The 5 big problems with Bitcoin / blockchain everyone should be aware of

[fabianji]

Forbes published an article on five big areas of challenge regarding the bitcoin / blockchain technology:

https://www.forbes.com/sites/bernardmarr/2018/02/19/the-5-big-problems-with-blockchain-everyone-should-be-aware-of/

Here a summary of those five points plus a discussion on their validity.

1. Bitcoin / Blockchain has an environmental cost
2. Lack of regulation creates a risky environment
3. Its complexity means end users find it hard to appreciate the benefits
4. Bitcoin / Blockchains can be slow and cumbersome
5. The “Establishment” has a vested interest in Bitcoin/ blockchain failing

These are points to be aware of because very likely you will be faced with all of those at some point in conversation about this amazing technology. And while it is true that blockchain is not the solution for everything - nothing is - the five points mentioned here are pretty much obsolete already or just currently being addressed.

1. Yes blockchain requires energy to run but so does the internet and pretty much everything we use / do. And if people tell you blockchain is worse then just ask them to consider how much energy is required to print and distribute paper money. Think trees, chemicals, physical transport, gasoline, guns etc etc.
2. Regulation is just the big topic at the moment and while China has taken a stance against cryptocurrencies it is still actively supporting blockchain! All other countries are either for self regulation and think he state should not get involved or even try to lure blockchain technology into their country or state with tax breaks and beneficial regulation.
3. This is true for every new technology and just remember the internet fifteen years ago. Not very user friendly and everyone thought it would be difficult to get everyone to adapt it. Same for computers: in the sixties they used punch cards and had neither keyboards nor monitors let alone a graphical user interface. So we can be sure that more user friendly access to blockchain technology will emerge for sure!
4. Yes that is true and but it is already faster than a lot of fiat technology for money transfers (Ripple / XRP is being used by moneygram and Santander for international money transfer because it is faster than their existing technology) speed is also something that will improve with technology maturing, through infrastructure as well as new protocols.
5. Absolutely and that just emphasizes how important this technology really is!

What are your thoughts?

[gantez]

1. Yes blockchain requires energy to run but so does the internet and pretty much everything we use / do. And if people tell you blockchain is worse then just ask them to consider how much energy is required to print and distribute paper money. Think trees, chemicals, physical transport, gasoline, guns etc etc.
2. Regulation is just the big topic at the moment and while China has taken a stance against cryptocurrencies it is still actively supporting blockchain! All other countries are either for self regulation and think he state should not get involved or even try to lure blockchain technology into their country or state with tax breaks and beneficial regulation.
3. This is true for every new technology and just remember the internet fifteen years ago. Not very user friendly and everyone thought it would be difficult to get everyone to adapt it. Same for computers: in the sixties they used punch cards and had neither keyboards nor monitors let alone a graphical user interface. So we can be sure that more user friendly access to blockchain technology will emerge for sure!
4. Yes that is true and but it is already faster than a lot of fiat technology for money transfers (Ripple / XRP is being used by moneygram and Santander for international money transfer because it is faster than their existing technology) speed is also something that will improve with technology maturing, through infrastructure as well as new protocols.
5. Absolutely and that just emphasizes how important this technology really is!

What are your thoughts?

These bright sides are my concern. After going through it, I was taken back to memory lane on the hurdles passed through when computer was introduced to the society and the biase that accompanied it plus the negative of not being able to suit into the society. And today, computer did not only fit in but has been advanced in so many ways with different versions of hardware etc, helping humanity to make life easier, to say a few.

It brings into bear that these days from 2009 that saw the introduction of bitcoin to these days where we now have numerous altcoins are just the early days of digital currency. Digital is the era we are.

[tora]

1) Almost everything we do has an environmental cost
2) Even buying company stocks that are regulated carries a risk
3) Do not invest in something in which you have no understanding
4) Litecoin and ether can be used if faster speed is important
5) The Establishment want total control

[NeuroticFish]

3. Its complexity means end users find it hard to appreciate the benefits

No complex thing is user friendly at start. This is because the interface is made to be just friendly enough for the ones making the system and the ones having the patience to learn it. Over time the interface becomes more and more friendly.
I expect that soon the average user will have some amounts on some online wallets for every day use via LN and the software/interface to use that will be extremely simple. And the services to fill those wallets will have to become more simple than today.

4) Litecoin and ether can be used if faster speed is important
5) The Establishment want total control

4. That's why lightning network is built on top of Bitcoin. It will allow fast payments for average user.
5. They've lost the start because they are old school and obtuse. They want the earnings without the risk, so for now they play the "Bitcoin will fail" FUD game and fill their vaults. It's not about control. It's about money.

[rodalutor]

All 5 points are truthful and have some merit, all can be countered to an extent at the same time. Realistically it's not saying too much because all things have their positives an their negatives.

1. So does fiat.
2. Granted it does, but all investments carry some risk, regulation will come in time.
3. This will fade with time as things become more simple and understanding continues to grow.
4. They can also be very fast, faster than more traditional payment methods.
5. They do, but within reason the establishment cannot destroy bitcoin. If there is enough will for bitcoin to succeed then it will. Other than being strong armed by banks and such, governments have little reason to want crypto's to fail.

[HabBear]

What are your thoughts?

I'm always skeptical when a business news source is making opinions about Bitcoin or related technology.

1. Bitcoin / Blockchain has an environmental cost

This is a non-event. It's drama made up by the press to sell "clicks". Fiat currency printing operations require electricity, although no one calls that out as a reason to abandon fiat currency. The people who drive the Investment Markets use planes, cars and electricity to conduct their deals and trades, yet no one uses that as a reason to proclaim "we shouldn't use this market!"

2. Lack of regulation creates a risky environment

Sure. But is it more risking than centralizing decision making among a few powerful men and women that can make said decisions using emotion or the influence of personal gain? History provides many great examples of how regulation or laws have spurred human action that has left the financial system in peril. The co-mingling of retail and investment banks, regulation, was one of the drivers of the mortgage-driven financial crisis of 2008.

3. Its complexity means end users find it hard to appreciate the benefits

How many people who use the Dollar or the Euro understand fractional lending that drives our current bank-to-bank financial system? Very few.

Do people need to understand how the internet works to leverage the benefits of an online news site or the use of email? No.

If "complexity" is a reason to not pursue progress we'd still be riding horses, fetch water by the pale, and spending most of our day hunting and gathering for food.

4. Bitcoin / Blockchains can be slow and cumbersome

Yes, absolutely. And this drives innovation, which takes time. That innovation will either occur with Bitcoin (i.e,. the Lightning Network), or view new crypto currencies.

Let's not forget that blockchain technology may take hours to pass a transaction, where the current banking system takes DAYS (and it better not be one a weekend!) to settle a transaction.

5. The “Establishment” has a vested interest in Bitcoin/ blockchain failing

Yes, "The Establishment", like the owners at Forbes has a vested interest in all crypto currencies failing, which is why the produce articles like this that purport so many problems. Their goals to keep people from getting involved and they're using scare tactics (FUD) to do so.

[AjithBtc]

When an user has a clear understanding about the bitcoin /blockchain technology it won't cause a big problem. As blockchain is in its early days of implementation, even a small mistake leads to a big problem. More the knowledge, more will be the good thing happening with bitcoin/blockchain technology.

[tahu takwa]

1) Almost everything we do has an environmental cost
2) Even buying company stocks that are regulated carries a risk
3) Do not invest in something in which you have no understanding
4) Litecoin and ether can be used if faster speed is important
5) The Establishment want total control

agree with your opinion. the point is, everything that we choose certainly has its advantages and disadvantages.

[fabianji]

What are your thoughts?

I'm always skeptical when a business news source is making opinions about Bitcoin or related technology.

1. Bitcoin / Blockchain has an environmental cost

This is a non-event. It's drama made up by the press to sell "clicks". Fiat currency printing operations require electricity, although no one calls that out as a reason to abandon fiat currency. The people who drive the Investment Markets use planes, cars and electricity to conduct their deals and trades, yet no one uses that as a reason to proclaim "we shouldn't use this market!"

2. Lack of regulation creates a risky environment

Sure. But is it more risking than centralizing decision making among a few powerful men and women that can make said decisions using emotion or the influence of personal gain? History provides many great examples of how regulation or laws have spurred human action that has left the financial system in peril. The co-mingling of retail and investment banks, regulation, was one of the drivers of the mortgage-driven financial crisis of 2008.

3. Its complexity means end users find it hard to appreciate the benefits

How many people who use the Dollar or the Euro understand fractional lending that drives our current bank-to-bank financial system? Very few.

Do people need to understand how the internet works to leverage the benefits of an online news site or the use of email? No.

If "complexity" is a reason to not pursue progress we'd still be riding horses, fetch water by the pale, and spending most of our day hunting and gathering for food.

4. Bitcoin / Blockchains can be slow and cumbersome

Yes, absolutely. And this drives innovation, which takes time. That innovation will either occur with Bitcoin (i.e,. the Lightning Network), or view new crypto currencies.

Let's not forget that blockchain technology may take hours to pass a transaction, where the current banking system takes DAYS (and it better not be one a weekend!) to settle a transaction.

5. The “Establishment” has a vested interest in Bitcoin/ blockchain failing

Yes, "The Establishment", like the owners at Forbes has a vested interest in all crypto currencies failing, which is why the produce articles like this that purport so many problems. Their goals to keep people from getting involved and they're using scare tactics (FUD) to do so.

Yes I agree and I thought about even reading it, but a) Forbes has published some well balanced articles on the subject in the past and b) most beginners in the space will be very likely confronted with all of those "arguments" by their friends.

On the five points everyone here in this forum is pretty much on the same side - understandably.

[bitcon]

I agree with all the points that are mentioned. But the most annoying characteristic it is the complexity and as a result the slow transactions and mining. More coins are produced more difficult it become to operate them.

[fabianji]

I agree with all the points that are mentioned. But the most annoying characteristic it is the complexity and as a result the slow transactions and mining. More coins are produced more difficult it become to operate them.

Initiatives such as improved technology (lightning network, etc) as well as hardware (moose's law) will provide some relief there.

[TERA]

I do not agree with one of the points. Regulation by the state can only spoil bitcoin. This will affect the cost. There will be taxes. There may be illegal activity here. But it is everywhere. Both on the Internet and in the real world.

[TERA]

When an user has a clear understanding about the bitcoin /blockchain technology it won't cause a big problem. As blockchain is in its early days of implementation, even a small mistake leads to a big problem. More the knowledge, more will be the good thing happening with bitcoin/blockchain technology.

The user must understand the technology. Otherwise, it is better not to approach even the world of crypto-currency. Not possessing sufficient knowledge, he runs a lot of risk.

[Livewildeatwild]

Those points are a stretch across the board, and very easily argued against. Not to mention they're all actively being addressed by innovation and alt coins.

[buytheeffinD]

Overall not some bad points you made, but there isn't anything there that hasn't already been overcome or won't be overcome in the future!

1. Bitcoin / Blockchain has an environmental cost. Response: Obviously how else is Bitcoin going to be mined and secured? The cost used for this however is less than idle phones, computers, tablets in the world. There are higher energy consumption problems out there, Bitcoin isn't the worst.
2. Lack of regulation creates a risky environment. Response: Of course it does but over regulation would stifle the progress we are making here, and we don't want that either.
3. Its complexity means end users find it hard to appreciate the benefits. Response: Perhaps, but this is why the onus is one us to help those who do not currently understand. Education is paramount here!
4. Bitcoin / Blockchains can be slow and cumbersome. Response: Not anymore, you seen the mempool the last couple of weeks? It is as cheap if not cheaper than Bcash currently. Can send 1 Bitcoin for 15 cents.
5. The “Establishment” has a vested interest in Bitcoin/ blockchain failing. Response: Sure it does, but they would stand to gain more if they invest and it suceeds (hint they are already doing this!)

[Nexigen]

The main problem is that it is still unknown to which class it belongs. To what class of acts. There is no legal basis for this phenomenon so far. And he is either accepted or denied as a currency.

[Nexigen]

I do not agree with one of the points. Regulation by the state can only spoil bitcoin. This will affect the cost. There will be taxes. There may be illegal activity here. But it is everywhere. Both on the Internet and in the real world.

I think that it is better to accept and determine what kind of asset this is. For this to happen, the state must take some action. Otherwise, the crypto currency will remain more than fantastic for most people.

[fabianji]

I do not agree with one of the points. Regulation by the state can only spoil bitcoin. This will affect the cost. There will be taxes. There may be illegal activity here. But it is everywhere. Both on the Internet and in the real world.

Well in the very unlikely case of strict regulations by all or the majority of countries that is actually the worst threat to bitcoin. If countries make exchanges illegal then you can buy or sell bitcoin (exchange it against fiat) and some countries are even attempting to restrict the online use of bitcoin. That would certainly be the end of bitcoin and cryptocurrencies.

[jseverson]

Although its potentially revolutionary applications are apparent once one has made the effort to understand the principles of encryption and distributed ledgering behind blockchain, it takes a while, and a good bit of reading, before the “man on the street” can see what makes blockchains potentially so useful. Tech pundits talk about replacing the middle-man facilities traditionally provided by the financial services industry – such as clearing payments and fraud prevention. But as far as many are concerned, banks provide this service adequately well, at an apparently low cost to the end user.

What it fails to mention is that not everyone has access to banking services thanks to all the red tape that surrounds them. Even those that do have access to their services have to go through a bunch of red tape. Bitcoin addresses these problems by putting you in control of your own money. I do understand that not many people have any problems with the banking system though, so it's true that adoption on this end could take a while.

Either way, the article does make good points, but it seems a little one-sided. Then again, I guess it's supposed to highlight problems (and potential problems), which it does do.

[fabianji]

Although its potentially revolutionary applications are apparent once one has made the effort to understand the principles of encryption and distributed ledgering behind blockchain, it takes a while, and a good bit of reading, before the “man on the street” can see what makes blockchains potentially so useful. Tech pundits talk about replacing the middle-man facilities traditionally provided by the financial services industry – such as clearing payments and fraud prevention. But as far as many are concerned, banks provide this service adequately well, at an apparently low cost to the end user.

What it fails to mention is that not everyone has access to banking services thanks to all the red tape that surrounds them. Even those that do have access to their services have to go through a bunch of red tape. Bitcoin addresses these problems by putting you in control of your own money. I do understand that not many people have any problems with the banking system though, so it's true that adoption on this end could take a while.

Either way, the article does make good points, but it seems a little one-sided. Then again, I guess it's supposed to highlight problems (and potential problems), which it does do.

That is a good point and just adds to the list of unique benefits of bitcoin in particular and blockchain in general. It even goes further to cover identity management that can help empower people in regions where the majority of citizens are not in possession of any documents so even if they had access to banks could not open an account. In this case bitcoin helps in two ways to provide access to financial instruments but also to a digital identity for purposes beyond financial transactions.