Biggest problems in Digital Assets & Cryptocurrencies
What are biggest problems with Bitcoin, Ethereum and other digital assets and what are the possibilities they will fail in future.
Losing Private Key
A crypto asset or a coin is stored by a single private key. If the user lost the private key, the asset is completely gone and difficult and almost impossible to get back again. If someone gets someone’s private key, S/he can take all the tokens from user’s wallet. Imagine the case where a person will work lifelong to earn, but if private key is gone his entire life earning is gone. This is one of the biggest problem in digital assets.
Issue of inheritance
Without the keys there is no way to access and do any transaction from the digital wallets, there’s no way of accessing someone’s funds if is is to pass away without sharing the keys. 5 Years ago, Matthew Moody died during an observational flight, he had been mining bitcoin. His father, Michael Moody, has spent the last three years trying to find out how many bitcoins his son has and how to find them.
https://www.wired.com/2014/03/bitcoin-exchange
Anonymous transactions
Anyone can download and create one wallet by writing few lines of code. So this triggers a lot of anonymous transactions in the blockchain. At least in a traditional Banking system, you know who is sending money to whom, where as, in crypto transactions there is no identity proof of transactions. This can leads to many criminal activities, money laundering and frauds.
Recently many leaders twitter account hacked (Donald Trump, Tim Cook, Elon Musk etc) and the hacker demands Bitcoin to release the account.
Scalability and performance
Every single transaction is part of the blockchain network. Anyone even a small transaction example like buying a coffee just few cents or dollar costs will be part of the blockchain. This small amount transaction needs to follow through all the consensus mechanism and stored in the blockchain. there are hundreds of ERC 20 tokens and they also have millions transactions and those all transactions part of the same Ethereum blockchain. So this leads to performance and scalability issue. and ultimately the network becomes very very Slow and cumbersome.
Imagine there is lunch time and a very rush hour in a crowded foodcourt, and you pay in bitcoin for a just for a coffee or tea. The transaction takes 10 minutes to complete. Its a waste of time and money for the stall owner as well as the customer.
Exchange Security risk
Crypto exchanges are digital and if not managed well, It is highly vulnerable to hackers, operational glitches and malware. By targeting exchange, hackers can gain access to thousands of accounts where the cryptocurrencies are stored.
One infamous example was the Mt. Gox hacking incident in 2014, where the Japanese exchange closed down after millions of dollars in bitcoin were stolen.
Market risk
Within short time, world has seen fierce swings in value. The prices on exchange platforms rise and fall dramatically over a short period of time. With any investment, the value of cryptocurrencies can fluctuate. When a tradable asset can drop by as much as 49 percent in less than 24 hours, then the volatility of the market is very high. If this trend continues people may lose value. and their resistance will increase for adoption of bitcoin and other cryptocurrencies,
Solutions
Keeping all these problems and issues in mind. Sovereignwallet developing Meta-Blockchain project which address and resolves almost all these problems discussed above. It not only resolves loosing private key issue but also solves the anonymous transactions with high performance and scalability problems. Watch this space !!!!
