Like any other currency, bitcoin has some disadvantages. Some of these are associated with its digital and decentralized nature. Here are a few others:
Even though bitcoin had its fair share of media attention, it is actually only accepted by a very small group of users. Many people are still not aware of the existence of digital currencies. Only several businesses and companies accept bitcoin as a means of transaction. It’s hard for them to use bitcoin if their workers are not educated enough.
All your bitcoins could be lost if your hard drive crashes, or you lose your data in some other way. If this happens, you may not be able to recover any of your coins. The worst part is that all of those bitcoins would be “orphaned” which means that no one could benefit from them.
Because of many different factors (supply and demand, regulations…), the price of bitcoin changes daily. The factors affecting price volatility are numerous and often it is not possible to predict what will happen next.
4. Digital nature
Bitcoins don’t have physical form and that means it can’t be used in physical stores. Users can’t store them or spend them outside of digital platforms. Because of this, users are forced to convert bitcoins into some traditional currency before spending them in the physical world.
5. Valuation problem
The decentralized nature is an important asset but it has its bad side. There is no one to guarantee bitcoin’s minimum value. If, for example, a large group of users decide to sell their bitcoins the value would decrease (supply growing, demand decreasing).
6. Early stages
Bitcoin, with its blockchain technology, has a long way to go in order to be a perfectly functioning system. This is something that bitcoin absolutely deserves forgiveness for, having in mind it has existed for less than a decade.
7. Illegal activities
The anonymous nature of bitcoin can’t go without misuse. Bitcoin could be used for money laundering, weapons and drug buying/selling… There is probably no way to stop all of this from happening.
The activity of verifying transactions is hard work, not very user-friendly and it costs a lot. Mining overheats machines and asks for special hardware. Luckily, miners are rewarded for their trouble in bitcoin.