Many see Bitcoin as a digital currency that might replace the monetary system we have today, and Bitcoin evangelists pray that it will be the case. UBS, Union Bank of Switzerland, says that they might have to wait a while since Bitcoin cannot be a digital asset just yet.
The Bitcoin price must reach $213,000 or its network processing capabilities needs to improve, according to UBS, before Bitcoin can replace the U.S money supply. Since the Bitcoin price hovers around $7,300 today, it would mean an increase of 2,900% from today’s prices.
Currently, Bitcoin can only support a fraction of the transactions VISA INC. can handle. And that capacity constraint, inherent in the design of Bitcoin’s network, could continue to limit the digital currency’s usefulness, UBS said in its 34-page report out yesterday.
“Our findings suggest that Bitcoin, in its current form, is too unstable and limited to become a viable means of payment for global transactions or a mainstream asset class,” the report found.
Forbes reported, July 6th, which Bitcoin currently processes about three transactions per second, while VISA network can handle more than 3,600 every second which is around 311 million per day.
That Bitcoin cannot support enough transactions per second yet is not the only issue. The use of Bitcoin in commerce had also declined a lot since September 2017 when the commerce from the 17 largest crypto merchant-processing services peaked at $411 million. Since then, the best-known cryptocurrency has been on a steady decline, hitting a recent low of $60 million in May, according to research that startup Chainalysis Inc. conducted for Bloomberg News.
“Bitcoin is not usable,” Nicholas Weaver, a senior researcher at the International Computer Science Institute, said in an email. Often, he said, “the net cost of a Bitcoin transaction is far more than a credit card transaction.” And Bitcoin-based transactions can’t be reversed, an issue when a merchant or a consumer comes up against fraud.
Even though there are some negatives circulating Bitcoin, there are positive aspects as well. Blockchain has developed over the years, and some say that blockchain 4.0 is here or approaching. Bitcoin and its fellow cryptocurrencies are getting more involved in the society every day and are evolving. Bitcoin improved by adding the lightning network, and the team is certainly working on the next step.
There are those, Twitter and the payment service Square that sees BTC as the world’s single future currency. Jack Dorsey, said in March that the development could take over ten years but could go faster.
But we are far away from reaching $213,000 and according to experts the first step would that SEC allows CBEOs ETF to reach the market. SEC Commissioner Says ‘There’s No Reason not to Allow’ Bitcoin ETF. The decision for the latest bitcoin ETF proposal is scheduled for the first days of August, although an extension seems likely.
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