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Bitcoin is a decentralized cryptocurrency that does not require the regulation of banks and other financial institutions. However, this virtual asset has a peer-to-peer payment system. Since its inception, this digital money has become an asset class that is not only a store of value but also a medium of exchange.
More so, this digital asset has an underlying technology known as the blockchain, attracting many investors because many view it as an essential foundation technology for the future.
But from a payment perspective, some issues with this digital currency have come up, limiting its use for daily transactions. Here is what hinders this digital currency use for everyday transactions.
Limited Use
Well-established companies like Starbucks and PayPal have adopted this digital currency into their payment system. Therefore, only a few companies accept this digital currency as a viable means of payment. In addition, these digital money users can use their currencies in tourism, where a few airlines accept Bitcoin payments. However, this digital currency has limited use cases for daily transactions.
On the contrary, you can use this digital money to purchase a product via a reliable exchange like BitQT. Therefore sign up for an account in the crypto exchange and transact Bitcoin safely.
Bitcoin is Still New
Satoshi Nakamoto launched this digital money thirteen years ago, meaning it has been around for quite a short period compared to traditional currencies, which have been available for many decades. Furthermore, this electronic money has faced many challenges during its thirteen years of existence, making people question if it is here to stay. Nevertheless, people should approach this digital currency carefully and invest wisely. However, this digital money is still new, limiting its use for daily transactions.
Decentralization
This virtual asset is entirely decentralized, meaning the government or Central Bank cannot regulate its operations. Also, this digital asset cannot be taxed, making it an enticing investment. On the other hand, lack of taxation could lead to problems should Bitcoin pose as competition with government currency. Most investors prefer investing and using money that has a stable value, such as traditional currencies. So, the lack of a regulatory body limits the use of this digital asset for daily transactions.
Slow Transactions
This virtual asset uses blockchain technology to verify and process seven transactions per second. Considering the millions of people using this digital money, seven transactions per second is extremely low. However, if you want your Bitcoin transaction to take the least time and be in front of the queue, you will be required to pay higher fees. Due to the slow transaction time for transacting using this digital money, many people do not use Bitcoin for daily transactions.
Volatility
Bitcoin is notoriously volatile, with price fluctuations that happen from time to time. For instance, this digital money hit its all-time high in 2021 and crashed in 2022. Also, in 2017, the value of this electronic money fluctuated between $1000 and $ 20,000. These big price swings make this digital money unattractive for daily transactions.
High Transaction Fees
This electronic money transaction can be expensive because if you want miners to process it quickly, you must pay higher fees to hasten your transaction. Also, the average Bitcoin transaction cost is $1, while it was $40. The high transaction fees make Bitcoin unattractive for daily transactions.
Conclusion
The above factors may not be problematic, but they hinder the use of this digital currency for daily transactions. However, this digital money is by far the most successful cryptocurrency.