needs innovation. This could include new features or applications that make it more user-friendly and increase its acceptance by businesses and consumers.

Bitcoin 101

Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. On October 31, 2008, he published the invention on a cryptography mailing list.

In 2009, he released the first Bitcoin software that launched the network and the first bitcoins. Nakamoto is an unknown person or persons who have disappeared and have not been heard from since April 2014.

Bitcoin: A Peer-to-Peer Electronic Cash System

Bitcoin is unique because there are a finite number of them: 21 million. Satoshi designed it so there would only ever be a limited supply, ensuring its value would not be diluted by inflation as time passed.

Bitcoins are created through a process called "mining." Miners are rewarded with bitcoins for verifying and committing transactions to the blockchain. Bitcoin mining requires special hardware and software and investment in electricity.

Why does Bitcoin Need Innovation?

Bitcoin was created as a digital currency for secure and anonymous transactions. It is a technology that can revolutionize how we interact with the digital world.

But like all technologies, it needs innovation to reach its full potential. Bitcoin faces several challenges to be addressed to make it more user-friendly and accessible.

Bitcoin saw tremendous growth in 2017, with the value of one bitcoin reaching over $19,000. However, despite this growth, several issues need to be addressed for Bitcoin to continue to grow.

The first issue is scalability; the current blockchain can only process a limited number of transactions per second.

Bitcoin scalability problem 

The second issue is governance; no clear mechanism exists for resolving disputes or changing the protocol.

Bitcoin has a governance problem, no matter who created it 

The third issue is security; hackers often steal bitcoins due to their digital nature. Bitcoin needs innovation to overcome these issues and continue to grow.

Protect Your Bitcoins Against Theft and Hacks

Bitcoin has been successful so far, but there are several areas where it could be improved. For example, the blockchain is slow and expensive to use.

Transactions can take hours to be confirmed, and they can be expensive, depending on the size of the transaction.

Another issue with Bitcoin is that it's not very user-friendly. The user interface is complicated, and buying and selling bitcoins can be difficult. Bitcoin needs innovation to become more user-friendly and faster.

Problems with Bitcoin

Bitcoin was designed to be a decentralized digital currency that would revolutionize how we do business. However, over the past year or so, it has become evident that Bitcoin is not quite there yet. Several problems need to be addressed for it to become a mainstream currency.

The value of Bitcoin has been known to fluctuate greatly, sometimes within minutes. This makes it difficult to use as a currency, as businesses can't rely on its value remaining consistent daily.

Bitcoin has been prone to hacks and scams, which have resulted in billions of dollars worth of losses. This makes people hesitant to use it as a form of payment, as they don't want their money stolen.

Lack of innovation

Bitcoin technology has not progressed in the past few years, so it is not widely used. Bitcoin was created in 2009, and the first transaction occurred in 2010.

However, technology has not progressed since then. For example, there is still no way to process transactions without a third party. We still have exchanges that charge for each movement or buy you make.

This means that users can still not make payments without paying fees to intermediaries. In addition, the technology is also prolonged, meaning it can take a long time for transactions to be processed. These are just some of why Bitcoin is not being widely used today.

Bitcoin saw tremendous growth in 2017; however, one of the main problems facing Bitcoin is its lack of innovation. For example, there is no way to send bitcoins offline, which means you could lose all your bitcoins if your computer crashes or your phone runs out of battery.

Additionally, there is no way to refund bitcoins, so you're out of luck if you send them to the wrong person or purchase something you later regret buying....bye..bye...Bitcoins!

Increased volatility

Bitcoin is often lauded as a global innovation, but volatility is one of its persistent problems. The bitcoin price has swung dramatically in recent years, from a few hundred dollars to more than $19,000 in December 2017 before crashing down to around $6,000 by early February 2018.

Bitcoin hits $6,000 for the first time since November 

That price volatility makes it difficult for businesses and consumers to use Bitcoin as a currency or store of value.

Some proponents of Bitcoin argue that its volatility is a good thing because it indicates that the digital currency is still in its early stages of development. Others say that the volatility will eventually stabilize as the market matures.

But until that happens, businesses and consumers will continue to face challenges using Bitcoin for transactions and storing it as value.

Scaling issues

Bitcoin, the digital currency that has recently seen a surge in popularity and value, also faces scaling issues. These issues limit Bitcoin's use as a currency and impact its long-term viability.

Bitcoin is not alone in facing these challenges. Other innovative payment systems, such as PayPal, have also scaled to meet increasing demand. However, Bitcoin faces unique challenges because of its decentralized nature.

As the number of Bitcoin transactions has increased, so has the time it takes to verify and add those transactions to the blockchain.

The current block size limit of 1 megabyte means only three transactions can be verified per second. This is significantly lower than the capacity of traditional payment systems like Visa, which can handle tens of thousands of transactions per second.

Lack of Merchant Adoption

Merchant adoption is a key factor in the success of Bitcoin as an innovation. This is because merchants provide the use case for Bitcoin and allow it to be used as a currency. However, merchant adoption has been slow, and many reasons for this. 

One reason for the lack of merchant adoption is that Bitcoin is still new and unknown to many merchants.

Bitcoin 'Stuck in the System' Until Merchant Adoption Grows

Many merchants do not understand Bitcoin or how it works and are hesitant to adopt it until they know it better. Additionally, some security concerns with Bitcoin must be addressed before merchants feel comfortable using it. Another reason for the lack of merchant adoption is a few good ways to spend bitcoins.

There are very few places where bitcoins can be used as payment, making it difficult for consumers to use them.

Lack of Regulation

Bitcoin, a digital asset and a payment system, faces a lack of regulation. Unfortunately, this lack of regulation is causing problems down the road for Bitcoin. For example, recently, the price of Bitcoin crashed because of rumors that China would ban Bitcoin.

If China had banned Bitcoin, that would have been a huge problem for the currency because it would have shown that there is no governing body regulating Bitcoin.

Bitcoin Has a Regulation Problem - Investopedia

Additionally, people can engage in illegal activities using Bitcoin with no regulation. For example, someone could use Bitcoin to purchase illicit goods or services without fear of getting caught.

Overall, the lack of regulation is causing problems for Bitcoin and could lead to its downfall if not addressed soon.

Be User Friendly

Bitcoin and other digital currencies have the potential to revolutionize how we do business. However, these currencies need to be more user-friendly for this to happen.

Right now, they are challenging to use and understand. Unfortunately, this prevents many people from using them and hinders their growth.

Digital currencies can potentially make transactions faster, easier, and more secure. They could also help reduce the cost of doing business. However, these currencies need to be more user-friendly for this to happen.

Right now, they are challenging to use and understand. Unfortunately, this prevents many people from using them and hinders their growth.

Cryptocurrencies are still in their early stages of development. As they evolve, they will become more user-friendly. This will increase their adoption rate and help them achieve their full potential.

Reduce Fees

Bitcoin, the first and most well-known cryptocurrency, faces a fee crisis. The fees needed to make a Bitcoin transaction are becoming too high for many people and businesses to justify using the currency. This could have severe consequences for the future of Bitcoin as an innovation.

The problem lies in the way that Bitcoin transactions are processed. Transactions are bundled into "blocks" added to the blockchain, and miners compete to add new blocks by solving complex mathematical problems.

A Guide to Saving on Bitcoin's High Transaction Fees 

The first miner to solve a problem is rewarded with new bitcoins, and transaction fees are also collected from senders.

As Bitcoin has become more popular, processed transactions have increased dramatically. This has led to competition among miners for new blocks, which has driven up transaction fees. In December 2017, the average fee for a Bitcoin transaction was over $28.

Be More Secure

Bitcoin, the cryptocurrency many thought would revolutionize our transactions, needs more security. Its blockchain technology is impressive, but recent hacks have shown that it is not immune to theft.

So for Bitcoin to take off and be used by the masses, its security needs to be beefed up. This can be done in a few ways: 

First, the blockchain itself could be made more secure. The cryptography that underpins it is strong, but it could be improved. Second, the exchanges where people buy and sell Bitcoin could be better regulated.

They are currently quite vulnerable to attack, and this needs to change if people will trust them with their money.

Exchanges are the backbone of the Bitcoin economy. They are where people buy and sell bitcoins for various currencies. And they are also a prime target for hackers.

Attackers have successfully stolen millions of dollars from Bitcoin exchanges over the years.

Binance hack: $40 million worth of bitcoin stolen in hack 

Finally, bitcoin users must be more careful with their passwords and wallets. Too often, people use easily guessed passwords or store their coins in an unsecured place.

Slow transaction speeds

Bitcoin is known for its fast and cheap transactions; however, this has not been the case. Instead, transactions are taking longer to process and are costing more money.

This is due to the increase in the popularity of Bitcoin, which has led to a backlog of transactions on the network. While some people see this as a flaw in Bitcoin, others see it as an opportunity for innovation.

Many proposals have been proposed to solve the congestion problem, including increasing the block size limit, creating second-layer solutions such as Lightning Network, and implementing new algorithms to process transactions faster.

The developers of Bitcoin are working hard to find a solution to the congestion problem. They are confident that they will be able to find a solution that satisfies everyone.

In the meantime, Bitcoin remains a valuable tool for making fast and cheap transactions.

Final Thought

Bitcoin could be improved by increasing the number of merchants who accept it as payment.
If more merchants started accepting Bitcoin, it would become more widely used, and its value would likely increase.

The Bitcoin protocol requires users to complete a proof-of-work function, which takes time and energy to produce, to create new blocks and add them to the blockchain. Bitcoin has been praised for its security, transparency, and lack of central authority. Still, it has also been criticized for its slow transaction speeds, high energy consumption, and lack of innovation.

Despite these criticisms, the Bitcoin community remains large and active, with developers working on new projects that could make Bitcoin more user-friendly and innovative. If these improvements are made, Bitcoin could become a significant force in the future of payments.

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