Bitcoin as a new technology survived for more than 10 years. In this article, the biggest threats to Bitcoin cryptocurrency investors have to fear.
Cryptocurrency investors have been waiting for digital currencies to expand and reach new highs in the future. Many of them are convinced that the market will continue to grow and that their investments will get multiplied by several times. Nonetheless, they do not take into account which are the biggest threats to Bitcoin (BTC).
In this article, we will share with you which are the biggest threats that could hinder Bitcoin’s growth in the future. Some of these threats include quantum computing, lack of interest from developers and decentralization failing to succeed.
Quantum computing is perhaps the most popular threat to Bitcoin for the next ten years. Computers are becoming faster and more powerful every single year. As a result, this is something that could put Bitcoin’s security model at risk.
Nowadays we know that there is a private key per public address. Computers today would need several years to be able to discover the private key behind a specific address. However, quantum computing would make this task much easier. Indeed, it would be possible for these computers to guess the private keys of users.
Cracking the private key with quantum computing is the biggest threat to Bitcoin
If that happens, Bitcoin would be in severe trouble. Moreover, the situation could be devastating for the whole crypto space. Furthermore, if developers do not take the necessary measures to make Bitcoin and other cryptocurrencies quantum-resistant.
Another issue that would affect Bitcoin’s security is the fact that these quantum computers would also massively increase the hash rate on the Bitcoin network. It may be possible for them to perform a 51% attack considering difficulty rates take several days to be adjusted.
This has a high possibility of happening in the next ten years if no measure is taken by developers to solve this issue.
Lack of Interest From Developers
Another thing that could affect Bitcoin and other virtual currencies is the lack of interest from developers. Taking as an example of the previously mentioned situation of quantum computing, developers would be able to create a system that would protect Bitcoin against these attacks.
If developers are not interested enough in offering solutions to this issue, the threat could be massive. At the same time, there may be other things affecting Bitcoin and digital assets. For example, back in 2017, scalability was a hot topic in the crypto market.
Developers were able to come up with a momentaneous solution for Bitcoin to reduce the congestion on its network: Segregated Witness (SegWit). Although this was not the ultimate solution for the scaling issues affecting Bitcoin, it certainly helped the network.
However, the Lightning Network, which is expected to solve Bitcoin’s congestion, has been developed for several years and the effect in the network has been limited.
This has also a high possibility rate of happening. Indeed, in the last year, there was little or no change at all about the Lightning Network. Moreover, it might be possible for other solutions to be developed.
Lack of Interest From Miners
Miners are an integral part of the whole crypto ecosystem. Bitcoin and other Proof-of-Work (PoW) networks depend on them to process transactions and improve the network’s security. However, miners could eventually lose interest in mining Bitcoin.
At the moment, it is profitable to do so, but many consider it is possible to face a mining capitulation. For example, if Bitcoin price falls or rewards get reduced (50% every halving event), miners could abruptly leave the market and reduce Bitcoin’s security.
If miners do not have the correct interests to keep mining, this could certainly affect cryptocurrency investors that placed their funds in the market over the last years.
This is highly unlikely. Although miners in other networks such as Litecoin have capitulated, Bitcoin remains as the largest and most popular network were miners want to work on.
Decentralization Falling Apart
Decentralization is also an important topic for crypto enthusiasts that invested in the market. While financial services have been centralized throughout the years, (specifically those that offer digital solutions), Bitcoin and other cryptocurrencies revolutionized the market with the intention of offering decentralization.
Nevertheless, things could go in the wrong direction. Indeed, Bitcoin miners are highly centralized in China. If the government decides to ban this activity in the country, Bitcoin will definitely be hit.
It is worth remembering the time in which China decided to ban Bitcoin and Initial Coin Offerings (ICOs) in the country. Although it was in the bull market, the price of Bitcoin was heavily affected. In the future, this could certainly be a massive issue for Bitcoin.
Decentralization falling apart could certainly happen. If governments increase their control of virtual currencies and projects such as Bitcoin Cash (BCH) exhort miners to behave in certain ways, decentralization is at stake.
Massive Crackdown on Bitcoin by Governments
Finally, Bitcoin could eventually be affected by a global ban. Although it may still be allowed in some countries, if the United States, China, Europe, and other important nations decide to completely ban Bitcoin and cryptocurrencies, this could affect the market as a whole.
Investors should always follow the news and understand what is happening in the crypto space. Moreover, they need to understand whether some countries are planning or not to ban virtual currencies or limit their trading activities.
If demand decreases, the price of Bitcoin and other digital assets would certainly fall. India, China, and South Korea have already implemented some restrictions in the crypto market. If more issues arise in European nations and in the United States, this could certainly be a negative factor for the largest virtual currency in the world.
Lastly, a massive crackdown on Bitcoin by governments is highly unlikely. Just a few countries have imposed a total ban and many of them have already flexibility these rules.
Bitcoin is no different compared to other starting technologies out there. Meaning, investing in this new asset comes with risk. In this article, I pointed out the biggest threats to Bitcoin and other similar cryptocurrencies.
The majority of these risks have been there from the start, however, quantum computing is getting more relevance. Additionally, if quantum computing keeps developing into the mainstream area, the Bitcoin network is required to do another protocol update to protect its hashing algorithm.
In fact, updating its protocol happened before and isn’t a unique event. For example, the last time it occurred was when SegWit was implemented. Finally, I want to mention that investing comes always with a certain risk, however, the rewards could be lifechanging.
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