Obstacles Preventing Bitcoin from General Circulation

The first-ever, widely-recognized digital currency Bitcoin is gaining a menacing reputation among different governments, which is preventing it from going into general circulation. While many people, including investors and financial experts in the government itself, agree that bitcoin can be a great alternative currency in the future, governments mention the following as their problems.

1.    Lack of Transparency

The bitcoin network, managed by an automated program, records all bitcoin activity in the entire world. The network encrypts allthese transactions, which allow great privacy for many users. Governments are concerned that because of bitcoin’s history of being used as a medium for illegal drug and substance purchases over the Internet, it might become a “shady” medium that ensures no trace from purchase can be made.

2.    Lack of Regulation

Bitcoin has no bank and is managed by not one individual or government. It is a currency that self-regulates. There is no “printing mint”, instead, miners, who are rewarded for having their machines solve complex algorithms using “mining rigs” or powerful computer units, ensure the speed of money production. This decentralized feature is also not recorded and cannot be regulated.

3.    Money Laundering

Because all transactions with bitcoins are encrypted and its high exchange rate due to bustling activity, governments fear that bitcoin can become a medium for money laundering.