Major problems with bitcoin

If I tell you that our traditional currency system is better than bitcoin, ik you won’t believe me. Some of you will argue that BTC is anonymous & decentralize etc etc. All of these facts are the same as Oppo or Vivo’s marketing statements( with 12 hr long battery ).

Let’s discuss some of the main issues with bitcoin. I’m not an expert in this field, just discussing here what I understand.

(WARNING: Don’t read it’s a cringefest down below with lots of spelling and grammatical mistake this is a pre-alpha version of my writing if you want to read then read it at your own risk)

Issues:

– TPS (transactions per sec)

– Anonymity

– Decentralization

– Transaction fee

TPS : Every 10 min. a block is published. Complexity adjusts itself so the time will be always around 10 min. Blocksize is limited to 1M bytes per block. If we roughly take 250 bytes/transaction. We get around 7 tps (do the math). So what?

VISA handle about 2000 tps & up to 10k tps on Christmas or some other special days. 7 tps is not acceptable at all.

• Anonymity :

Anonymity means Pseudonymity + Unlinkability.

Different interactions of the same user with the system should not be linkable to each other. For example, 

Reddit: pick a long-term pseudonym.

4chan (RIP;-; ): make posts with no attribution at all.

Why is unlinkability needed?

– many BTC services use real identity when paying + linked profiles can be deanonymized by a variety of side channels.

Bottom-line: blockchain-based currencies are totally, publicly & permanently traceable. without anonymity, privacy is much worse than traditional banking.

• Decentralization :

There is no authority control over bitcoin so it is decentralized, right?

Not exactly. Bitcoin was supposed to be decentralized but then there is something called mining pool. Groups of miners, mine for the pool & profits are distributed according to the rules of the mining pool. This encourages centralization.

In 2014, GHASH.io (china based mining pool) exceeded 50% of mining power. With that much power variety of attacks are possible like Goldfinger attack, forking attacks, etc.

• Transaction fee:

What is the transaction fee?

• The creator of the transaction can choose to make an output value less than the input value. The remainder is a transaction fee & goes to block the creator.

Purely voluntary, like a tip.

Bitcoins are limited, 23M total. There will be no bitcoins to mine by 2040.

So after that miners will have only a transaction fee to earn.

As we all know humans tend to be selfish & greedy by nature, & miners are humans too -,- 

Transactions will be prioritized according to transaction fees.

“You need to pay more if you want your transaction to be included in the block” -_- I’ll use PayPal instead.

No hate for bitcoin xD peace 😉