Topic: What are Bitcoin’s limitations ? (Read 113 times)

There are some inherent limitations of bitcoin that is not imposed by its users. The problem of scalability and the need to increase blocksize was not introduce by the people. Satoshi only knew why he chose  a small blocks and even when some early developers suggested to increase the block size when there were few hundreds of people using bitcoin, Satoshi didn't buy the idea.
Another is bitcoin is not a privacy coin. Just imagine being a privacy coin and as well as 100 percent decentralized. It would have been the best, although it would face more attacks from governments than as it does today

The limitations are self imposed by the users and people who don't understand the intended purpose of Bitcoin.

Front page of the white paper:
Bitcoin is "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution"

If the developers and solution providers keep this in mind then Bitcoin has no limitations.

This is not how you're being traced. Good wallet software doesn't interact with your browser, how can web trackers even locate your Bitcoin transactions? Chain analysis de-anonymizes using address clustering (which is when you don't use coin control), doing heuristic analysis (which is determining spending patters, i.e., change addresses), network analysis (even more complicated, and includes the analysis of time), and it can go even further like linking identities from KYC data to blockchain outputs.

Do you really called these limitations to bitcoin use? I don't think so, i could remember in early days when bitcoin was introduced and bitcoin transactions are becoming slower due to scalability and then the layer 2 protocols set in and bitcoin lightning network was introduced, ever since then there's nothing like that anymore, talking about speed it may not be the fastest but it's very important to consider it transaction speed as not bad, privacy is there, for transaction fee, you would have seen the exact amount you will be charged before making a transaction and this can be as well adjustable by you if you wish to, 51% attack had already been discussed on several occasions and is not a threat as long as the protocol remains.

With a more than a decade of been inception and the adoption rate coupled with the development by various developers it is definitely certain bitcoin will only continue to grow and advance.


The issue of speed mostly encountered whenever there is congestion on the mempool which doesn’t often occurs except on rare occasions or the person actually sets a very low transaction fee.

Block creation have actually been set on default for 10 minutes but there are certainly many times where the time used is les than that and only exceeds that time frame on rare occasions. Also everyone needs to be ok with rule because it actually defines the uniqueness of the network not to be manipulated. Also there have been forks that solve this issue like Segwit which reduces the space occupied by a single transaction in the block by separating the witness from that transaction there creating more space for more transactions.

Not every one has to wait so long to get a transaction confirmed again except maybe you are using an old wallet or one that doesn’t supports the bumping of transactions fee with methods like RBF and CPFP when your transaction gets stucked. So this was actually thing of the past.


I think your last paragraph actually answers the questions. Bitcoin is complete anonymous if the user chooses to use it that way. Using and exchange mostly centralized ones with KYC protocol defeats that purpose but it isn’t a rule set by bitcoin but rather the choice of the owner.

The blockchain needs to publicly show transactions history for transparency during a payment process where both the buyer and seller can verify the authenticity of the transactions. But in aspect of self spending and total anonymity you can simple use different addresses for different transaction purposes that which is been solved by the Hierarchy Deterministic wallets (from Bip 32, Bip39 and Bip 44 implementation) which gives a master public key that can generates 20 free addresses on a single seed.


Just like I said before the transaction fee increasing Depends on the congestion of the mempool which is not usually often and also the speed you want your transaction to get confirmed. Currently you can get your transaction confirm fast for just less than a $1. Also bitcoin according satoshi is an alternative to fiat so when you feel the transaction pool is congested and the fee is high you can simply pay with other method not necessarily bitcoin.


Theoretically the attacker is possible but realistically and economically it is not feasible so I wouldn’t refer to that as a threat or anything
Concerning the forks especially the hard ones you mentioned in think you need to look into their history too if they were actually able to solve the problems they wanted to address. If they actually were able to solve it then the adoption rate for them wouldn’t be as low as they are now

 A very lengthy write up you got there, Op..I feel what you have dropped will be appreciated in the beginners and help board but then again, what you have here isn't new and it's not like no one knows about the limitations to Bitcoin.
One major limitation to the widespread adoption of Bitcoin is that it's regarded as a scam project and out of fear, people tend to stay away and also, some countries do not accept it.
 Bitcoin is only accepted by a few merchants and as such it makes it unfeasible to accept it as a currency.
 
Most governments try to strangle its spread because by accepting it, they relinquish control and what better than to snuff it out? Spread rumours or introduce the use of CBDCs.
Another factor which can deter it's growth is it's penchant for volatility. That alone in itself is a huge setback. But then again, choosing to hodl Bitcoin is not for the faint hearted.

I can not agree more with the fact that BTC has slower transaction speed in compare to Visa Network. But Did you know how many other problems BTC is solving that your Visa Network can not solve. For example, the security anonymity and decentralization. These so called visa network could stop your transactions for no reason and also for 100 days and you are saying transactions could stuck for weeks in network. But the plus point is in BTC transactions at least came to an end while what happen in Visa!

And to make so called partially anonymous BTC into fully anonymous, you just have to follow some norms like do not use the CEXs, use platform with proxies on or using Tor browsers etc. Never link you Financial life in decentralized world with your personal life. And you will be half there.

And believe me BTC has not fee problems, and your lighting information seems bit old as they used to work now lighting network is in usage. I think your data is out date or the AI tool or platform you used to generate or fetch this data is out dated. Well, still you should do your own research too.

What are Bitcoin’s limitations ?
Bitcoin is facing a number of challenges. These include speed of transaction verification, a lack of privacy, high fees and risk of a 51% attack. However there are solutions currently being worked on to fix Bitcoin's bottlenecks.     

As Bitcoin has become increasingly popular, some of its features have created bottlenecks - and in some cases lead to arguments over what direction the currency should head in. We look at the main problems with Bitcoin.

Because no one person or group owns Bitcoin, working out how to fix or change some of these problems can only happen when everyone agrees.
 
But sadly not everyone agrees on the best way forward. That has lead to a number of interesting developments in the currency.

Problems with Bitcoin: Speed
The present architecture of the Bitcoin network is capable of processing a maximum of seven transactions per second. For comparison, Visa’s network can handle a whopping 24,000 transactions per second.

That’s lead to delays in how quickly the network can validate transactions, which gets slower the more people use the network.

There’s also a speed issue when it comes to how often a new block is created on Bitcoin.

Satoshi Nakamoto allowed a new block to be created every 10 minutes, to help prevent fraud on the network. About 2,000 transactions can fit into a block, so backlogs of unconfirmed transactions are common.

Both of these have lead to a slowdown in how quickly the Bitcoin network can process transactions.

Did you know?

Some people have had to wait weeks for confirmation of their transaction to arrive because of a lack of resources to process the backlog of transactions.

Problems with Bitcoin: Privacy
Bitcoin is only partially anonymous - experts call this pseudo-anonymity.   
 
Because all transactions are public, a determined observer could work out who an individual or company was based on activity listed in Bitcoin’s public records by doing a bit of cyber sleuthing on the internet.

How? Web trackers and cookies: the small pieces of code sat on websites designed to tell third parties what you’ve been up to as you travel around the web.

Once someone has that information, they can then trace your activity on Bitcoin and work out what you’ve been spending your money on.

Some Bitcoin exchanges also require users to submit identifying information. If these databases get hacked, then someone can find out what you’ve been up to.

Problems with Bitcoin: Fees
Because space in a block is limited, and there are only so many miners on the network, users attach a fee to incentivise miners to include their transaction before others.

As the backlog of payments grows, spenders offer increasingly lofty fees to attract miners to their transactions. The fee is the same whether the transaction on Bitcoin was for £5 or £50,000 - making Bitcoin unsuitable for small transactions, like buying a coffee in the morning.

Problems with Bitcoin: 51% Attack
If someone or a group acting together controls more than half the computer power being used for mining, they could rewrite the financial history of the blockchain allowing them to double-spend currency.

Forks
Because of the consensus nature of how Bitcoin is managed and run, there have been some arguments that have lead to what’s called a ‘fork’ where the community splits.

In Bitcoin’s case, there have been several Hard Forks, where a new currency or network has emerged.
 
In under a year, Bitcoin Private, Bitcoin Cash, Bitcoin Gold all emerged from the original Bitcoin protocol.

Read more about what forks are.

Fixing Bitcoin
While there have been issues, the development community has been active trying to iron out some of the early issues with the currency.

There have been a number of updates and upgrades to Bitcoin to help it run more smoothly. One of the most discussed was the Segwit update, activated in 2017.

This helped increase the number of transactions on the network, which has helped lower the fees charged by miners.

Lighting Network
A group of developers have been working on a giant update known as the Lightning Network.

This is a network that runs alongside Bitcoin’s central network, but does not require miners to validate transactions.

Instead, payments take place in private channels between users - and they only back up the transaction log to the Bitcoin network when they need to.
 
This would make the current Bitcoin a fallback in case of disagreements in private channels. If it works, it could free up resources, eliminate fees and reduce the amount of energy the network needs to consume.

Read more about Read more about the Lightning Network.

Beyond Bitcoin
Because of the consensus nature of Bitcoin, several developers, groups and companies have created their own currencies as a direct way of solving some of the Bitcoin’s problems.

While blockchain technology is here to stay, how Bitcoin progresses in future isn’t certain.               
 
https://decrypt.co/resources/bitcoin-limitations.