How Likely Is It Bitcoin to Lose Its Value? — Explained
Article Gist: Figure out any realistic chances that will snatch bitcoin value
May 2022 — These days surely are hard times for the investment market, and cryptocurrency is among them. We can see all the red candles keep emerging for the past 8 weeks in the weekly time frame, so let’s not sugarcoat it in this chapter.
There are three factors I’ve thought about, and let me start with:
1. Bitcoin loses its anonymity
Bitcoin transaction history is written with a series of numbers and letters, it is because Satoshi Nakamoto wanted to make a decentralised-based transaction, so anyone who is using bitcoin doesn’t need to get their name registered on a financial institution if they wanna send their money directly without a third party.
However, its anonymity is threatened slowly as regulators and tax authorities are forcing cryptocurrency investors to reveal their real identities. In November 2017, Coinbase had their loss against US tax authorities, they were required to submit users’ identification records with transactions over $20,000 in 2013–2015.
2. Transaction fees keep rising
Fundamentally, bitcoin’s selling points are its fast, easy, and cheap transactions. In 2017, we can see this “cheap” transaction fee, as it was only charged their user for less than $1. But in these recent months, bitcoin’s popularity has outpaced the network’s ability to cope with soaring demand. As a result, the bitcoin network transaction fee is increasing day by day and took a fee of around $3 these days, which is 3 times bigger than it charged in 2017.
3. Transaction processes are getting slower
Bitcoin scalability is likely the main problem of all the doubted value, its transaction is getting huge traffic as its popularity exploded, the problem is located in the limited capability of the bitcoin network to handle large amounts of transaction data on its blockchain in a short time.
Disclaimer: I do love blockchain technology and love to see it grow, those facts above are just bitcoin’s lack, even so, it’s still an expensive investment asset, and the demand will keep rising day by day.
