Warning: Due to extremely high media demand, we will close registration as of DD/MM/YYYY - HURRY mm:ss


What Is Bitcoin Used For?

Bitcoin Revolution - The Constraints of Bitcoin as a Business Currency

The Constraints of Bitcoin as a Business Currency

Bitcoin was designed as a method of performing digital, coequal transactions. At this point, however, the tech is not accessible. It is dependent on proof-of-work, a technique used to verify that a deal happened.

The advantage of using this method is that Bitcoin network users do not require names or conviction. Also, they are not reliant on third parties as to the central authority that has an ultimate say on a deal.

However, the benefits come at a rate of speed, as the Bitcoin network can only handle seven dealings per second. For more information on the particulars of the proof-of-work speed matter, click here.

Besides, every ten minutes, a block of transactions (blockchain derivative) is confirmed. However, the issue is that the block is only huge enough to fit so many dealings. For instance, you are making a purchase at Starbucks with Bitcoin. Your coffee acquisition is placed on the next batch and is confirmed under ten minutes if they're kind enough just to take one proof.

Otherwise, if there are numerous dealings before you, your coffee transaction may not make it into the next batch. Thus, your purchase is queued up for the subsequent batch. This queue is referred to as the mempool. Therefore, you have to wait for another twenty minutes, and without a guarantee.

There are, however, risks linked with just accepting one proof. But we will not look deep into that in this case. All being well, by now, you understand the point. Also, I hope that you can see how incumbering it will become even to purchase a cup of coffee using Bitcoin.

However, if you transact on federal exchanges, you may think that Bitcoin speeds are near-immediate. It’s an illusion. Here, the entire Bitcoin is stored in one location. That is, my Bitcoin and yours are together. Based on every trade, the exchange only manages a record and deducts a record of the Bitcoin you hold. Thus, the Bitcoin maximalist’s argument that you don’t actually own it lest you pocket it. So, you’re open to risk if it’s on an exchange.

One day, the exchange might vanish with all of your coins. Or, it may just flat-out refuse to offer you the coins you acquired.