Why Are Companies Slow to Adopt Bitcoin?
Bitcoin is one of the most popular trending topics around the world. This digital currency is an unregulated cryptocurrency formulated in 2009. Satoshi Nakamoto designed this digital currency to work as a medium of exchange using cryptography to protect the transactions, regulate the creation of additional units and ascertain the transfer of assets. If you will be interested in trading Bitcoins, you may consider using Immediate Edge as your trusted trading platform.
Bitcoin remains atop the list of notable cryptocurrencies. However, the technological improvements of other cryptocurrencies are gradually eroding its lead. Among the issues with the attempt to back the correct digital currency is that there is no barrier to entry for the competition. On the other hand, there are significant reasons why companies are slow to adopt this virtual currency. Here is why.
Value is Unstable
This electronic currency is a hazardous store of value because its significance transitions daily by one to 3% daily, which can be considerable when seen over a month or over. An example of this is when this digital currency hit a high of $1,150 in November 2013, the price of one BTC dropped to $500 by mid-mid-December; it did not recover for four years. More so, it hit a $19,000 value in late 2017, only for it to drop at a rate of 83% and to fall back to $ 3,200 twelve months later. In April 2021, it reached $63,000 and bottomed at $29,000 in July. Moreover, in November of 2021, it rose to $67,000.
Most investors do not want investments in dominated currencies with dramatic price swings. If you purchase this digital currency and its value increases or decreases, you can’t be sure it will double the next time.
Transaction Processing Speed is Slow
The slow speed of Bitcoin transactions is another shortcoming of companies that are stagnant in adopting this digital currency. The processing is slow to safeguard the security of the blockchain technology that makes this digital currency so secure.
In the end, there are thresholds on the sum of daily transactions making even acceptable transactions take days. On the contrary, blockchain takes seven transactions every second. In the end, the more the users surge, so will the extent to process these transactions. As a result, the slow processing speed of digital currency transactions is a significant deficiency of scalability. What’s more, Bitcoin is pretty sluggish than other cryptocurrencies.
High Transaction Fees
Earlier on, pact fees were not a piece of the existing system. However, as this digital currency has evolved over the past years, users are compelled to wait longer. Hence, as their transactions on the blockchains increased, transaction fees rose as a means to authorize users to change course to the head of the line. While this may aid a limited number of people, it does nothing to handle the situation of processing speed and the tremendous amount of energy expected for this digital currency transaction. More so, while the fees may help prioritize some operations, the costs independently may generate most transactions impractically.
Most companies are also worried about getting into Bitcoin because everyone else seems to be. Some financial institutions are also unsure about this digital currency because of Its decentralized nature meaning there is no central authority. Consequently, there are no intermediaries or regulatory bodies involved in the process.
There are a lot of reasons why many companies are slow to adopt this virtual currency. The issue of its value being unstable is among the main reasons.