Before anyone jumps up and
thinks that I have become a Bitcoin expert, let me put you to rest. I am a
student of Blockchain and its revolutionary applications in the financial
world. And during this course of learning, and learning with an infatuation to
educate myself, from time to time I notice things that are absolutely flawed.
Just as all innovations in the beginning need improvement, so does the product,
Bitcoin. Blockchain is not a product so the topic here is not Blockchain.
I write this article as a novice student with an aim of learning from the experts.
Point One: Slow Speed.
One of the most important factors of any crypto currency is the speed at which it is transferred, rendering a transaction complete. In the beginning we were all awed by the only fact that Bitcoin is a medium of exchange. But once we digested this new phenomenon and other crypto currencies on Blockchain popped up, the attention went towards the speed and the awe was subsided. Bitcoin requires, if safety measures are to be taken into consideration, almost 600 seconds for settlement. This is going to be a problem in the future as much faster transactional technologies are being developed.
Point Two: Not So Decentralized
The word decentralized has become such a buzzword that we have fallen for the concept without evaluating the concept in depth. Of course Blockchain is decentralized. Is Bitcoin decentralized completely ? Not in my view. Decentralization comes in when nobody can control the outcome of a transaction, create any hindrance, or effect the speed or bring it to a halt. Most of the transactions are processed by a few number of Chinese miners. If by any luck of the draw, Chinese government seriously clamps down on these miners, which at times it does, then the entire process will be disturbed to a major extent. There is no mechanism in place in case if the miners in China go off line. If that is to happen, the price of Bitcoin will crash within hours to its lowest prices.
Point Three: Unlimited Forks
Forks upon forks upon forks upon forks. Bitcoin can have as many forks as we all wish it have. This is absolutely not a good thing. It erodes confidence. Diminishes trust. Evaporates value. And serious issues of network security keeps popping up.
Any protocol level changes in Bitcoin code base solely depends on a hard fork. This is a disaster in the making in the world of ever changing and ever upgrading technological innovations.
Point Four: Why Priced In Dollar ?
The whole point, as I understood it to be, with the invention of the Bitcoin, was to challenge the monopoly of the Fiat money. Specially the Dollar. Perhaps to kill the choking stronghold of the Dollar on the world transactions. Who would in the right mind would cure cancer by smoking Cigars ? And by the same token, why would you Peg Bitcoin with something (Dollar) that you are trying to kill the monopoly of ? This question leads me to even question if Bitcoin itself is created by the futuristic monopolists of the Fiat world themselves, the financial mafia. Satoshi Nakamoto would have never done this, if you read the White Paper of Bitcoin, you would realize that.
These are just some simple observations I have. I could be absolutely wrong and might need further guidance from the experts. I invite an open debate from the readers with a view to enhance our understanding.
Author: Mir Mohammad AliKhan