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Bitcoin, the world currency? That remains a dream until these 4 things happen

Bitcoin, the world currency? That remains a dream until these 4 things happen

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The path to mainstream diffusion is slow and arduous with every new technology. Bitcoin too. However, the following four factors could speed up the process.

The spread of Bitcoin and crypto has certainly reached the fastest pace in recent years. The epic rally certainly helped at the end of 2017, when suddenly digital assets were everywhere in the mainstream media.

However, a few things still have to happen before BTC can really be accepted by the general public. A recent medium article in ‘The Startup’ identified four challenges that Bitcoin must overcome before it can really go mainstream.

Shorter confirmation times for Bitcoin transactions

The Bitcoin network must be able to process almost instant transaction validations to be a viable peer-to-peer currency. According to the report, it is “inconceivable for a trader to have a customer wait ten minutes before the bitcoin transaction is fully validated.”

If the network becomes overloaded, this time can increase dramatically, which is also disadvantageous in times of market volatility.

The Lightning Network was developed to solve this problem with micropayment channels. However, there is still a long way to go.

More transactions per second

Bitcoin currently only supports about seven transactions per second. This is far from what would be required if everyone used it. At the beginning of last year, the TPS rate was approaching a high, but it is still far from Visa, which currently supports 24,000 transactions per second.

At 15, Ethereum’s maximum TPS is about twice that of Bitcoin, but that too is still far too slow for everyday use. Ripple is better at around 1,500 TPS for XRP, but the token has centralization issues .

Again, advances in the Lightning Network could bring Bitcoin back into play in terms of transaction rates.

Reduced fees for high volumes

The report also notes that mining fees need to be reduced for practical use. Currently, the report validation fee for a transaction is around $ 0.3, but it doesn’t depend on the size of the transaction.

Fees increase as the transaction volume increases during the network’s peak hours – such as $ 30 for a transaction in late 2017. This is totally impractical for mainstream distribution, which will result in massive volumes that are even larger than the current all-time highs.

Decentralization of bitcoin mining

The centralization of Bitcoin mining is currently a big topic. China accounts for about two thirds of the total hash power in the network, so it could actually exercise some control over it.

Bitmain, the Chinese mining hardware manufacturer, also controls some of the largest mining pools, adding to centralization concerns.

There is concern that Bitmain may be able to manipulate the network by taking control of more than 51% of the hash rate. However, it is not in the company’s interest to jeopardize its earnings.

Mining farms are emerging outside of China to mitigate this problem, but hardware vendors remain centralized.

The main cryptocurrency faces these and many other challenges before it can replace the current financial system as a truly decentralized form of digital money.

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