The speculation
The very high volatility - prices can vary by 10% during a normal day - is prohibitive for consumers and traders who need a stable currency. On the contrary, traders and hedge funds are looking for such strong variations. Goldman Sachs has just opened a trading desk for its clients. The financial appetite for this currency has even convinced the stock market operators to offer futures on bitcoin. A double-edged approach: on the one hand, it increases the legitimacy of these assets, on the other hand it provides traders with a simple instrument of downside speculation on bitcoin. "The accumulation of bearish positions [...] could then condemn the bitcoin rally", analyzes Aurel BGC's Tangi Le Liboux. In addition, on these platforms, bitcoin is not considered a currency, but more as a financial instrument close to a commodity.
The very high volatility - prices can vary by 10% during a normal day - is prohibitive for consumers and traders who need a stable currency. On the contrary, traders and hedge funds are looking for such strong variations. Goldman Sachs has just opened a trading desk for its clients. The financial appetite for this currency has even convinced the stock market operators to offer futures on bitcoin. A double-edged approach: on the one hand, it increases the legitimacy of these assets, on the other hand it provides traders with a simple instrument of downside speculation on bitcoin. "The accumulation of bearish positions [...] could then condemn the bitcoin rally", analyzes Aurel BGC's Tangi Le Liboux. In addition, on these platforms, bitcoin is not considered a currency, but more as a financial instrument close to a commodity.
The regulation
One of Bitcoin's main interests is its self-management. The currency is decentralized and escapes the control of a central bank or a state. The various regulators closely monitor the evolution of cryptocurrency. "In order for bitcoin to mature, it needs to be at the center of a regulated space, instead of being at its margins as it is now," says ING economist Teunis Brosens. But that could be mission impossible. Bitcoin and regulation do not mix: every time that China has taken action against bitcoin, prices have fallen, especially when prohibiting the raising of funds in virtual currency.
One of Bitcoin's main interests is its self-management. The currency is decentralized and escapes the control of a central bank or a state. The various regulators closely monitor the evolution of cryptocurrency. "In order for bitcoin to mature, it needs to be at the center of a regulated space, instead of being at its margins as it is now," says ING economist Teunis Brosens. But that could be mission impossible. Bitcoin and regulation do not mix: every time that China has taken action against bitcoin, prices have fallen, especially when prohibiting the raising of funds in virtual currency.
Security
Stealing and piracy stories are legion in the world of cryptographic currencies. Not only do they undermine trust, but they also cause violent price corrections. The bankruptcy of Youbit last Tuesday after a second theft of bitcoin also resulted in a violent stall. The flights encourage investors and savers to be more vigilant and to increase security measures. But "ordinary people do not like to have no rights, no recourse, no guarantee, no legal support, nothing. They simply want to have access to their money in a secure, reliable and hassle-free way, "explains Teunis Brosens.
Stealing and piracy stories are legion in the world of cryptographic currencies. Not only do they undermine trust, but they also cause violent price corrections. The bankruptcy of Youbit last Tuesday after a second theft of bitcoin also resulted in a violent stall. The flights encourage investors and savers to be more vigilant and to increase security measures. But "ordinary people do not like to have no rights, no recourse, no guarantee, no legal support, nothing. They simply want to have access to their money in a secure, reliable and hassle-free way, "explains Teunis Brosens.
Divisions
Another challenge is governance. Indeed, divisions within the community about the evolution of the protocol can lead to abrupt updates of the software and, if no agreement is found, to splits. One of the "forks" - a split in the jargon of "cryptos" - the most emblematic is the one that gave birth to Bitcoin Cash to increase its ability to process transactions. In addition, many currencies compete with different goals, such as Ethereum or Ripple.
Another challenge is governance. Indeed, divisions within the community about the evolution of the protocol can lead to abrupt updates of the software and, if no agreement is found, to splits. One of the "forks" - a split in the jargon of "cryptos" - the most emblematic is the one that gave birth to Bitcoin Cash to increase its ability to process transactions. In addition, many currencies compete with different goals, such as Ethereum or Ripple.
energy
The bitcoin revolution - if it is one - is in any case not green. According to Digiconomist estimates, each transaction consumes the equivalent of what a US household needs for a week. Total network consumption would be slightly higher than in Denmark. Bitcoin is all the more polluting because the mining industry is mainly located in China, where coal is still used en masse in the production of electricity. In addition, this electricity consumption imposes a physical limit on the network. The latter, which validates transactions and creates bitcoins, can not grow indefinitely at the risk of consuming more energy than plants are able to produce.
The bitcoin revolution - if it is one - is in any case not green. According to Digiconomist estimates, each transaction consumes the equivalent of what a US household needs for a week. Total network consumption would be slightly higher than in Denmark. Bitcoin is all the more polluting because the mining industry is mainly located in China, where coal is still used en masse in the production of electricity. In addition, this electricity consumption imposes a physical limit on the network. The latter, which validates transactions and creates bitcoins, can not grow indefinitely at the risk of consuming more energy than plants are able to produce.
Transaction fees
As developed, the Bitcoin network can handle about 7 transactions per second. This limit causes network congestion and slows transactions. In order for these to be processed as quickly as possible, transaction costs must be increased. The network is so saturated that these fees would reach $ 25 right now. Impossible, therefore, to adjust his wand in bitcoin.
As developed, the Bitcoin network can handle about 7 transactions per second. This limit causes network congestion and slows transactions. In order for these to be processed as quickly as possible, transaction costs must be increased. The network is so saturated that these fees would reach $ 25 right now. Impossible, therefore, to adjust his wand in bitcoin.
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