🔐5️⃣5 Must-Know Risks Before You Buy Bitcoin in May:- PART 2
🔑3. Software bugs
Ethereum gets a lot of attention because it is a functional blockchain that allows for the development of decentralized applications. The issue, though, is that its product road map is incredibly complex. While this might seem exciting, there's a risk that updates introduce software bugs that can cause problems for the blockchain.
Bitcoin stands out because its code is very simple, with some even calling it boring. This is purely by design.
However, upgrades have been implemented in the past, whether to increase the block size or to improve privacy. And if developers choose to present fixes in the future, there could be technical issues.
🔑4. Bitcoin's scalability
The Bitcoin network can process just under six transactions per second (TPS). This pales in comparison to the Visa network's capacity of 65,000 TPS. If the digital coin wants to handle more volume over time, then the problem of scalability needs to be solved.
The Lightning Network is a Layer-2 scaling solution that's being worked on to address this. But its ultimate success isn't guaranteed. There's a possibility that the leading crypto might never be able to scale up for faster and cheaper transactions.
Block CEO Jack Dorsey believes that if Bitcoin doesn't become used as a method of payment, then it will become irrelevant over time. And to him, this would be a failure.
🔑5. Ongoing volatility
Bitcoin's historical performance is truly spectacular, but it has been a very bumpy ride. There have been periods of extreme volatility. In fact, the price has seen multiple drawdowns of greater than 50%.
If volatility doesn't continue to decrease, then some individual and institutional investors might never be comfortable buying it. This would undoubtedly leave a lot of capital off the table, which could affect the digital asset's upside potential.
Understanding these five key risks will round out any investor's knowledge about Bitcoin. #BTC #Write2Earn #Binance #BinanceSquareFamily
