Bitcoin and other cryptocurrencies have received a great deal of attention of late, especially when Bitcoin reached a value of $19,000. Besides their monetary value, some are looking to them as a means to perform all transactions, which prompted the Switzerland-based Bank for International Settlements (BIS) to examine it for its potential. According to the BIS report, trying to put all transactions onto Bitcoin would cripple the Internet.
The reason for this claim is based on how Bitcoin and other cryptocurrencies track transactions, which is that all transactions are added to a ledger. The more transactions that are made, the larger the ledger grows, potentially leading to it being too large for servers to store it and requiring the power of supercomputers to add to the ledger. That much data being transmitted over the Internet would squeeze out other data trying to use the available bandwidth. Additionally, mining Bitcoin takes a significant amount of power, increasing its cost, and there is a fee for every transaction as well, which spiked to $57 six months ago.
While the BIS report is hardly supportive of using cryptocurrencies to replace normal money, it does acknowledge potential for other applications within the economy. Only time will tell how cryptocurrencies will be integrated into the economy.
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