It’s not surprising to learn that Bitcoin technology has some technical flaws. What’s in operation today is just the prototype of the intended innovation. If you want to get started with Bitcoin trading then check http://bitalphaai.de/
It’s impossible to make something that’s 100% perfect. Remember, most of the best systems in use have an efficiency of about 95 to 97 percent. This concept is genuine even for Bitcoin technology. The anonymous group that developed BTC made some design mistakes that could cause problems.
While some errors don’t threaten the proper functioning of the cryptocurrency, others are potentially dangerous. So, we might begin seeing some of the challenges associated with Bitcoin’s design mistakes. This piece explains in detail the three most critical flaws Bitcoin developers made.
Reading the article will also allow you to discover ways the industry can use to address some of the errors. But before jumping in, you must note that Bitcoin shouldn’t have been approved fit for use in the first place. What’s there today is just the prototype.
Tech development principles require prototypes to act as testing and correction tools before releasing the most stable version. However, we can’t do much now because Bitcoin is already in use and is the largest and most successful cryptocurrency in history. Let’s take a quick look below for more details.
A Faulty New Coin Creation Mechanism
The mining process is responsible for adding new Bitcoins into circulation. And this occurs when millions of users registered on the BTC network send or receive funds. Miners working around the clock worldwide confirm and record the transactions on the blockchain for references.
Bitcoin miners get a machine pre-determined amount of coins as compensation for their commitment. Additionally, the reward pays for the resources they use during the process. The block reward constantly diminishes by half every four years in a process called HALVING.
It means it will reach a time when miners will get very little for their hard work. As a result, they may ditch the platform and induce an operational crisis. Remember that you can’t conduct any transaction on the Bitcoin network without miners. So, this reveals just how much dangerous this design flaw can be.
The other critical problem with Bitcoin’s new coin creation mechanism is that it isn’t natural. For long-term reliability, financial experts argue that the rate at which new Bitcoins get into the system should depend on demand. For example, the program should respond to the high request by adding more coins to the market and vice versa.
Restricted Number of Minable Bitcoins
Satoshi Nakamoto, the unidentified group of programmers that created Bitcoin, set a maximum number of minable coins. The number can’t go beyond 21 million, and at least 19 million coins are already in circulation. BTC would have been a better financial system alternative if the total number of coins was open-ended, depending on the prevailing economic forces.
Unfortunately, we might experience a potential shortage of Bitcoins once miners produce all possible coins. This excellent cryptocurrency loses big on this aspect as the traditional options can do better. For example, the respective Central Banks would print more money if there’s less and less if we have more.
Relatively Lower Security
The blockchain network on which BTC runs has received numerous praises regarding its security features. It’s one of the most secure network solutions available in the world today. However, it has various loopholes, making it less safe than the conventional options.
The decentralization that makes Bitcoin a game-changer also somewhat weakens its safety standards. For example, regulating or monitoring the activities on the BTC network is an uphill task. Consequently, hackers and scammers find the network more conducive to illegal transactions.
The Bottom Line
It’s not surprising to learn that Bitcoin technology has some technical flaws. That’s because what’s in operation today is just the prototype of the intended innovation. Therefore, the creators should have waited until they seal all the loopholes before officially releasing Bitcoin for public use. The three most critical development errors include; a restricted number of minable coins, unrealistic new coins creation rate, and low-security standards.