— Ted Bauman Guru (@Ted_B_Guru) January 29, 2018
A few weeks ago, financial experts and seasoned investor Mr. Ted Bauman penned an article in which he expressed his reservations on what it will take for the most popular digital currency platform known as Bitcoin to make it to the mainstream market as the currency of choice. He said that when Bitcoin hit the market several years ago, it was hailed as a cure to the current currencies’ limitations especially when it comes to matters security since it cannot be counterfeited and more importantly is the fact that it cannot be manipulated by government authorities like the central banks given that it is a decentralized type of currency.
After a number of years in operation, some of the unforeseen challenges have come to the fore. One of the most common challenges that most users of the currency have often reported is how painstakingly long a user has to wait for a single transaction to be successfully processed raising fears whether Bitcoin is really ready to go mainstream as a currency of choice. Read more about Ted Bauman at Bloomberg
The function of a currency should be to enable parties to transact securely and conveniently. Even by current standards, Bitcoin still performs way dismally when put head to head with the most popular transaction platforms currently. For instance, for the case of Visa, the electronic transaction processing platform, they currently process almost 2,000 transactions each second. Visa’s platform is built with the capacity to handle a further workload of more than 20,000 transactions per second meaning that they are currently working at just a tenth of their capacity.
On the other hand, Bitcoin is currently built to handle a paltry 6.5 transactions each second, however, there have been several reports of users having to wait for more than 10 minutes to have a single transaction with the situation expected to deteriorate as more and more people join the digital currency platform.
However, this is not to say that there have been no efforts that have been made in a deliberate and conscious effort of trying to salvage the situation. The biggest drawback is the tradeoff that exists between sacrificing safety and security in an effort to improve transaction processing speeds. As the engineers try to find a workaround, Bitcoin will remain to be a currency for the few.
About Ted Bauman
Mr. Ted Bauman is the Editorial Director at Banyan Hill Publishing and the editor of the Bauman Letter and Plan B Club newsletters.