Should You Still Be Skeptical When It Comes To Bitcoin?

Last Thursday, the bubble surrounding the value of bitcoin finally burst. The market corrected itself, as it does after a bubble, which ended up dropping the value from an all-time high of $2,791.69 to $2,267.73.

While the bubble was not unexpected, the drop in value is (predictably) raising questions about its validity amongst skeptics. The total price drop from this bubble burst was about 18.7%, but bigwigs in the bitcoin world are actually not concerned about this. “The correction was actually quite brief,” said CEO of BTCC, Bobby Lee. “The prices today are still higher than that of a week ago.” BTCC is one of the largest bitcoin exchanges in the world, located in Japan.

Despite the seeming nonchalance of many in the BTC world, there are still some major doubts about whether or not bitcoin is a sustainable currency and if it has what it takes to become a full-time investment. Investment experts point out several key factors that have them remaining skeptical of the cryptocurrency’s permanence in the financial world.

One of the biggest concerns investors have about bitcoin is its safety. The cryptocurrency is a favorite of hackers. From attacking markets to holding accounts hostage, hackers have been bringing down the value of bitcoin almost since its beginning. They’ve already crashed multiple exchanges. Even if they don’t go after the exchange itself, the ransomware attacks that happened in earlier in May show that personal wallets are under attack as well. Without a way to back up stolen funds, it leaves even those with steel stomachs wary of investing in the digital currency.

Another concern that people have is the volume of bitcoin transactions that have not been processed. It is taking longer and longer to process blocks, the chunks of transactions that make up the blockchain technology that bitcoin runs on. Miners are taking longer and to compensate, the processing fees have grown to astronomically high prices. With each hike in fees, in addition to the time it takes to process the transaction, business owners are less and less inclined to accept bitcoin payments.

While litecoin, a similar cryptocurrency, has successfully begun using SegWit technology that creates a safer, faster way to process transactions, only a small percentage of the BTC community is willing to accept it. A few businesses have agreed to speed up transactions, but without full consensus, it can be very hard to speed up the overall time it takes to process transactions.

And finally, most people are worried about bubble bursts and the overall volatility of a currency that is not backed by a government or something physical. Arguably, this year’s burst was small. Like Bobby Lee said, the price it is now is still higher than it was in previous weeks. But it doesn’t always work out like that. In 2013, the bubble burst and sent prices plummeting into a hole that it didn’t climb out of for more than two years. Just this year, BTC fell from a then high $1200 to under $900 because the SEC made a decision. Many people find it hard to feel confident investing in something that can so easily rise or fall. Its volatility makes it a great source of instant turnover, but as a sustainable currency, volatility isn’t something to be desired.

With all the naysaying, you might think that BitcoinReview.com is trying to dissuade you from investing in bitcoin. But I am not. I am far from a financial expert. It just seemed pertinent to point out the legitimate concerns that many people have made since the most recent bubble burst in the bitcoin market. That being said, it’s up to you to decide whether bitcoin is what you want to invest in.