Bitcoin which was first introduced in 2009 by a software engineer, is a type of digital currency also known as cryptocurrency which is not backed up by some country’s government or any other bank. Bitcoin enables people to pay others who they know or even don’t know over the internet. It gives people the liberty to exchange money without revealing their own real identity. Bitcoin as a concept might be hard for the common people to understand. One of the main and less elaborative reasons why bitcoin failed is that people didn’t know what might happen in the future and people thought that they would have their money as bitcoin struggled to survive.
Some of the reasons why bitcoin failed are:
- Virtually, It has zero acceptance as one means of payment.
One of the basic functions of money is to act as a medium of exchange so that people can use it to pay for all the goods and services they avail. But in the case of bitcoins there is no virtual acceptance of it as a means of payment. Only less than one percent of merchants accepted bitcoin as a means of payment. And at present, the bitcoin fails to serve as a means of payment.
- Unable to provide the store of value.
Acting as the store of value is considered to be the second function of money which the bitcoin is unable to fulfill. Over some time, every currency provides a stable purchasing power annually. Even if the rate declines it declines very steadily. The case with bitcoin is not the same. Bitcoin has faced extreme price fluctuations in very less duration of time in the past few years. The bitcoin lacks fundamental value and hence defies as a store of value.
- Not federally insured.
Unlike the other currencies which are used all around the world, the bitcoin is not insured. It has no deposit insurance. There is a very difficult choice in front of bitcoin enthusiasts as they don’t have a way to check if their money is safe.
- 4. Bitcoin theft.
The technology which supports bitcoin is known as blockchain technology. This blockchain technology has some different properties when it comes to security. And due to these properties, it is safe to say that bitcoin transactions are not reliable. During the December of 2017, In a theft, a total of 980,000 bitcoins were stolen from various bitcoin exchanges.
- Difficult to keep a count
The bitcoin doesn’t perform its function of being a store of value, and as a consequence, it fails to perform its function as a unit of account which is the third function of the money. When it comes to other currencies, they can keep a count of how much worth that currency has but with the case of bitcoins when it comes to calculating the net worth of bitcoins. First it has to be converted into US Dollars. And the conversion cant happens the other way around which means that it doesn’t have its unit of account