What are the common issues facing cryptocurrency today?
There are still a lot of challenges facing cryptocurrency today, but sooner or later, these issues will be solved.
Ever since Satoshi Nakamoto’s white paper on Bitcoin, more alternate cryptocurrencies have been created since 2009. The number of cryptocurrencies in existence today is greater than 2,000 and it continues to grow day by day. This growth may be attributed to the potential that using digital coins can lower transaction fees compared to traditional payment methods that are used worldwide every day.
The idea of digital currencies remains strong and more investors are getting into the cryptocurrency market, but there are still some challenges that these cryptocurrencies have to face. Today, let’s look at five common issues facing cryptocurrency in recent times:
Problem No. 1 – Lack of Privacy
Bitcoin is considered a pseudonymous currency because you can only see transaction outputs, but you cannot see who controls them. It is due to the fact that a user’s name can be hidden through the use of multiple addresses. But it has been proven that if someone knows your IP address and email address, he or she can easily discover who controls each and every Bitcoin transaction.
The reason why this happens, despite privacy being a central pillar of Bitcoin, is because all transactions are stored permanently on the Blockchain. With this data available to everyone, it can create suspicion among law enforcement agencies.
If you’ll ask an average person if he or she would care about someone learning their private information, then most of them will say no. But when it comes to cryptocurrencies and blockchain, the idea of hiding details about your wealth is really important.
Problem No. 2 – Losing access to cryptocurrency
There are many cases today where people lost their private keys or passwords and they cannot access their digital wallets anymore. The problem with losing these assets is that there’s no one who can help recover them because cryptocurrencies aren’t regulated by any government.
If you lose your private keys, then there is no way to recover the funds inside that wallet. Even if you have an extra copy of your private keys and passphrases, it’s still not possible because losing them would result in the loss of all your digital coins.
Problem No. 3 – Lost hard drive
Imagine that you’ve stored your digital currency inside a hard drive and somehow, it gets damaged. It is possible for the blockchain to recover some of the information related to your transaction within about three hours. After that period, the data cannot be retrieved anymore. Using Immediate Edge App may be a good way to protect your crypto assets.
Problem No. 4 – Cryptocurrency user support issues
There’s no one who can help you recover your lost digital coins. Even if there are platforms that can help you recover these funds, they usually charge a very large amount of money for such service. This is the most common cryptocurrency problem today and it will continue to be an issue until someone comes up with a reliable and secure solution that doesn’t cost a lot of money.
Problem No. 5 – Future regulations
Cryptocurrencies aren’t regulated by the government and therefore, it can be used to fund illegal activities such as human trafficking or drug dealing. Governments are now starting to look into digital currencies because of these reasons but there’s no clear policy yet regarding how they will regulate cryptocurrency.
Regulation would surely affect the cryptocurrency world greatly. Right now, many investors are taking advantage of the opportunities that come with digital currency and this will surely change if there will be a lot of restrictions in the future.
There are still a lot of challenges facing cryptocurrency today, but sooner or later, these issues will be solved. If there’s anything constant in life, it is change and digital currencies would not be excluded from the rule.