Within a few years since Bitcoin was created, it has managed to gather an army of supporters. These supporters are convinced that Bitcoin has the potential to revolutionize the current financial system.
Nonetheless, there are still many people who hate the concept of bitcoin and have sworn to never invest in the asset. Below are five reasons why many people hate bitcoin.
Five Reasons Why People Hate Bitcoin
- The anonymity of Bitcoin’s Creator
Bitcoin was created by an unknown person or group of persons under the pseudonym Satoshi Nakamoto. The anonymity of Bitcoin’s creator is often the main reason why many people dislike the cryptocurrency.
Many people feel that they can not trust a technology developed by someone they do not know. Therefore, they discard the cryptocurrency’s merits.
However, it is important to note that the anonymity of bitcoin’s creator does not affect the performance of the digital asset in any way. This is because bitcoin’s source codes are open source and can easily be verified by anyone on the blockchain.
The anonymity of Bitcoin is also the main reason why it is so successful. The consensus mechanisms put in place ensure that operations carried out on the blockchain satisfy the interest of every participant.
- Bitcoin’s Intangibility
Many people argue that since bitcoin is not backed by any tangible asset, it has no intrinsic value. The notion is that intrinsic value can only be attributed to physical assets.
Gold is often used as a case study when issues regarding intrinsic values arise. Although bitcoin has many of the properties of physical gold, earning it the nickname “digital gold”, it is not backed by any physical asset and is perceived by many people as lacking intrinsic values.
However, since value is quite subjective since it can be determined by the opinions of people, there is always a high demand for anything deemed valuable by a lot of people.
With that in mind, it will be unrealistic to view bitcoin as an asset that lacks intrinsic value simply because it is not backed by anything. Although bitcoin is intangible, it has a lot of very valuable use cases.
Bitcoins value lies, not in any physical asset, but its utility, network, and adoption. Bitcoin users do not have to go through intermediaries or wait in long lines to complete transactions. Bitcoin can be sent from one end of the world to the other end in a matter of minutes, if not seconds, at incredibly low charges.
Bitcoin transactions are immutably stored in the blockchain ledger which is open and can be verified by anyone on the blockchain. Its scarcity, which is fostered by the fixed supply of 21 million coins, protects it from the risks associated with inflation.
- Bitcoin’s Extreme Volatility
Volatility is perhaps the major reason why so many people hate bitcoin. The sudden and unexpected changes in the asset’s price are the reason why many people have labeled it a scam.
Bitcoin’s price can quickly rise to high peaks. Investors basking in the euphoria of making profits may be left scratching their heads in losses only a few hours or minutes later. No secret trading tips can protect investors from this tricky Bitcoin feature.
However, it will be unreasonable to judge the credibility of an asset based on its volatility. Any asset traded on a public market is often affected by market dynamics – the forces of demand and supply – and bitcoin is not an exception.
- Use of Bitcoin For Illicit Activities
This is one of the most prevalent reasons why many people hate the idea of investing in Bitcoin. Some bad individuals in the cryptocurrency industry have taken advantage of bitcoin’s anonymity to commit a lot of crimes.
Bitcoin has been used to fund terrorist attacks, purchase illegal drugs, and money laundering. Since the identity of the participants conducting transactions on the blockchain is anonymous, they can not be traced to the individuals involved.
However, the activity of a small number of bad eggs in the industry should not be used to evaluate the credibility of the entire cryptocurrency industry. There are several beneficial use cases of bitcoin that overshadow these nefarious activities.
- Poor Regulation and Network Security
Although bitcoin and cryptocurrencies, in general, are not the only assets to experience security issues, bitcoin hacks leave users with little to no chances of ever getting their funds back.
Since bitcoin is decentralized, without the need for any central authority, the activities going on in the blockchain are not regulated. This is a huge turn off for many people.
Without any centralized authority to monitor affairs, individuals with questionable intents make use of the network and defraud millions of people. Many of the most popular internet hacks had been carried out on Bitcoin exchanges, resulting in huge losses.
Although Bitcoin has a lot of beneficial use cases, it will always be perceived negatively by those who are ignorant of its potential. It is therefore left for all those in the crypto industry to change people’s negative perceptions of Bitcoin and cryptocurrency in general.
By bringing the usefulness of Bitcoin to the fore and fishing out the bad eggs in the industry, these negative views can be corrected.