Countering Bitcoin Criticism
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Speed Is Not A Factor For Bitcoin Market Adoption
One of the other criticisms against Bitcoin is its relatively slow transaction times. This so-called “slowness” is of course still significantly faster if compared to the conventional banking system which normally require days to remit a sum of money across international borders.
It is true though that Bitcoin’s average of 7 TPS (Transactions Per Second) is significantly slow as compared to some other cryptocurrencies that offer a much faster TPS. For example, if you compare Bitcoin’s TPS to Visa which can process around 20,000 TPS, then the Bitcoin blockchain network is terribly slow.
To make it worse, in practice, the time to confirm Bitcoin transactions may vary greatly. In some cases, transactions may require hours and may even take more than a day depending on how much traffic the network is handling.
Just taking altcoins like Ethereum and Litecoin as examples, both of these cryptocurrencies offer much faster transaction times but we of course have to take into account that the market cap of altcoins are much lower than Bitcoin.
Nonetheless, the relative slowness of the Bitcoin network which has persisted for more than a decade now seems to have no effect on its growing adoption. This is because Bitcoin possesses a few unique advantages that outshine its competitors:
Bitcoin’s Security and Stability
Bitcoin’s slower block time is a trade-off for higher security and stability. The longer block time basically increases the security of the blockchain network. Bitcoin’s proof-of-work consensus mechanism, combined with its extensive network of miners, makes it one of the most secure blockchains in existence.
Bitcoin As A Store of Value
Many users and investors view Bitcoin primarily as a store of value rather than a medium for everyday transactions. For these users, transaction speed is less critical than the security and scarcity that Bitcoin provides. As a store of value, Bitcoin’s slower transaction times are acceptable given its long-term appreciation and stability.
Layer 2 Solutions
Layer 2 solutions, such as the Lightning Network (LN), are being developed to address Bitcoin’s scalability issues. The Lightning Network allows for faster, off-chain transactions that are eventually settled on the main Bitcoin blockchain. If you are consumer who is eager to use Bitcoin in everyday transactions, the Lightning Network is a very important innovation as it significantly reduces transaction times and fees. As the network advances, we should see more people using Bitcoin as a currency for everyday transactions. Actually, you can also now use Litecoin, a fork of Bitcoin that is specially designed for faster transactions speed without compromising on security.
Institutional Adoption of Bitcoin
Institutional adoption of Bitcoin continues to grow, meaning more major companies and financial institutions recognize its value as an investment asset. As more institutions adopt Bitcoin, it will further cement Bitcoin’s relevance in the financial markets. For the institutions, they are more concerned with Bitcoin’s long-term value proposition than with transaction speeds.
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Conclusion
Bitcoin’s relevance in the modern financial markets and economy is undeniable, despite the criticisms it faces. Its unique attributes—scarcity, security, decentralization, and growing institutional adoption ensure its continued importance.
Environmental concerns, illegal usage, and lack of inherent value are just some of the criticisms against Bitcoin. However, as Bitcoin’s value exponentially surges in value and become more legalized in many countries, you can be quite assured that most of its critics will eventually be silenced. We are also witnessing more people regarding Bitcoin as a store of value and a hedge against traditional financial systems. All these positive indications surrounding Bitcoin will only strengthen its position in the markets.
The ongoing development of layer 2 solutions like the Lightning Network will make Bitcoin more practical for everyday transactions. As using Lightning Network becomes more user-friendly, we will surely see more ordinary people using Bitcoin as an everyday currency.
Therefore at the end of the day, unless an unforeseen event drastically transform the cryptocurrency industry, it would seems that Bitcoin is poised to play a critical role for years to come.
