At first glance, Bitcoin has achieved a lot in its eleven years of existence. The ICO boom at the end of 2017 was probably the biggest moment in the history of the cryptocurrency industry. In particular, there was great media coverage and people from all over the world had the opportunity to hear about bitcoin.
But to be truly ready to enter the mainstream, a new article The Startup reveals 4 main problems that must first be addressed.
1) Faster transaction confirmation speed
Confirmations in the bitcoin network take between minutes and hours, depending on trading volumes. The report notes that for the masses to adopt Bitcoin, it must be able to handle super fast transaction confirmations. He goes on to point out that "it is unimaginable for a merchant to make a customer wait 10 minutes before the bitcoin transaction is fully validated."
Lightning network, which allows the creation of micropayment channels to mitigate this problem, has been deployed to some extent. Despite the progress so far, there is much room for improvement.
2) Higher transaction throughput
The number of transactions that the bitcoin network can handle per second is another intimidating problem. Currently, bitcoin can handle only 7 transactions per second (TPS). This pales in comparison to centralized systems such as Visa, which easily handles several thousand transactions per second, with a maximum capacity of 24,000 TPS.
Once again, the Lightning protocol will greatly contribute to improving bitcoin TPS.
3) Reduction of transaction fees for high volumes
At the moment, the average rate to confirm a transaction is approximately $ 0.3. However, this amount does not depend on the amount of bitcoin that is transferred. The article notes that for the masses to use bitcoin as a means of payment, these rates must be reduced.
Transaction fees tend to increase with an increase in the volume of transactions. Case in point, during the 2017 bull market, transaction fees increased to $ 34. These high transaction fees are a major obstacle to the mass adoption of Bitcoin.
4) More decentralization of Bitcoin mining
The centralization of bitcoin mining also remains a concern. Currently, most of the bitcoin mining groups are in China. In perspective, Chinese bitcoin miners control 65% of the overall hash rate of the bitcoin network. In addition, only Bitmain controls most mining groups.
This poses a great security risk for the bitcoin network and some speculate that Bitmain could manipulate the network taking control of more than 51% of the bitcoin processing power. However, it would not be in Bitmain's interest to put his reputation and income at stake.
However, the overall good health of the bitcoin network requires greater decentralization of the hash rate available.
The eleven years since the start of bitcoin have been a wild journey for most people in the crypto verse. But in that short time, the asset has accomplished a lot, even becoming the best performing asset of the last decade.
Meanwhile, the potential of bitcoin as a true medium of exchange is just beginning. Addressing the aforementioned barriers will allow Bitcoin to further establish its brand in the financial industry. Once this happens, mass adoption will continue.