Six Major Limitations of Bitcoin, the Lightning Network, and their role with Utilities

Credit: Unsplash, Two Paddles Axe and Leatherwork

This is Part Three in my series concerning cryptocurrency and the utility industry. You can find Part One here and Part Two here.

As bitcoin makes headlines, time and time again, people are starting to take seriously the potential inherent in cryptocurrency. Ethereum, Tether, Litecoin, and others haven’t reached the same mainstream ubiquity as Bitcoin has. Still, as cryptocurrency continues to attract celebrities and respectable financial institutions, we need to look seriously at the implications.

I’m an advocate for bitcoin’s mainstream adoption, talking about it at great length with friends, colleagues, and in my blogs. But I understand that there are hurdles we need to jump before crypto can compete with any type of fiat currency. These are the three significant limitations of accepting Bitcoin as payment for utilities.

Regulations and Compliances

Adoption and User Behavior

Despite the surge in stocks, media attention, and instantaneous transactions, people are continuously shying away from using bitcoin. First, it takes a bit of tech-savviness to set up a digital wallet. Second, the comfort level with new currency is shaky at best and downright terrifying at worst.

I’m still optimistic. How did we move from bartering to the gold standard? Then, to cash? Then, to credit options? We’re constantly innovating and improving our situations. I’d be hard-pressed to think that we won’t be able to do it again!

Security Issues

As more users jump on the train, we will inevitably see more scams, hacks, and fraud cases pop up. This, coupled with the fact that there are no remediation policies in place — like chargebacks or refunds that credit cards have — leaves room for improvement on the security front.

Accounting and Taxes

Technology

Value Fluctuation