Bitcoin since the advent of faced many problems. These include the speed of transaction confirmation, the lack of proper level of confidentiality and high commissions. With the growth in popularity of cryptocurrencies some of its features have led to the emergence of congestion, could affect the future outcome of the development of the industry coin. Let’s see, what are the typical problems the first cryptocurrency.
The speed of Bitcoin transactions
The current architecture of the Bitcoin network is able to cope with no more than seven transactions per second. For comparison, the card network operator Visa can handle huge 24 thousand transactions per second. Accordingly, with the influx of users of the Bitcoin network starts to work slower.
The problem of speed is compounded by technical characteristics of the Bitcoin blockchain, so as new blocks appear in the chain once, about ten minutes. Although sometimes the creation takes much more time.
Accordingly, the network cannot handle the transaction in the usual pace with the growth of loads. It's just technically impossible.
On the idea of the Creator of Bitcoin Satoshi Nakamoto is supposed to help prevent fraud in the network. Each block is placed around two thousand transactions, so the queue of uncommitted transactions – it is common for the owners of bitcoins.
The privacy of cryptocurrencies
Bitcoin is only partially anonymous. Experts call it pseudoanonymity.
Since all transactions are public, due to the relatively shallow analysis of the transactions in the blockchain can be mapped to active individuals or entire companies.
How? With the help of web trackers and so-called cookies are small pieces of code that your device will be downloading to local storage when you visit the websites. Such scripts enable site owners and third parties like advertisers to read what you were doing on their resources.
After someone receives this information, it will be able to trace your activity on the blockchain of Bitcoin, examining what you spend your money.
Some cryptocurrency exchanges also require you to pass the procedure of identification (KYC) — this is when you need to take a picture of your document and share the. If these databases are hacked, and that happens, attackers can gain critical information about you.
The fee in Bitcoins
Since the space in the block is limited, and the network involved so many miners, users are forced to pay a Commission, which stimulates miners to confirm their transaction before the others.
And given the periodically increasing the queue the transaction for processing, payers are willing to inflate cost for the transaction, only to attract the attention of the miners to their payments. Usually the sender pays the same Commission irrespective of the transfer amount, be it 5 or 50 thousand dollars. Accordingly, too high a minimum fee makes Bitcoin unsuitable for everyday payments like buying a coffee in the morning. In this case, the Commission can be at the level of the payment amount.
By the way, the size of mempool — that is, the queue of unconfirmed BTC-transaction — especially significantly increases with the increasing Bitcoin exchange rate. Take a look at the chart below. Bullrun at the end of 2017 has provoked an increase in the number of operations, because market participants wanted to buy or time to sell coins. It, therefore, became the cause of the increase in transaction fees, because the first section contains the operations with the highest commissions.
If one person or group of persons and companies together control more than half of the computing power of the network any cryptocurrency, they may wish to rewrite the history of the blockchain. The event is known as the 51% attack. The attacker could spend the same money twice.
Just note that we hardly ever see a successful 51% attack on Bitcoin. In theory it is possible, but in practice any attempt will be a trivial loss of money due to rent capacity. Today, Hasrat of Bitcoin — that is, the sum of all computing power of the miners in the network is unbelievable. To compete with it will not work.
The Forks Of Bitcoin
Because of the equality of participants in the network of the Bitcoin community around the cryptocurrency often cannot agree. Because of this, how would blockchain is duplicated and divided in two, giving rise to new cryptocurrency.
Read on: What is hardwork? Explain on the example of Bitcoin Cash.
In the case of Bitcoin there have been many so-called hardforum. For example, from the first cryptocurrency was ottorgovalis coins under similar names Private Bitcoin, Cash Bitcoin and Bitcoin Gold.
In theory the forks of Bitcoin allow you to make a better coin that BTC will shift with the first line of a world rating. Although this has never happened before. And despite the presence of the possibility of forks, a community of Bitcoin developers are constantly working on new solutions.
To date we have already released several additions and improvements of Bitcoin, the cryptocurrency which help to run faster and more smoothly. One of the most discussed projects was SegWit and Lightning Network. They helped to increase the number of transactions in the network and thus reduce the fee that collect miners.
One thing is clear for sure: the blockchain with us for a long time. And here is what the vector of development will take Bitcoin is impossible to say definitely.
The current rate of coins is in the class ranking cryptocurrencies, and in our cryptodata experts will discuss other problems of Bitcoin.
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