Of course, everything has a downside. There are those who have their doubts about the virtual currency.
- Faced ridicule in the press for attempting to create a new global currency
- The original bitcoin network is not scalable, and cannot support the number of online transactions currently taking place
- Its value based on speculation
- Bitcoin's reputation in the first few years marked as the black market, drug market, or money laundering currency. In October 2013, the FBI raided the home of Ross William Ulbricht, founder of darknet website Silk Road under charges as the most notorious place for online purchase of illegal drugs and seized 26,000 bitcoins. Thus the network got bad press as currency for illegal activities.
- First, it's highly volatile right now. Many retailers are waiting for the Bitcoin market to calm down a bit before adopting it.
- The anonymous nature of Bitcoins lends itself to illegal transactions, leaving the authorities with no way to determine the buyer.
- Theft of Bitcoins can occur, just as a pickpocket can snag your wallet on the train. Even worse: when your wallet is stolen, authorities have a shot at capturing the thief, but you'll never get those Bitcoins back.
- The Bitcoin value decreased by almost 36% after the biggest scandal of Mt. Gox, a Tokyo based bitcoin exchange company. It sparked a serious doubt on the viability of the cryptocurrency. In 2014, the company was handling 70% of Bitcoin transactions worldwide, before it filed for bankruptcy. In a period between 2011 to 2014, its systems got hacked, and over the years, Bitcoins worth $45 million disappeared from its accounts. Investigators were able to recover 200,000 BTC, but over 650,000 not recovered. On the open ledger, the BTC was found, but there was no procedure to take the coins from current owners and return to original owners.