Can Bitcoin replace banking system? Weakness and challenges of BTC.. Must Read

Cryptocurrency is booming these years and expected to increase even more. When we talk about crypto, the first currency that comes in our mind is Bitcoin BTC. BTC is the first crypto ever made, and after BTC there came so many follow it.

Everything system very use in this world has to evolve. Just like Messaging services, before internet people use to send letter just by post office and through technological advancement we rarely post letter. Every letter is sent through e-mails. The same evolution has to come in monetory system as well. Bank might before obsolete but there are some weaknesses as which we should consider.

Let's talk about some weaknesses first

 •Nontaxable

Circulation of Bitcoin is not recorded or counted in an economy hence remained un-taxed. Although many governments are finding ways to tax circulation of BTC but it can not be completely done due to it's anonymity. Government will get to know about the possession of your BTC only when you buy exchange it with traditional currency. This is one of the reasons why countries like Pakistan, Bangladesh, Nepal have banned BTC or in the process of banning it.

•Used by criminals

This one is pretty obvious. every picture has a darker side. As you can use internet to illegal activities and watch porn or you can use it to learn new things, communicate and help your business grow.  The same way Bitcoin has a darker side as well, criminals have been using to sale drugs, weapons, and anything you can imagine. due to it's anonymity the identity of buyer and seller both can be kept secret, which they use for their advantage. 

•Volatility 

It’s not a desirable mode of payment to trade in Bitcoin due to it's volatility. One of the function of money is stable. If you want to buy a car on installment, you want to know exactly how much you have to pay every month one the time of agreement. due to high volatility in BTC you can make future payments. One minute it is at $17,190 and $16,840 on the next.

 

•Dependent Currency

The Fiat currency is not dependent on anything to work. Bitcoin is dependent on internet. In many countries internet is not available, so if you want to do any transaction there, you won't be able to do then.

•Decentralized Currency 

Although this can be one of the benefits, but right now we are looking at the weaknesses therefore take it as that. You cannot claim or complain if any mishap happens. If you loose your money it is all your responsibility, you are your own bank. 

  

•Vunerable to hacking 

Most new BTC holder do not understand the responsibilty they have to keep there BTC safe. Many people including myself have lost thousands and millions worth of BTC besuse of hackers attack. Currency notes and Fiat currency can not be hacked as long as they are in physical form

Destruction of Physical Wallet 

Many people have lost millions' worth of Btc because of loosing there their Wallets and their drives being physically damaged. 

•Forgot Password

Your Password is then lost so your Bitcoins! although you can have recovery phrase to recover your funds, but what if that's also lost? This thing was not possible in banking system, even if you fogeet the pass key of your bank account, bank can give the access back to you after your identity verification. 

 

•Not Accepted In Daily Transactions 

It is not accepted in local store as a medium of exchange yet! 

These were some of the weaknesses of BTC in my opinion. What do think about them ? or do you have any other you want to share, write in reply.

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