Bitcoins and the Administrative Issues Hampering Its Progress

What's Interrupting Bitcoins Progress?

The dramatic increase in the online use of the highly regarded crypto-currency – Bitcoins, has left critics and analysts speculating Bitcoins will overtake traditional currencies in mainstream economics and they have opinion the day is not far in the future. However, at present, there are some major issues this currency system faces that can interrupt its progress.

Problems Bitcoin currency system is facing currently:

Complexity: There is no doubt that Bitcoin currency system is exorbitantly complex. This is an immense hurdle to overcome, if the common people are not able to understand the basics of this currency, and if they are not able to trust Bitcoins, the extent of usage will be limited to only the tech-savvy enthusiasts.

Lack of authenticity: If Bitcoins is to replace current monetary systems, it will need to be approved and endorsed by established financial institutions, economic policy makers and government bodies. This is the only way authenticity of Bitcoins will be accepted by the general masses.

Lack of extensive development endeavors: At present, the development of Bitcoin currency system is powered by only a handful of core developers, most of who work with total anonymity as legal actions are pursued against them. Such news further deepens the crisis trust issues is creating and working against this new currency. The open-source structure of the currency system promotes the decentralized ideals Bitcoins are based upon, but it also means Bitcoins are currently supported by varied coders and there is no single established institution working to further develop Bitcoins as a flawless currency system.

Complications regarding Bitcoin mining: Bitcoin mining is one of the revolutionary concepts associated with the currently emerging crypto-currency. But this feature has caused many problems pertaining to security breaches and manipulation attempts. In this process, miners connect in a peer-to-peer network to collate all the transactions happening within their allocated block that helps keep the global block ledger up-to-date. The miners are financially compensated for taking part in this process. While it is a good automatic process of keeping track of legitimate and erroneous transactions, it cannot be denied that coders with sufficient knowledge can breach the mining system and manipulate the whole process to gain illegal financial profits.

In spite of all the above mentioned problems, there are investment firms who anticipate growth and stability in this currency system. This is the reason Bitcoin Investment Fund and Pantera Bitcoin Advisers, funds managed by Alternative Currency Asset Management (subsidiary of Second Market Holdings) and Pantera Capital respectively, have been made available to investors with considerable capital might. The Securities and Exchange Commission is currently reviewing the possibility to launch a Bitcoin based ETF for the general public, identified in the SEC Form-1 Registration Statement as The Winklevoss Bitcoin ETF.

ETFs based on Bitcoins will promote the Bitcoin currency making it accepted and recognized among the public masses. But it will not help Bitcoin currency system directly. So even if the Bitcoin based ETFs become the new investment sensation, the currency system will need to sort out the impeding issues on its own if it envisages being the mainstream exchange medium.