There are several rumors out there about Bitcoin. Find out the most common criticisms around Bitcoin.
Bitcoin has constantly faced increasing pressures from government regulators and a handful of investors, casting doubts over its viability as a transaction currency or a store of value. As the leading crypto, criticisms about Bitcoin significantly impact the entire market. However, it is still essential that you know about the common complaints and doubts about Bitcoin. That would help you to make informed decisions when investing in Bitcoin. The following are the top criticisms about Bitcoin.
Bitcoin Drives the Criminal Economy
Many people have increasingly criticized Bitcoin for facilitating criminal activities over the internet. The main illegal activities tied to Bitcoin include money laundering, tax evasion, drug trafficking, terrorism funding, fraud, and assassinations. Critics believe Bitcoin facilitates those activities because of its decentralized network.
While Bitcoin transactions do not reveal users’ real-world identities or include third parties, its blockchain validates all the money transfers on a shared digital ledger. Besides, Bitcoin is a universal currency, not regulated by any central authority. The latest statistics show the amount of Bitcoin used in criminal activities is still relatively small compared to those tied to fiat currencies.
The claim that Bitcoin facilitates illegal activities is an industry-wide issue, affecting other cryptocurrencies. Criminals are mainly attracted to Bitcoin because of the enhanced network security that makes it difficult to track users’ identities and transactions. However, ways now exist for tracking Bitcoin transactions tied to illegal activities.
Bitcoin Isn’t a Viable Store of Value
Some investors have also constantly criticized Bitcoin’s viability as a store of value, saying it does not have the potential to serve that purpose. According to them, Bitcoin is a highly volatile asset that could quickly leave investors with huge losses if the markets take a big hit. However, savvy investors also say the volatility creates opportunities for profitability with Bitcoin.
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Bitcoin has historically experienced massive price gains and declines, demonstrating better resilience to inflation than traditional assets. Many institutional investors have increasingly accumulated Bitcoin holdings to hedge against inflation. Besides, Bitcoin has a diminishing supply and growing demand that will enable it to maintain a higher value over time.
Bitcoin is a reliable and secure investment asset. It gives investors the autonomy to acquire, transfer and manage their assets as they see fit. Thanks to its blockchain ledger, investors can maintain accurate and consistent transactions records. Besides, its value fluctuates based on users’ confidence instead of political or institutional influences.
Bitcoin is a Market Disruptor
Although Bitcoin adoption has significantly increased over the recent years, institutional investors are still skeptical, fearing crypto would disrupt their businesses. Some governments have even restricted their banks from dealing in crypto. They mainly view Bitcoin’s decentralization as a threat to national currencies and economies.
Bitcoin is the pioneer cryptocurrency, transforming various aspects of the global economy. It has inspired the emergence of the entire global industry of cryptocurrencies, now valued at over $3 trillion. Bitcoin has also created several business opportunities in multiple sectors, including manufacturing, travel, finance, e-commerce, healthcare, retail, and tech.
Bitcoin’s underlying blockchain technology is open-source software that allows innovators to build various products and projects around crypto. Overall, Bitcoin has inspired robust economic development and growth worldwide. Experts believe Bitcoin will become even more helpful as its adoption takes shape into mainstream institutions.
Like any other revolutionary invention, Bitcoin faces lots of criticism. However, most of them are just speculations without actual merit. Bitcoin is a transaction currency and an investment asset, recognized and accepted worldwide.