Disadvantages Of Bitcoin

The nature of Bitcoin gives criminals an alternative to traditional money laundering methods. Since Bitcoin is anonymous, it caters toward black market activity (although this is a possibility, the actual amount of illegal trades are less than 1% of all transactions). In addition, since transactions are irreversible and that there is no “middle man” or third party to mediate, it makes people weary of wanting to spend and use Bitcoins. Since there is a set number of Bitcoins that will be created (maximum of 21 million) mining will become increasing difficult. This in turn makes the currency deflationary. This deflationary nature encourages people to save rather than spend Bitcoins. This is contradictory to what Bitcoin attempts to achieve; an alternative payment method.