Unfortunately, there are also some serious problems that threaten this growth. There are two major problems that need to be addressed if investors and traders want to see long-term value in bitcoins.
Issue We Are Now Facing
The first problem facing the bitcoin price is that the number of full nodes on the network continues to decrease. This is a fundamental issue for the system. Without good developers, the entire system will be slowed down. In order for the system to work properly, all participants must agree on certain standards, rules, and guidelines. Without those participants, it becomes vulnerable to outside influences and manipulation.
Another fundamental issue with the network is that only a few select countries have access to significant amounts of money by spending it on bitcoins. Naturally, the most notable countries include China and Russia. If those countries start to allow access to their markets, the exchange rate between currencies will significantly increase. If that happens, the bitcoin price could fall significantly, causing investors to liquidate their holdings and take a loss on their investment.
A Light At The End Of The Tunnel
There are solutions to these problems, but unfortunately, they don't come from popular crypto Sportster like Mt. Gox or ZenCart. Instead, the solutions proposed are suggested by decentralized autonomous organizations (DAOs). These new types of exchanges are designed to make it easier for people to buy and sell currencies.
Let's look at a use case for this type of decentralized exchange. Suppose that a group of people decide to start a Diner's Club. They will establish a website where users can post their thoughts and opinions about the products that they use. All transactions are made in "dust" or virtual currency. Everyone who signs up for the Diner's Club can spend his or her virtual currency on products that he or she chooses. The central government doesn't get involved in the process.
That may sound like a great way to make money, but if you look beyond the everyday consumer scenario, it doesn't really provide much value. Suppose, for instance, that a thousand members sign up for the site and the average price of all transactions is two U.S. dollars. Even if you take all transactions in the last two years and apply it to the total number of units issued, you still aren't making very much profit. In fact, you might be losing money since the actual amount of money in circulation has more than double the amount of money being spent!
This is why it's important for bitcoins to be stored in offline environments. With the current popularity of Diners Club, it's easy for an average person to manage his or her own personal wallet. In fact, even if you use a web browser, you'll have access to a wide variety of offline merchants and services, many of which allow for instant transactions and low costs. The real power in a wallet lies in its ability to act as a clearinghouse, transferring money from one place to another instantly and securely.
However, there's no central administrator controlling the ledger. Anyone can add their information to the ledger at any time by running a program that alters the balances of all previous transactions. The software also includes mechanisms for correcting any inconsistencies that may occur due to clerical errors, human errors, or system errors. With these kinds of safeguards, you can be assured that your bitcoins are being held securely and furiously.